July 5, 2011

The NLRB's New Regulation of Social Media

Holland & Knight Alert

Companies should know that online activities can trigger rights under federal labor law for even nonunion employees.

Most employers who operate workplaces without labor unions think that they are unaffected by the pronouncements of the National Labor Relations Board. They should think again. In a series of recent cases, the NLRB’s general counsel has taken the position that employee activity on social-media sites like Facebook and Twitter can trigger certain rights under federal labor law for even nonunion employees.

For example, in May, the NLRB issued a complaint alleging that a BMW dealership outside Chicago violated the rights of a nonunion car salesman who used his Facebook page to complain about the quality of the food his employer had served at a sales event, complete with photos of the offensive hot dogs and water bottles. The dealership fired him for his posting, which was accessible to his fellow salesmen.

Because the salesman’s comment on the hot dogs and water also mentioned his fear of the negative effects that such meager fare could have on his commissions, the general counsel found that his comment qualified as “protected concerted activity” under § 7 of the National Labor Relations Act (NLRA), which confers on workers the right, among others, to engage in “concerted activities for the purpose of ... mutual aid or protection.” Many employers would be surprised to learn that, under settled law, conversations among workers concerning their compensation is “protected activity” under federal labor law, and the NLRB has for many years been of the view that company policy prohibiting employees from discussing their compensation with one another violates their § 7 rights. See Double Eagle Hotel & Casino, 341 NLRB 112 (2004). Building on that precedent, the labor board in the 21st century has ruled that employers violate federal law if they discipline employees for making Web site statements concerning the terms and conditions of their employment. See Valley Hospital Medical Center, 351 NLRB 1250, 1252-54 (2007), enf’d in part, 2009 WL 4894275 (9th Cir. 2009).

Case law here is not entirely one-sided. Under settled U.S. Supreme Court precedent, employees’ gripes about their employer’s business activities and criticism of their business practices are not “protected activity” under the labor law. See NLRB v. Electrical Workers Local 1229 (Jefferson Standard), 346 U.S. 464 (1953). In one recent case, the general counsel refused to issue a complaint against a New Jersey medical services provider that had disciplined union members and officials who posted comments on Facebook suggesting that they might withhold care for certain patients they found offensive. Monmouth Ocean Hospital Service Corp., Cases 22-CA-29008 (Gen. Counsel Advice Mem. May 5, 2010). Even though the same employees also used their Facebook pages to engage in union-related communication, the employer expressly attributed the discipline to the specific comments that impugned the company’s willingness to serve all prospective patients. The general counsel, therefore, refused to proceed.

Apparently, however, in the BMW case, the auto salesman’s passing reference to his commissions being adversely affected by his employer’s marketing faux pas, along with his co-workers’ access to his Facebook page, provided a sufficient basis for the general counsel to conclude that his activity was worthy of protection by the full weight of federal labor law. If this sounds byzantine, it is.

The labor board’s recent sally into the social-media arena also includes its regulation of company social-media policies that, in its view, are too restrictive of employees’ § 7 rights. Generally speaking, companies violate the NLRA when they issue rules that employees could “reasonably construe” to restrict their § 7 rights – including ones that could be reasonably construed by employees to “bar them from discussing with their coworkers complaints about their managers that affect working conditions.” KLS Claremont Resort, 344 NLRB 832, 836 (2005).

Extending that principle to social media, the general counsel in one recent case took issue with the employer’s “Blogging and Internet Posting Policy,” which prohibited employees “from making disparaging, discriminatory or defamatory comments when discussing the Company or the employee’s superiors, co-workers and/or competitors.” American Medical Response of Connecticut Inc. (AMR), No. 34-CA-12576 (Complaint and Notice of Hearing, Oct. 27, 2010). The NLRB alleged that this policy was impermissibly broad and interfered with its employees’ rights under § 7. It also objected to the company’s discipline of a particular employee under the policy. The company fired the employee for criticizing her supervisor on her Facebook page. In particular, she posted insults including referring to him as a “17,” the AMR shorthand for psychiatric patients. Because these postings drew supportive comments from co-workers, to which the posting employee responded, the general counsel, apparently, saw an analogy to co-worker discussion of complaints about their managers, which under board law is protected activity under § 7. The NLRB issued a complaint challenging the lawfulness of the company’s termination of the employee and the propriety of the underlying policy’s prohibitions.

Not all social-media policies are unlawful, however. In 2009, the general counsel concluded that the social-media policy adopted by retail giants Sears and K-Mart was not unlawful even though, as one element, it forbade employees from disparaging the company’s products, services, leadership, employees, strategy and business prospects. Sears Holdings, No. 18-CA-19081 at 6 (Gen. Counsel Advice Mem. Dec. 4, 2009). Because this provision “appears in a list of plainly egregious conduct, such as employee conversations involving the Employer’s proprietary information, explicit sexual references, etc,” it could not be construed as chilling protected activity in context and when reading the policy as a whole. Comparison of the Sears and AMR cases shows that small differences in wording can make a big difference in outcome. It all depends on what employees would “reasonably conclude” about the restrictions that social-media policies place on activity protected by § 7 of the NLRA.

Employers establishing social-media policies or attempting to clarify their policies in response to the uptick in NLRB activity in this area need to take into account federal labor law principles. The AMR case ended in a settlement that committed the company to amend its Internet posting policy to clarify that the company will not improperly restrict employees’ rights to discuss their wages, hours and working conditions with their fellow employees either on company property during working hours or elsewhere. Employers that want to avoid such express affirmative assertions about protected activity by employees should draft policies that in context and when read as a whole cannot be “reasonably construed” as interfering with employees’ rights to discuss with one another their pay and their gripes about their working conditions. That, though, is no easy task.

Reprinted in full with permission from the June 27, 2011 issue of The National Law Journal © 2011 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited.

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