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NLRB Costco Decision

NLRB Costco Decision

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Published by pcvanslyke
First NLRB Decison on provisons of typical social media polcies that violate NLRB Act
First NLRB Decison on provisons of typical social media polcies that violate NLRB Act

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Published by: pcvanslyke on Sep 28, 2012
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358 NLRB No. 106
This opinion is subject to formal revision before publication in thebound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C.20570, of any typographical or other formal errors so that correctionscan be included in the bound volumes.
Costco Wholesale Corporation
United FoodandCommercial Workers Union, Local 371.
Case 34
12421September 7, 2012DECISION AND ORDER B
On August 11, 2010, Administrative Law JudgeSteven Fish issued the attached decision. The Respon-dent filed exceptions and a supporting brief, the ActingGeneral Counsel filed an answering brief, and the Re-spondent filed a reply brief. Additionally, the ActingGeneral Counsel filed limited cross-exceptionsand asupporting brief, and the Respondent filed an answer-ing brief.
The National Labor Relations Board has delegatedits authority in this proceeding to a three-member  panel.The Board has considered the decision and the re-cord in light of the exceptions and briefs andhas de-cided to affirm the judge’s rulings, findings,
and con-clusions only to the extent consistent with this Deci-sion and Order.
For the reasons stated by the judge, we adopt hisfindings that the Respondentviolated Section 8(a)(1)of the Act by maintaining rules
stating that:
The Respondent also filed a motion to reopen the record and/or for rehearing, and the Acting General Counsel filed an opposition tothat motion. In its motion, the Respondent seeks to introduce evi-dence of revised rules that it issued in March 2010, after the close of the hearing. The Respondent contends that this evidence is relevantto the remedy for any rules we find unlawful herein. We deny theRespondent’s motion, as there has been no showing that the evi-dence it seeks to introduce would require a different result, as re-quired under Sec. 102.48(d)(1) of the Board’s Rules and Regula-tions. Our denial of the motion, however, is without prejudice to theRespondent’s ability to introduce any such evidence in the compli-ance stage of this proceeding.
There are no exceptions to the judge’s dismissal of the allega-tion that the Respondent violated Sec. 8(a)(1) of the Act by interro-gating two employees.
We shall modify the judge’s recommended Order in accordancewith our findings, and shall include the Board’s standard remediallanguage for the violations found. We shall also modify the judge’srecommended Order to provide for the posting of the notice in ac-cord with
 J. Picini Flooring 
, 356 NLRB No. 9 (2010).
In considering the lawfulness of the Respondent’s work rules,we do not rely on
Crowne Plaza Hotel 
, 352 NLRB 382 (2009), acase issued by two Board Members and cited by the judge. See
 New Process Steel, L.P. v. NLRB,
130 S.Ct. 2635 (2010);
 Hospital Pavia Perea
, 355 NLRB 1300, 1300 fn. 2 (2010) (recognizing that twoBoard Members “lacked authority to issue an order”).
(a) “unauthorized posting, distribution, re-moval or alteration of any material on Company property” is prohibited;(b) employees are prohibited from discussing“private matters of members and other employees. . . includ[ing] topics such as, but not limited to,sick calls, leaves of absence, FMLA call-outs,ADA accommodations, workers’ compensationinjuries, personal health information, etc.”;(c) “[s]ensitive information such as member-ship, payroll, confidential financial, credit cardnumbers, social security number or employee per-sonal health information may not be shared,transmitted, or stored for personal or public usewithout prior management approval”; and(d) employees are prohibited from sharing“confidential” information such as employees’names, addresses, telephone numbers, and emailaddresses.We also adopt, for the reasons stated in his decision,the judge’s dismissal of the complaint allegation thatthe Respondent violated Section 8(a)(1) bymaintain-ing a rule requiring employees to use “appropriate business decorum” in communicating with others.Contrary to the judge, however, and as explained be-low, we find that the Respondent violated Section8(a)(1) by maintaining a rule prohibiting employeesfrom electronically posting statements that “damagethe Company . . . or damage any person’s reputation.”Further, and also contrary to the judge, we find that theRespondent did not violate Section 8(a)(1) by main-taining a rule prohibiting employees from “[l]eavingCompany premises during working shift without per-mission of management.”
