Employers: New California Law and New NLRB Decision On Social Media

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September was a rather busy month for new developments regarding social media in the workplace.  In early September, the National Labor Relations Board (“NLRB”) issued its decision regarding various employee policies of Costco Wholesale Corp.  This is the first time the NLRB has issued a decision on many policies that typically appear in a company’s social media policy.  Then, in the last week of September, California became the third state to pass a law regulating when employers may request and access employee social media accounts.  Both of these events are significant because they are breaking new ground.  Let’s start with the NLRB decision.

The NLRB’s Binding Decision

As I warned a few months ago, those interested in issues regarding social media in the workplace must keep an eye on the National Labor Relations Board.  Up until very recently, the NLRB did not have much relevance to non-unionized workplaces.  Now, however, the NLRB has been raising its profile with respect to many workplace issues ranging from enforceable social media policies to whether internal investigations  of employee conduct can remain confidential.  Since August 2011, the Acting General Counsel of the NLRB has issued three fairly comprehensive “Operations Management Memos” regarding his office’s position on a variety of issues concerning social media policies in the workplace.  None of the Acting General Counsel’s Memos were binding, or held the force of law.  Instead, they contained only the enforcement position that the NLRB’s office of attorneys would follow when dealing with cases where social media policies are at issue.  In the NLRB’s Acting General Counsel’s third Memo on social media policies, dated May 30, 2012, he detailed six cases where his office found some provisions of the employer’s social media policy to be lawful.  In the seventh case, the entire policy was found to be lawful. (The policy belonged to Wal-Mart).  As part of his report, he also published the fully approved policy.

Those Memos, and the positions expressed by the Acting General Counsel, were finally tested when the NLRB issued a binding decision on September 7, 2012 in a case involving Costco Wholesale Corp.  In this case, the NLRB did not analyze a specific social media policy, but rather an employee handbook containing may provisions that are typically a part of a social media policy.  Here, one of the policies the NLRB focused on was Costco’s online communications policy, which stated in part:

“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 . . . may be subject to discipline, up to and including termination of employment.”

Generally, it is not difficult to understand why any company would desire to have such a policy – no company wants to allow employees to damage the company, or defame another person.  In fact, before the case reached the NLRB, the Administrative Law Judge determined that Costco’s policy attempted to maintain a “civil and decent workplace,” and was, therefore, fine.  The Board, however, held that the policy violated employees’ Section 7 rights under the National Labor Relations Act (NLRA).  As you may recall, under Section 7 of the NLRA, employees have the “right” to  participate in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.”  Under this section of the NLRA, concerted activity is considered “protected” when it concerns terms or conditions of employment.  So, the Board held that Costco’s policy was too broad and that it “clearly encompasses concerted communications protesting [Costco’s] treatment of its employees.”   The Board determined that Costco’s policy would “chill” employees from exercising their Section 7 rights by undermining the employees’ ability to complain about Costco’s treatment of its employees.

The Board offered, however, that if Costco’s policy had included a reference that its policy did not mean to include activities protected by Section 7 of the NLRA, then perhaps it would have found the policy to be lawful.  Additionally, the Board offered that the following examples of policy language would be permissible:   (a) “malicious, abusive or unlawful;” (b) “profane language” and “harassment;” (c) “injurious, offensive, threatening, intimidating, coercing, or interfering with” other employees; and (d) “slanderous or detrimental to the company” when “among a list of 19 rules which prohibited egregious conduct such as ‘sabotage or sexual or racial harassment’.”

What Does The NLRB’s Decision Mean?

The most significant best practice for employers is to learn is that any policy prohibiting damaging or defamatory speech should include a list, or examples, of the types of prohibited speech.  Don’t have a general policy; instead, be specific.  Also, be sure to throw a Section 7 disclaimer in the policy:  “This policy does not prohibit lawful speech protected by Section 7 of the National Labor Relations Act.”  The Board wanted clarity and examples so that Costco’s employees would know what they can and cannot post.  Likewise, the NLRB’s Acting General Counsel called for more specificity and approved Wal-Mart’s policy that contained the following, easier to understand, language:  “make sure you are always honest and accurate,” and  “never post any information or rumors that you know to be false.”

