The NLRB Takes Its Own Advice

On the issue of enforceable social media policies maintained by employers, we have discussed, dissected, and digested plenty of opinions from the Office of the General Counsel of the National Labor Relations Board (“NLRB”).   We have even read the opinions of the few administrative law judges that have weighed in on this issue.   But now, for the first time, the NLRB itself has issued a lengthy decision in which it found that many provisions in Costco’s workplace policies violated its employees’ right to engage in protected concerted activity under the National Labor Relations Act (“Act”).

You will remember that the General Counsel’s office had issued three guidance memoranda, most recently on May 30, 2012 when it provided its greatest insight into why certain social media policies would be deemed unlawful.   With this latest Costco decision by the full Board, the NLRB has apparently accepted the advice of its counsel.

The Costco case began with charges being filed by a union in conjunction with some union organizing activity that was taking place in one of the company’s Connecticut locations.  The charges prompted the NLRB’s Regional Director to issue a complaint against Costco, and a hearing was held before an Administrative Law Judge.   In its September 7th decision, the NLRB addressed specific Costco policies.

The NLRB found the following policies to be unlawful under the Act because they are overbroad: 

  • Generally prohibiting employees from “electronically posting statements that damage the Company . . . or damage any person’s reputation.”
  • Generally prohibiting the “unauthorized posting, distribution, removal or alteration of any material on Company property”.
  • Prohibiting employees from “discussing private matters of members and other employees . . . includ[ing] topics such as, but not limited to, sick calls, leaves of absence, FMLA call-outs, ADA accommodations, workers’ compensation injuries, personal health information, etc.”
  • Prohibiting employees from sharing “payroll” information, and from sharing “confidential information such as employees’ names, addresses, telephone numbers, and email addresses.”

However, the NLRB did hold that the following provisions were lawful: 

  • Requiring employees to “use appropriate business decorum in communicating with others.”
  • Prohibiting employees from “[l]eaving Company premises during working shift without permission of management”, so long as the rule does not state or imply that employees cannot engage in a protected “strike” or “walk out”.
  • Provisions that address “conduct that are reasonably associated with actions that fall outside the Act’s protection, such as conduct that is malicious, abusive, or unlawful.”

As a result of these findings, Costco was ordered to comply with certain remedial directives.   Thus, Costco had to cease and desist from making unlawful rules and policies, take affirmative actions to rescind or modify the unlawful rules, advise its employees that the unlawful provisions have been rescinded, and post notices to all employees of their rights under federal law and what the Company was required to do by the NLRB in this decision.    Beyond those directives, we will all wait to see if Costco decides to avail itself of the opportunity to obtain the first appellate court decision on these important issues.

Employer Take Away:   What should you as an employer take away from this development?   

The enforceability of workplace social media policies continues to be a very fluid issue, and we are just starting to see these issues getting resolved in higher forums.   I am still not convinced that the NLRB’s positions on many of the policies addressed in its Costco decision (and its General Counsel’s memoranda) will ultimately withstand judicial scrutiny.  

Part of the problem here is that the difference between a lawful workplace rule and an unlawful workplace rule lies, as the NLRB has ruled, in “whether the rule would reasonably tend to chill employees in the exercise of their Section 7 rights.”  Yet, the Costco decision does not refer to anything in the record where employees actually testified one way or the other on whether they felt a chilling effect, or whether they construed the rule to prohibit protected activity.  Thus, rulings on liability are made based on how the Board interprets the language, based on whatever context the Board deems relevant or not.

In any case, we will continue to update all developments as they relate to the appropriate boundaries of social media policies.   But it would be wise to re-review your current policies in light of these latest developments to make sure they are clear in what can be appropriately regulated.   For as the NLRB stated, any ambiguity in your rules “must be resolved against the promulgator of the rule rather than the employees, who are required to obey it.”

About The Author

Michael C. Schmidt is the vice chair of the firm’s Labor & Employment Department, and the office managing partner, vice chair, of the New York Midtown office, where he is resident. For more than two decades, Mike has concentrated his practice on representing companies and management in all facets of employment law, such as: (i) defense in litigation involving wage and hour (overtime and unpaid compensation), discrimination, harassment, retaliation and whistle-blowing, non-competes and trade secrets, and disability and other leave-related issues; (ii) day-to-day counseling and in-house training on issues from hiring to firing, and other questions unique to his client’s industries and business; and (iii) drafting and reviewing employment agreements, termination and severance agreements, confidentiality and non-competes, and employment policies and manuals.

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About Social Media Employment Law Blog
Social Media Employment Law Blog is devoted to the interplay between social media and employment law, an extremely topical and significant area of law for employers in this new technology era. Published and edited by Michael Schmidt, Vice Chair of the Labor & Employment Department, Mike concentrates in representing management in all facets of employment law and has been frequently quoted on employment law topics, and is regularly interviewed by trade publications and national journals for his opinions on legal trends.
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