The judge found that the Respondent’s maintenanceof the following rule, in section 11.9 of its employeehandbook (Employee Agreement), did not violate Sec-tion 8(a)(1):Any communication transmitted, stored or displayedelectronically must comply with the policies outlinedin the Costco Employee Agreement. Employeesshould be aware that statements posted electronically(such as [to]online message boards or discussiongroups) that damage the Company, defame any indi-vidual or damage any person’s reputation, or violatethe policies outlined in the Costco EmployeeAgreement, may be subject to discipline, up to andincluding termination of employment.In dismissing this allegation, the judge found that em- ployees would not reasonably construe this rule as regu-lating, and thereby inhibiting, Section 7 conduct. Citing
2(2004),the judge instead found that employees wouldreasonably infer that the Respondent’s purpose in prom-ulgating the rule was to ensure a “civil and decent work- place.”Contrary to the judge, we find employees would rea-sonably construe this rule as one that prohibits Section7 activity.In determining whether the maintenance of a work rule violates Section 8(a)(1), the appropriate inquiry iswhether the rule would reasonably tend to chill em- ployees in the exercise of their Section 7 rights.
326 NLRB824, 825 (1998), enfd.203 F.3d 52 (D.C. Cir. 1999).If the rule explic-itly restricts Section 7 rights, it is unlawful.
supra.If it does not, “theviolation is dependent upon a showing of one of thefollowing: (1) employees would reasonably construethe language to prohibit Section 7 activity; (2) the rulewas promulgated in response to union activity; or (3)the rule has been applied to restrict the exercise of Sec-tion 7 rights.”Id. at 647.Here, the Respondent’s rule does not explicitly ref-erence Section 7 activity. However, by its terms, the broad prohibition against making statements that“damage the Company, defame any individual or dam-age any person’s reputation” clearly encompasses con-certed communications protesting the Respondent’streatment of its employees. Indeed, there is nothing inthe rule that even arguably suggests that protectedcommunications are excluded from the broad parame-ters of the rule. In these circumstances, employeeswould reasonably conclude that the rule requires themto refrain from engaging in certain protected commu-nications (i.e., those that are critical of the Respondentor its agents). See
Southern Maryland Hospital 
, 293 NLRB 1209, 1222 (1989), enfd. in relevant part 916F.2d 932, 940 (4th Cir. 1990) (rule prohibiting “de-rogatory attacks on . . . hospital representative[s]”found unlawful);
Claremont Resort & Spa
, 344 NLRB832 (2005) (rule prohibiting “negative conversationsabout associates and/or managers” found unlawful);
 Beverly Health & Rehabilitation Services
, 332 NLRB347, 348 (2000), enfd. 297 F.3d 468 (6th Cir. 2002)(rule that prohibited “[m]aking false or misleadingwork-related statements concerning the company, thefacility or fellow associates” found unlawful).The cases relied on by the judge are distinguishable.Most involved rules addressing conduct that is rea-sonably associated with actions that fall outside theAct’s protection, such as conduct that is malicious,abusive, or unlawful. See, for example,
 Lutheran Heritage Village-Livonia
, supra, 343 NLRB at 647– 649 (rule addressing“verbal abuse,” “abusive or pro-fane language,” and “harassment”);
344 NLRB 1363, 1367–1368 (2005)(rule ad-dressing “conduct which is injurious, offensive, threat-ening, intimidating, coercing, or interfering with” other employees).