Just The Third Of Its Kind

On September 27, 2012, California Governor Jerry Brown used Twitter and Facebook to announce two new laws that he had signed regarding social media.  He wrote:  “California pioneered the social media revolution. These laws protect Californians from unwarranted invasions of their social media accounts.”  Generally, the new California law is similar to laws passed in Maryland and Illinois earlier this year.  California employers now face specific restrictions regarding access to their employees’ social media accounts.  And, California employers are now prohibited from discharging, disciplining, threatening or otherwise retaliating against an employee or job applicant for not complying with the employer’s demand for social media access.  Generally, as I’ve blogged about before, employers should not be asking applicants and/or employee’s for social media login credentials or information as doing such could be considered an invasion of privacy, a breach of the social media site’s user agreement, and could give rise to unintended lawsuits regarding discrimination and retaliation, for example.  As a result, the California law (AB 1844), like the law in Maryland and Illinois (and the 13 other states considering enacting similar laws), is a bit of overkill to address an ill-advised practice that most employers do not, and never did, engage in.

Importantly, the California law carves out two significant exceptions to the general rule of no employer access.  1)  The law allows an employer to obtain passwords or other information needed to access employer-issued electronic devices.  Indeed, it is a best practice for employers to obtain login credentials to company-related social media accounts and company-provided electronic devices.  Employers should obtain (or assign) such login credentials early in the employment relationship before any disputes arise.  2)  The law also recognizes an employer’s “existing rights and obligations to request an employee to divulge personal social media reasonably believed to be relevant to an investigation of allegations of employee misconduct or employee violation of applicable laws and regulations, provided that the social media is used solely for purposes of that investigation or a related proceeding.”

Where Do Employers Go From Here?

The NLRB is continuing to take the lead on analyzing social media policies in the workplace.  Employers should continue to monitor the NLRB and adapt their policies and/or practices accordingly.  Additionally, as California becomes the third state to enact a social media access law concerning employers, California companies must be sure to comply with the new law.  In addition, multi-state employers need to keep track of which states are passing laws, and how each state law differs from the others.  Indeed, the California, Maryland, and Illinois laws are all different, and employers with operations in all three states must be sure to comply with each state’s version of the law.

Information provided on this website is not legal advice, nor should you act on anything stated in this article without conferring with the Author or other legal counsel regarding your specific situation.

About the Author:

James Wu

This monthly Social Media and Employment Law column is contributed by James Y. Wu. For over 15 years, James has provided day-to-day counseling and advice to employers regarding compliance with employment laws and reducing the risks of employment-related claims and lawsuits. He also provides strategic litigation services when claims and lawsuits do arise. After practicing at some of the nation’s leading law firms, James opened his own law office in order to continue to provide his top-notch service at a much more reasonable rate for his clients. James earned his JD from Boston College Law School and both his BA and MA from Stanford University. +James Wu

James Wu
This monthly Social Media and Employment Law column is contributed by James Y. Wu. For over 15 years, James has provided day-to-day counseling and advice to employers regarding compliance with employment laws and reducing the risks of employment-related claims and lawsuits. He also provides strategic litigation services when claims and lawsuits do arise. After practicing at some of the nation's leading law firms, James opened his own law office in order to continue to provide his top-notch service at a much more reasonable rate for his clients. James earned his JD from Boston College Law School and both his BA and MA from Stanford University. +James Wu
James Wu
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  1. […] This next issue is not quite as obvious.  Let’s say your company has a policy prohibiting employees from using social media “on company time.”  Seems fair, right?  I mean, if your job has nothing to do with the use of social media, your employer should be able to prohibit you from using social media when you are “on company time.”  After all, you are “on company time,” so you should be working, not updating your Facebook status, and not using Facetime to video chat with a friend.  Well, the National Labor Relations Board (“NLRB”) (yes, them again) has a different viewpoint.  An administrative law judge (“ALJ”) recently determined that a social media policy prohibiting employees from using social media on company time was invalid.  This is so because the NLRB argued that “company time” is ambiguous and could actually include non-work times (like rest and meal breaks, for example).  And, thus, the employer’s policy had a chilling effect on its employees’ ability to exercise their rights under Section 7 of the National Labor Relations Act (“NLRA”).  Even though the employer argued that it faced a significant problems with employees using social media for personal reasons at work, ultimately the ALJ sided with the NLRB.  Here is the full decision of the NLRB ALJ in this EchoStar Technologies, LLC case.  (For more background on the NLRB and Section 7 of the National Labor Relations Act, please see my prior posts including one titled: Employers:  New California Law and New NLRB Decision On Social Media). […]

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