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Clean Up on Aisle 7: Costco?ÇÖs Electronic Posting Policy Chills Protected Activity

As we have explored through previous posts, the general counsel of the National Labor Relations Board, Lafe Solomon, has issued previous reports with guidance on what employers should not include in social media policies.?á Consistent with this guidance, on September 7, 2012, the NLRB issued its first opinion regarding whether a policy that prohibits employees from making ?Ç£damaging?Ç¥ statements about their employer via social media could chill Section 7 rights under the NLRA.

In Costco Wholesale Club, 358 NLRB 106 (2012), a three member panel of the NLRB reviewed the following policy:

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?ÇÖs reputation, or violate the policies outlined in the Costco Employee Agreement, may be subject to discipline, up to and including termination of employment.

An Administrative Law Judge ruled that Costco?ÇÖs employees would not reasonably construe this policy as regulating and thereby inhibiting Section 7 conduct.?á Under Section 7, employees?Çöregardless of union membership?Çöhave a right to engage in protected and concerted activity for their mutual aid and protection.

The Board disagreed with the ALJ and overturned his decision.?á The Board panel, applying traditional labor law (as previously advanced in the reports and guidance by the NLRB?ÇÖs general counsel), analyzed whether Costco?ÇÖs policy explicitly restricts Section 7 rights.?á The panel concluded that it did not.?á It then analyzed under the Lutheran Heritage Village-Livonia standard whether:?á (i) employees would reasonably construe the language to prohibit Section 7 activity; (ii) the policy was promulgated in response to union activity; or (iii) the policy was applied to restrict the exercise of Section 7 rights. 343 NLRB 646 (2004).?á The panel found that it did in that the Costco policy could reasonably be construed by employees to prohibit Section 7 rights.

According to the Board, ?Ç£by its terms, the broad prohibition against making statements that ?Çÿdamage the company, defame any individual or damage any person?ÇÖs reputation?ÇÖ clearly encompass concerted communications protesting [Costco?ÇÖs] treatment of its employees.?Ç¥

While this decision is in step with the previous guidance from the NLRB?ÇÖs general counsel, the Board has now expressly ruled in line with this guidance.?á Once again, if employers have not reviewed their social media policies to ensure that they do not indirectly chill Section 7 rights, this is a timely reminder to do so.

Matthew Deffebach is a partner in the Labor and Employment Practice Group of Haynes and Boone. He is certified by the Texas Board of Legal Specialization as a labor and employment law specialist. In 2010, Law360 named him a rising star and one of 10 employment lawyers under 40 to watch. He was selected for inclusion in Texas Super Lawyers - Rising Stars Edition (2005-2010). Matthew was recognized as a Texas Super Lawyer by Texas Monthly in Employment and Labor (2010-2011).

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