This fall, the National Labor Relations Board (NLRB or the Board) issued its first rulings interpreting the application of the National Labor Relations Act (the Act) to an employee’s posting of derogatory statements concerning his employer on social media. In short, under Section 7 of the Act, “employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . .,” and, under Section 8(a)(1) of the Act, employers are prohibited from interfering with or restraining employees from exercising those rights. As more and more people express their views about their employers and the jobs they perform using one or more of the many social media sites, employers must be careful to avoid violating the Act when: (i) attempting to regulate their employees’ speech; and (ii) disciplining employees for sharing their opinions on social media.

In both decisions, the NLRB has struck down policies which the Board viewed as illegal attempts to restrict employees from publishing negative statements about their employer.

First, in Costco Wholesale Corporation, 358 NLRB No. 106 (NLRB 2012), the NLRB held that Costco violated Section 8(a)(1) of the Act “by maintaining a rule prohibiting employees from electronically posting statements that ‘damage the Company . . . or damage any person’s reputation.’” The NLRB based its decision on its finding that employees would reasonably construe this rule as one that prohibits Section 7 activity.

Since Costco’s policy broadly prohibited any statements that would “damage the Company, defame any individual or damage any person’s reputation,” the NLRB held that the policy would encompass concerted actions by its employees to protest Costco’s treatment of its employees; such communications are protected under Section 7. Specifically, the NLRB was troubled by the fact that the policy did not include a carve-out for concerted activities protected by Section 7. Thus, the NLRB held that the blanket prohibition on any communication that damages the Company violates Section 8(a)(1) of the Act because employees must be able to engage in concerted activities that are critical of their employers or the agents of their employers.

Similarly, in Karl Knauz Motors, Inc., 358 NLRB No. 164 (Sept. 28, 2012), the NLRB held that the employer’s “Courtesy” policy violated Section 8(a)(1) of the Act. In this case, the employer, a BMW dealership, maintained a rule in its handbook stating:

Courtesy: Courtesy is the responsibility of every employee. Everyone is expected to be courteous, polite and friendly to our customers, vendors and suppliers, as well as to their fellow employees. No one should be disrespectful or use profanity or any other language which injures the image or reputation of the Dealership.

Relying upon its recent decision in Costco, the NLRB held that the policy was impermissibly overbroad because there is “nothing . . . that would reasonably suggest to employees that employee communications protected by Section 7 of the Act are excluded from the policy’s reach.” Thus, a seemingly innocuous policy espousing basic levels of courtesy and common sense may be viewed as violative of the Act if it broadly prohibits any language that would injure the image or reputation of the employer.

In addition to striking down the dealership’s policy, the NLRB upheld the decision of the Administrative Law Judge (ALJ) who concluded that the dealership’s decision to discharge a salesperson for an inappropriate Facebook posting did not violate the Act. While the NLRB did not address the underlying facts in its decision—thus providing no explicit guidance—the ALJ’s decision remains instructive. In his decision, the ALJ focused primarily on two postings by former employee Becker: a complaint about the food the dealership provided to customers at a sales event and a sarcastic message making light of damage to a vehicle that occurred after a salesperson allowed the son of a customer to get behind the wheel in the car lot. The ALJ found that the posting about food provided to customers constituted protected, concerted activity because the post was the “logical outgrowth” of discussions the salesperson and a coworker had concerning the impact of the sales event on their ability to earn money.

Ultimately, the ALJ held that the post about the accident was not protected, concerted activity because “it was posted solely by [the salesperson] . . . without any discussion with any other employee of [Karl Knauz], and had no connection to the any of the employees’ terms and conditions of employment.” Based on testimony given at the hearing, the ALJ was convinced that the salesperson was fired because of his Facebook posting concerning the accident, and he upheld the discharge.

The most significant lesson to be learned from Costco and Karl Knauz is that the NLRB, as it is currently constructed, will continue to view policies which broadly prohibit employee statements that damage the company to be a violation of Section 8(a)(1) of the Act–no matter how innocuous or sensible those policies may be. Thus, it is imperative for companies that promulgate and enforce policies related to statements outside of work and non-disparagement to review those policies to ensure compliance with the NLRA and the NLRB’s recent cases.

As these cases represent the NLRB’s initial foray into interpreting the Act with respect to social media, we expect that this line of precedent will be refined and clarified in the near future. We will continue to update you on this evolving area of the law as events unfold.