NLRB: Costco Social Media Policy Unlawful

Costco Wholesale’s policy on social media use by employees violates protected communications, according to a recent ruling by the National Labor Relations Board.

Costco Social Media Policy Found UnlawfulOn September 7, the NLRB issued a Decision and Order invalidating Costco Wholesale Corporation’s electronic posting rule; they also found unlawful portions of the employee handbook, which prohibited employees from making statements which “damage the Company, defame any individual or damage any person’s reputation.”

The Board found Costco’s policy overly broad, concluding “the rule would reasonably tend to chill employees in the exercise of their [NLRA] Section 7 rights,” as employees would “reasonably construe the language to prohibit Section 7 activity.”

Earlier this year, the Acting General Counsel released an official report on social media, based on rulings in seven cases relating to policies on the use of social media by employees.

When it comes to employer-issued social media policies, the NLRB ruled that those rules in place would “reasonably tend to chill employees,” thereby violating the National Labor Relations Act.

In exercising rights under the Act, it did not matter if the workforce was unionized.  Using a two-stage review, the NLRB determined some of the policies would have such an action.

The two stage analysis was as following:

  • The Board first examined if the policy explicitly restricts protected activities.  If it did not, the policy is then reviewed on the next level.
  • Could employees reasonably interpret the policy as barring protected activities; the policy was circulated in response to union activity; or the policy was applied to restrict protected activity.

Of the seven policies reviewed by the Board, six contained unlawful provisions.

In one example, a requirement that informed employees of “offensive, demeaning, abusive or inappropriate remarks are as out of place online as they are offline” was unlawful.

The Board found the rules in violation since they, “proscribe a broad spectrum of communications that would include protected criticisms of the Employer’s labor policies or treatment of employees.”

The provision did not specify which communications the company would deem inappropriate at work, making it unclear as to its application to [the NLRA].

Additional provisions found to be unlawful for being too broad:

  • Statements urging employees to resolve work-related concerns through consultation with co-workers, supervisors, or managers, opposed to posting complaints on-line;
  • Rules prohibiting employees from posting information regarding the organization, which may be considered material, nonpublic, confidential or proprietary.
  • Warnings to “avoid harming the image and integrity of the company; ” thereby prohibiting employees from making “disparaging or defamatory” comments.
  • Rules prohibiting communications about the company or its business operations to the media.

Some company policies contained clauses where social media policy would enforced in compliance with applicable laws and regulations. However, the board found that these savings clauses were not enough to make up for otherwise overbroad policies.

The Board posted a sample social media policy, which would be within the law.  Acceptable rules contain specific examples of conduct that is not permitted, instead of broad, undefined prohibitions. Clear, well-defined actions are ideal, ones that employees could reasonably understand what constitutes protected activity.

In light of this decision, HR departments must review company policies regarding social media and reevaluate what would pass NLRB investigation.

A copy of the NLRB rulings and sample of a legitimate Social Media policy can be found at the EmploymentMattersBlog at



Published by @philammann

Put. That coffee. Down. Writer/editor/whatever it takes. @margaretj13 is my (much) better half. Website: Email: Twitter: @PhilAmmann

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