In the news recently, Costco was wrapped over the knuckles because of their loose social media policy – the National Labor Relations Board says it limits employee’s ability to access ‘collective bargaining’ online. Today, we take a closer look at the policy that infringed on Costco employees legal rights.

The Costco Policy

The statement in question published and made ‘the rules’ by Costco stated:

“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.”

What’s wrong with this? It’s too BROAD. Strip away the general legal language and you have a multinational corporation, publicly proclaiming that they can fire anyone for anything an employee posts or comments online.

If they don’t like it – you’re fired. That was the real issue that the NLRB had with Costco’s policy. We’re running into some basic social media policy mistakes here. First of all, why did Costco create such a ridiculous policy that infringed on the legal rights of its employees?

Because like so many other companies – social media policy isn’t seen to be THAT important. Just get Margaret in accounting to mock up some random nonsense that she found online, let’s not get the legal team involved.

Social Media Policy Is Law

A policy by definition is an important document. It comes with its own set of rules that can legally be enforced by the imposing company. Costco’s first mistake was thinking that such outlandish, broad and frankly – insulting – statements could be made on an official policy document for the corporation.

The ruling that this

and other clauses in Costco’s social media policy, has many other companies taking a hard look at their own ‘cobbled together’ policies. EchoStar was similarly penalized after the Costco ruling became precedent.

It would be unwise to think that other brands will get away with general statements in their social media policies. That means you, other brand!

Flipping Through Your Social Media Policy: The Fixes

So, what did we learn today thanks to our friends over at EchoStar and Costco?

• Your social media policy needs to be specific – very specific. The courts say you can’t make sweeping statements about damaging a company’s reputation online. I assume this goes for individuals as well.
• Social media has grown to be a marketing tool. While many brands are still getting used to the idea that social media exists, we know that it’s the MOST EFFECTIVE form of marketing, and will be for the next 20 years.
• You can’t restrict the free speech of an employee, threatening to fire them if they say the wrong thing in a tweet or blog comment. What you should be doing is outlining what they can say, so that they use social media in your favor.
• You need to have a strong, legally binding, well thought out social media policy. The law is already involved. To cover yourself, and your employees – make yours count. They’ll be using Facebook with or without your permission.
• You can’t fire an employee for saying something genuinely outrageous online about your company, if it’s not outlined in your social media policy. The really nasty employees that deserve to be fired will get away with murder, and it will be your own fault!

The moral of the story is – have a good social media policy. Respect your employees, and the gigantic mouthpieces they can be when set lose online!

Do you agree with the court’s ruling? Give us your opinion on the Costco policy debacle!