Tradesmen International,
338 NLRB 460, 460-463 (2002), also cited by the judge, the Board foundlawful a rule that prohibited “statements which areslanderous or detrimental to the company or any of thecompany’s employees.” We note however, that thisrule was among a list of 19 rules which prohibitedegregious conduct such as “sabotage and sexual or racial harassment.” In finding that the maintenance of the rule did not violate Section 8(a)(1), the Board’sanalysis followed the dictates of 
 Lutheran Heritage
,which require that the rule be considered in context.343 NLRB at 647 fn. 6.In contrast, the Respondent’s rule does not presentaccompanying language that would tend to restrict itsapplication. It therefore allows employees to reasona- bly assume that it pertains to -- among other things --certain protected concerted activities, such as commu-nications that are critical of the Respondent’s treatmentof its employees. The Respondent’s maintenance of the rule thus has a reasonable tendency to inhibit em- ployees’ protected activity and, as such, violates Sec-tion 8(a)(1).
Section 11.3 of the Respondent’s handbook lists anumber of actions that may lead to an employee’s im-mediate discharge. One such action is “[l]eavingCompany premises during working shift without per-mission of management.” The judge found that theRespondent’s maintenance of this rule violated Section8(a)(1) because it “inhibits the employees’ rights toengage in Section 7 activity (i.e., strike).” We dis-agree.In
2 Sisters Food Group
, 357 NLRB No. 168(2011), the Board held that the maintenance of asimi-lar rule, prohibiting“[l]eaving a department or the
Other cases cited by the judge are similarly distinguishable, asthey addressed conduct rather than merely addressing statements, or  because they addressed the use of abusive, threatening or slanderousstatements. See
 Lafayette Park Hotel 
, supra, 326 NLRB at 825–826;
 Adtranz ABB Daimler Bentz v. NLRB
, 253 F.3d 19, 25–28 (D.C. Cir.2001);
 Ark Las Vegas Restaurant Corp.
, 335 NLRB 1284, 1291– 1292 (2001), enfd. 334 F.3d 99 (D.C. Cir. 2003);
 Albertson’s, Inc.
,351 NLRB 254, 258-259 (2007).
Although no party argues its applicability, we note that this ruledoes not implicate the Board’s holding in
 Register Guard 
, 351 NLRB 1110 (2007), enfd. in relevant part 571 F.3d 53 (D.C. Cir.2009). The issue in
 Register Guard 
was whether employees had astatutory right to use their employer’s email system for Sec. 7 pur- poses. The Board found that the employer did not violate Sec.8(a)(1) by prohibiting the use of the employer’s email for “nonjob-related solicitations.” Here, the rule at issue does not prohibit usingthe electronic communications system for all non-job purposes, butrather is reasonably understood to prohibit the expression of certain protected viewpoints. In doing so, the rule serves to inhibit certainkinds of Sec. 7 activity while permitting others and, for this reason,violates Sec. 8(a)(1).
.3 plant during a workingshift without a supervisor’s permission,” did not violate Section 8(a)(1). TheBoard found that this rule was not unlawful on its faceand that employees wouldnot reasonably construe it to prohibit Section 7 activity.
The Board explained thatthe rule was distinguishable from a rule, found unlaw-ful in
 LaborReady, Inc.
, 331 NLRB 1656, 1656 fn. 2(2000), prohibitingemployees from “walk[ing] off”the job. The Board found that whereas a rule’s refer-ence to a term similar to “walk out” (a synonym for astrike) would reasonably lead employees to believethat the rule prohibited a strike, the mere reference toleaving a department or plant would not be similarlyconstrued as pertaining to Section 7 activity.
2 Sisters
,supra, slip op. at 2–3.Here, the Respondent’s rule is similar to the rulefound lawful in
2 Sisters
, as it prohibits “[l]eavingCompany premises during working shift without per-mission,” and does not include a reference to any termthat would reasonably be construed as similar to theterm strike or “walk out.” In these circumstances, thereference to leaving the premises during worktimewould be reasonably understood as pertaining to em- ployees leaving their posts (for reasons unrelated toconcerted activity) without first seeking permission.Accordingly, there is no meaningful distinction be-tween the Respondent’s rule and the rule in
2 Sisters
 Therefore, we shall dismiss this complaint allegation.
