Audit, Compliance and Risk Blog

Managing Employee Use of Social Media Without Breaking Employment Law

Posted by Jon Elliott on Wed, Oct 24, 2012

employment lawIs your organization one of the many with policies restricting employees’ use of social and other electronic media? If so, you need to consider last month’s National Labor Relations Board (NLRB) decision, finding that Costco’s policy violates the National Labor Relations Act (NLRA). This decision is another recent example of a regulator’s interpretation of ambiguous employer policies in ways that protect employee rights by using the employer’s ambiguity against it – and reinforce that employment law best practices require clarity and narrow drafting.

Costco’s written policy seemed benign, and focused on protecting reputations:

"Any communication transmitted, stored or displayed electronically must comply with the policies outlined in the Costco Employee Agreement. Employees should 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."

Union Organization and "Concerted Activities"

NLRB’s administrative law judge (ALJ) found that employees would not reasonably construe this rule as regulating, and thereby inhibiting, their right to engage in union organization and other “concerted activities” (NLRA Section 7). The ALJ instead found that employees would interpret it as a rule to ensure a “civil and decent workplace.”

On appeal, however, the NLRB’s board members unanimously found Costco’s policy unlawful. To do so, they applied NLRB policy that an employer’s rule violates Section 7 if it “would reasonably tend to chill employees in the exercise of their Section 7 rights.” Although the policy doesn’t mention union-related rights, NLRB found that the prohibition against any statement that might “damage the company … or any person’s reputation”, would clearly cover employee postings protesting Costco’s treatment of its employees. Since the policy includes no disclaimer that NLRA-protected rights are exempt from this policy, NLRB found that employees could reasonably interpret the policy to prohibit their exercise of those rights.

NLRB ordered Costco to notify its employees of the finding, and to rescind the offending language. NLRB also gave Costco the option of revising its policy to address the violation.

Readers of this blog may recall that NLRB issued a similar order in July, ruling that Banner Health Systems had violated the National Labor Relations Act when its human resources (HR) consultant routinely “asked” employees making a complaint not to discuss the matter with their "coworkers” while it investigated their complaints (read the blog here). In both cases, the employers’ actions might have been interpreted as legitimate, but NLRB found them over-broad and unlawful because the employer had not included explicit disclaimers clarifying that the employer was not restricting protected communications.

Whether you agree or disagree with NLRB’s decision, do you believe that your organization’s social and electronic media policies adequately protect the organization without violating the National Labor Relations Act? The following checklist should help you think about these questions.

Implementation Checklist:

• Does my organization have formal policies governing employees’ organization-related postings on social and other electronic media?

• Do these policies prohibit any or all of the following:
- Postings that might defame the organization or any individual?
- Postings that might damage the organization?
- Postings that might damage any individual’s reputation?

• Do these policies discourage any or all of the following:
- Postings that might defame the organization or any individual?
- Postings that might damage the organization?
- Postings that might damage any individual’s reputation?

• Do these policies provide any explicit exception for postings that may be legally-protected communication by the employee, under the National Labor Relations Act and/or other legal frameworks?

Where can I go for more information?

NLRB has posted cast materials including this decision, Costco Wholesale Corporation and United Food and Commercial Workers Union, Local 371 (Case 34–CA–012421) on its website at

Jon ElliottAbout the Author

Jon Elliott is President of Touchstone Environmental and has been a major contributor to STP’s product range for over 25 years. He was involved in developing 16 existing products, including Workplace Violence Prevention: A Practical Guide to Security on the JobSecurities Law: A Guide to the 1933 and 1934 Acts and Directors' and Officers' Liability.

Mr. Elliott has a diverse educational background. In addition to his Juris Doctor (University of California, Boalt Hall School of Law, 1981), he holds a Master of Public Policy (Goldman School of Public Policy [GSPP], UC Berkeley, 1980), and a Bachelor of Science in Mechanical Engineering (Princeton University, 1977).

Mr. Elliott is active in professional and community organizations. In addition, he is a past chairman of the Board of Directors of the GSPP Alumni Association, and past member of the Executive Committee of the State Bar of California's Environmental Law Section (including past chair of its Legislative Committee).

You may contact Mr. Elliott directly at:

Tags: Employer Best Practices, Employee Rights, Internet, NLRB