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Government Continues to Scrutinize Workplace Social Media Policies

On Behalf of | Oct 15, 2012 | Business Litigation


Concerned about its image and the protection of its employees, retail giant Costco enacted a policy restricting employees from making statements on social media sites such as Facebook or Twitter that:

“. . . damage the company, defame any individuals or damage any person’s reputation.”  

The Federal Government caught wind of Costco’s social media policy, and brought an action to stop it on the ground that the policy interfered with the right of Costco employees to band together to improve workplace conditions.  Costco defended the policy by saying it was merely trying to protect the company and its employees from online harassment and disparagement.

The National Labor Relations Board (NLRB) recently ruled that Costco’s policy violated the right of all employees (even non-union employees) to improve workplace conditions.  This is a tough decision for many companies to swallow, since on the surface it appears that Costco’s social media policy was aimed at the type of conduct that would be labeled defamation or disparagement.  But it is actually consistent with many other recent decisions from the NLRB clamping down on any company provisions that it feels could have a chilling effect on the ability of employees to protest against work conditions.

Traditionally, the NLRB has been associated with union workplaces.  But with the decline of union membership nationwide, the NLRB has become more and more active in enforcement actions related to non-union employers.  Social media policies such as the Costco policy at issue in this case have become a prime target of the NLRB’s enforcement arm.  Companies that have not had their employee handbook reviewed in a few years would be wise to undergo a qualified legal review.

Declan Leonard is managing partner of the Washington, DC regional business law firm Berenzweig Leonard, LLP. He can be reached at [email protected].

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