San Francisco partner Heather Sager wrote an article for the Daily Journal on the case of Costco Wholesale Corporation and United Food and Commercial Workers Union, in which the NLRB found Costco's social media policy unlawful because it broadly prohibits online comments "that damage the Company, defame any individual or damage any person's reputation, or violate the policies" in the employer's handbook.

The case marks the National Labor Relations Board’s (NLRB) first advisory formal ruling on social media issues.

Heather analyzes the Costco decision and says the ruling highlights the fact that overbroad prohibitions on making negative comments about employers will be found unenforceable and that issuing employee discipline for doing so might expose employers to unfair labor practice charges and wrongful termination claims.

She notes that “this is ripe to become a new area in privacy and employment litigation. Now is the time for businesses to shore up their policies and practices to try to insulate themselves against the coming tide.”