September 24, 2012
On September 7, the National Labor Relations Board (“Board”) issued its first decision on the lawfulness of an employer’s social media policy under the National Labor Relations Act (“NLRA”). We have previously reported on three non-binding reports issued by the Board’s Acting General Counsel (“GC”) since August 2011, outlining his views of impermissibly restrictive social media rules. In Costco Wholesale Corp., the Board has indicated that it may take an approach similar to the GC in scrutinizing employer efforts to control employees’ online speech.
The Costco policy prohibited employees from electronically posting communications that “damage the Company, defame any individual or damage any person’s reputation, or violate the policies outlined in the Costco Employee Agreement.” Reversing the administrative law judge’s ruling, a three-member Board panel held that this rule was overly broad in violation of Section 8(a)(1) of the NLRA. In reaching this conclusion, the Board found that the wording of the policy “clearly encompasse[d] concerted communications” protesting Costco’s treatment of its employees. The Board further found that in the absence of any accompanying language that “even arguably suggests that protected communications are excluded from the broad parameters of the rule,” employees would reasonably assume the policy prohibited them from engaging in communications critical of Costco or its agents. Costco was ordered to rescind the policy insofar as it prohibited employees from making on-line statements damaging to the company’s or any person’s reputation.
Costco’s policy also provided that “sensitive information such as . . . payroll . . . information may not be shared, transmitted or stored for personal or public use without prior management approval.” The provision was deemed unlawful, because the Board determined that employees would reasonably conclude that it prohibited them from discussing their wages and other terms and conditions of employment. Costco’s argument that the rule should be read to prohibit only the sharing of the “confidential business component of payroll, such as budgeted payroll and expenses and the like” was rejected. Although the rule also prohibited disclosure of items unrelated to terms and conditions of employment, such as social security and credit card numbers, when read in the context of the entire document, the Board believed that term “payroll information” would reasonably be construed by employees to prohibit protected activity under Section 7 of the NLRA, such as discussing their compensation.
However, that portion of the Costco policy that required employees to use “appropriate business decorum” in communications with others was found to be lawful. The administrative law judge (affirmed by the Board) agreed that an employer may lawfully establish rules providing for a civil workplace. The GC’s contention, that the rule could be interpreted by employees as restricting Section 7 activities, was rejected. Rather, the Board held that the applicable legal standard is whether the rule in question would be construed by employees to restrict Section 7 activity.
Additional cases involving social media issues are likely to be decided by the Board over the next several months. Until further decisions and guidance are issued, employers should consult with legal counsel in crafting their policies. Employers would also be well-advised to avoid broad, vague restrictions (e.g., “non-disparagement”) and restrictions that plainly impinge on protected speech (e.g, “no discussion of wages”). Employers should also include specific examples of prohibited conduct and a “savings clause” or other disclaimer language making clear that the policy is not intended to restrict Section 7 rights.