1. Substitute the following for the judge’s Conclu-sion of Law 3.“3. The Respondent has violated Section 8(a)(1) of the Act by maintaining rules in its “Employee Agree- 
The Board considered that rule together with a rule prohibitingemployees from “stopping work before shift ends or taking unau-thorized breaks.” Id.
Our dissenting colleague contends that the absence of referencesto other prohibitions, such as those found in the
2 Sisters
handbook,makes it more likely that employees would understand that the rulerestricts protected activity. We disagree. Because employees wouldnot typically refer to a protected strike as “leaving the premises,” wefind no basis to conclude that employees would reasonably construethe rule to prohibit Sec. 7 activity.
Contrary to his colleagues, Chairman Pearce would adopt the judge’s finding that the Respondent’s rule violated Sec. 8(a)(1). Heagrees with the judge that employees would reasonably construe thereference to leaving the premises without management permission asa rule prohibiting employees from engaging in a protected strike. Inthe Chairman’s view, the instant rule is distinguishable from the rulefound lawful in
2 Sisters
, supra.
In that case, the prohibition againstleaving the plant was presented together with references to terms nottypically used when referencing strike activity, specifically, leavingthe department and taking unauthorized breaks. By consideringthese prohibitions together, employees would not reasonably con-strue them as encompassing strike activity. Conversely, the instantrule broadly references leaving the “premises,” without any accom- panying language of limitation. In these circumstances, employeeswould reasonably read the rule as one that covers a concerted walk-out or other strike activity and, as such, it would tend to inhibit em- ployees from exercising their Sec. 7 right to engage in a strike.
ment” that prohibit the unauthorized posting, distribu-tion or alteration of any material on Company prop-erty, that may reasonably be interpreted as prohibitingemployees from discussing their wages and other terms and conditions of employment with other em- ployees and third parties, including union representa-tives, that may reasonably be interpreted as prohibitingemployees from sharing or storing wage informationor information relating to other terms and conditions of employment of employees without permission of man-agement, that prohibit employees from posting mes-sages that “damage any person’s reputation,” and that prohibit the removal of confidential material fromCompany premises, which Respondent has defined asconduct that may reasonably be interpreted as includ-ing wages and other terms and conditions of employ-ment of its employees.”ORDER The National Labor Relations Board orders that theRespondent, Costco Wholesale Corporation, Milford,Connecticut, its officers, agents, successors, and as-signs, shall1. Cease and desist from(a) Maintaining provisions in its Employee Agree-ment that prohibit the unauthorized posting, distribu-tion, or alteration of any material on company prop-erty.(b) Maintaining provisions in its Employee Agree-ment that may reasonably be interpreted as prohibitingemployees from discussing their wages and conditionsof employment with other employees and third parties,including union representatives.(c) Maintaining provisions in its Employee Agree-ment that may reasonably be interpreted as prohibitingits employees from sharing or storing wage informa-tion or information relating to other terms and condi-tions of employment of employees without permissionof management.(d) Maintaining provisions in its Employee Agree-ment that prohibit employees from electronically post-ing statements that damage any person’s reputation.(e) Maintaining provisions in its Employee Agree-ment that prohibit the removal of confidential materialfrom company premises, which the Respondent hasdefined as conduct that may reasonably be interpretedas including wages or other terms and conditions of employment of its employees.(f) In any like or related manner, interfering with,restraining or coercing employees in the exercise of rights guaranteed them by Section 7 of the Act.2. Take the following affirmative actions necessaryto effectuate the policies of the Act.(a) Rescind or modify the language in the following provisions of its Employee Agreement.1. Sections 11.3.4 and 4(a) and 11.3.22.

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