Terry Corbell, The Biz Coach
By Terry Corbell
Business Consultant

Government Warns Business in Ruling Against Costco on Social Media Policy



Many companies encourage their employees to promote their offerings and services on social media.

But beware, it was bound to happen: The trend has caught the attention of the National Labor Relations Board (NLRB), which can dictate your social media policy.

The NLRB is concerned about your handbook policy and mostly what it forbids employees in posting on social media – e.g. Facebook, LinkedIn and Twitter.

by kdonovangaddy

You’ll be surprised to learn what the board will let employees do; more on that later in this article.

Federal agencies typically follow the political-philosophical dictates of whoever is in power at the White House. Republicans generally appoint employer-friendly regulators vis-à-vis the Democrats who appoint leftwing advocates.

The pendulum has swung since the Bush White House.

Two NLRB case studies

A federal agency is politically motivated? Yep.

Firstly, remember when Obama’s NLRB sided with a union in filing a complaint against Boeing – opposing the creation of 1,000 non-union jobs in South Carolina? (Scroll down to the public-policy paragraphs in this article.)

Secondly, this was also an eye-opener for me when Richard Nixon was in the White House in 1971 when a southern California AM-FM radio station combo terminated me — despite market-leading listener ratings, two promotions and a salary increase.

As a new announcer, my ratings doubled my predecessor’s. Then, I was named news director in morning and afternoon drive on both stations.  The two stations soon captured historically high ratings – a 55 share in the nation’s 26th largest market. I was immensely proud; however, management-employee relations were awful.

Employees voted me their employee spokesperson; again I was proud. But immediately management terminated me and six others. Despite my seemingly airtight case, guess how the NLRB ruled?

The moral: The experience taught me to become entrepreneurial and to learn all about management.

Why Costco lost

So it wasn’t a surprise to me in 2012 when the NLRB used the National Labor Relations Act to rule against Costco in its social media policy. The irony was that Costco’s co-founder, James Sinegal, is a vocal Obama supporter.

Costco’s published policy in its employee handbook forbidding posts that injure anyone’s or the company’s image.

Here’s the Costco wording that drew the ire of the NLRB:

“Any communication transmitted, stored or displayed electronically must comply with the policies outlined in the Costco Employee Agreement. 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, or violate the policies outlined in the Costco Employee Agreement, may be subject to discipline, up to and including termination of employment.”

The NLRB ruled the wording was too far-reaching. The agency stated Costco’s policy would inhibit activities for “the purpose of collective bargaining or other mutual aid and protection.”

The ruling was incredible, but true. It doesn’t matter if your workplace isn’t unionized or trying to organize. Publically criticizing the boss or company is OK in the eyes of the NLRB – even if it destroys a company’s reputation.

Permitted verbiage

Fortunately, the NLRB indicated it’s OK to forbid abusive, malicious or unlawful social comments. That includes intimidation of other employees, harassment, profanity or verbal abuse.

Additionally, the NLRB didn’t OK employees divulging proprietary information, employee personal information or trade secrets.

From the Coach’s Corner, here are additional articles on social media:

Maximize Your ROI from Your Next Event with Social Media — Will you maximize the return on investment in your next event? Whether you’re a nonprofit or business, great social media strategy will promote your event and your brand. In addition, even after your event it’s possible to enhance your return from social-media investment.

8 Tips for Your Social Media to Work Well in E-commerce — Are you just starting out using social media? Well, if used well, social media is an excellent tool to accomplish two goals – connecting with your existing customers and attracting fans for new business.

HR-Social Media Tips for Best Employee Morale, Culture — Social media affects your company’s culture – probably as much as the employees who engage in water cooler gossip. It’s true. Your company’s reputation is affected internally and externally by social-networking sites.

Monitor Social Media to Understand What’s Said, What Isn’t — No doubt, you’ve heard the expression, “Things aren’t always as they seem.” That’s why it’s so important in careers and personal relationships to engage people – to listen, ask questions and weigh the answers. A savvy marketing executive reminds us that things aren’t always as they seem in social media, either.

Social Media Tips for Nonprofits to Capture Fundraising Dollars — Social media has leveled the playing field for small nonprofits competing with large nonprofits in looking for dollars. Formerly, big charities had the advantage because of their efficiency, reputation and size.

“Privacy is dead, and social media hold the smoking gun.”

-Pete Cashmore


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Author Terry Corbell has written innumerable online business-enhancement articles, and is also a business-performance consultant and profit professional.Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.






Seattle business consultant Terry Corbell provides high-performance management services and strategies.