Contributed by Julie Proscia

On September 18, 2012 a three-person NLRB panel held that Costco’s policies regarding the Internet and social media were “too broad” and could effectively stifle employees’ right to free speech under the National Labor Relations Act (NLRA). This move was an evolution of previous general counsel’s guidance and the first time that the NLRB officially held that a social media policy violated Section 8(a)(1) of the NLRA.

The “Electronic Communications and Technology Policy” in Costco’s employee handbook advised employees to, “be aware that statements posted electronically (such as to online message boards or discussion groups) that damage the company, defame any individual or damage any person’s reputation or violate the policies outlined in the Costco Employee Agreement, may be subject to discipline, up to and including termination of employment.” The NLRB found that this policy was too broad and prevented employees from engaging in protected discussions regarding the terms and conditions of their employment.

Not only did the NLRB strike down the social medial policy, but it also criticized and struck down four other provisions in the employee handbook. These included provisions relating to the dissemination of confidential information including prohibitions regarding discussion of seemingly confidential matters like employees contact information, FMLA leaves, ADA accommodations and workers’ compensation injuries. Like the Electronic Communications Policy the NLRB found that the provisions restricted discussions relating to terms and conditions of employment and as such was too broad.

This leaves employers in an even larger quandary trying to protect their confidential information and the reputation of the company while maintaining compliance with an ever evolving and seemingly broader definition of protected and concerted activity. It is even more important for employers to diligently update their policies and procedures to ensure that they are not the next in the social media expansion pack.

Costco Wholesale Corporation and United Food and Commercial Workers Union, Local 371, Case 34–CA–012421.