March 20, 2015 – In a report issued earlier this week, the National Labor Relations Board (“NLRB” or the “Board”) discussed the intersection of companies’ copyrights and trademarks, on the one hand, and employees’ rights under the National Labor Relations Act (the “Act”), on the other. Employers may be surprised to learn that the NLRB views policies prohibiting employees’ use of company intellectual property, such as logos, as an impermissible burden on the right, guaranteed by the Section 7 of the Act, “to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection…”

On this basis, the NLRB has struck down employer rules such as:

• Do not use any Company logos, trademarks, graphics, or advertising materials in social media.
• Use of the employer’s name, address or other information in your personal profile [is banned] … In addition, it is prohibited to use the employer’s logos, trademarks or any other copyrighted material.
• Company logos and trademarks may not be used without written consent…

As the NLRB report explains, “though copyright holders have a clear interest in protecting their intellectual property, handbook rules cannot prohibit employees’ fair protected use of that property. For instance, a company’s name and logo will usually be protected by intellectual property laws, but employees have a right to use the name and logo on picket signs, leaflets, and other protest material. Employer proprietary interests are not implicated by employees’ non-commercial use of a name, logo, or other trademark to identify the employer in the course of Section 7 activity. Thus, a broad ban on such use without any clarification will generally be found unlawfully overbroad.”

In the leading decision on the issue, Pepsi-Cola Bottling Co., the NLRB found unlawful Pepsi’s rule forbidding employees to wear their uniforms, which bore the logos of the company and its products, during any off-duty activities. Specifically, the policy stated in part

Employees should wear their uniforms only while actually engaged in the performance of their duties as employees or while in transit directly to or from work. Do not wear your uniform at any other time or place as expressly authorized in advance by an officer of this company. Any employee who is observed to be wearing a uniform while in a disreputable place or while engaging in conduct which reflects adversely upon that uniform and/or the products it is identified with will be in violation of this regulation. This regulation prohibits wearing the uniform while engaging in any personal business, or in any public demonstration of any kind. While this Company respects the rights of its employees to engage or not to engage in union activity, we must point out that this regulation will operate to prohibit the conducting of union activities in public places by any employee while wearing a uniform.

While Pepsi explicitly recognized that the rule imposed a limitation on protected activity, it failed to persuade the NLRB that it had an adequate justification for that limitation. (The Board was not swayed by evidence that Pepsi had disciplined employees for being intoxicated while in uniform or for wearing a uniform while standing outside what the Board described as “a girlie show.”) Thus, the NLRB found that the rule was “an excessive impediment to employee union activity” and that as such it violated the Act.

More recently, an Administrative Law Judge refused to invalidate portions of General Motors’ social media policy prohibiting employees from “incorporate[ing] GM logos [or] trademarks … in [their] posts.” The judge noted that “[e]mployees do have a Section 7 right to use their employer’s name or logo in conjunction with protected concerted activity, such as to communicate to fellow employees or the public about a labor dispute.” But he refused to read the Pepsi decision broadly enough to render all efforts by an employer to limit employees’ use of its trademarks violative of the Act.

The judge observed that “Section 32 of the Lanham Act imposes liability for trademark infringement on any person who, without the consent of the owner of the trademark, uses it for any number of enumerated commercial purposes. … On the other hand, if the use of the trademark is for expressive purposes, i.e., to communicate an idea, such as commentary, comedy, parody, news reporting or criticism, it is considered noncommercial and falls within the protections of the First amendment.” Of course, the issue before the judge was “not the constitutionality of the restriction but whether it would reasonably lead employees to believe that it interferes with their Section 7 rights. “

Despite having framed the issue as one of the employees’ understanding of the rule, the judge focused his analysis on GM’s motives for enacting the rule. According to GM, its goal was to “protect the public (the consumers) from being confused and mistakenly believing that a posted communication is an official one from GM rather than from some independent entity.” The judge found no reason to doubt that this was GM’s true motive and in particular found no evidence that GM intended to discriminate against or burden the union representing its workers.

The NLRB’s General Counsel took issue with the judge’s decision, emphasizing that GM’s social media policy “prohibited every online use of GM’s name or logo, including the posting of all photographs that identify GM its facilities, and its uniformed staff…” This broad prohibition, in the General Counsel’s view, distinguished GM’s rule from employer policies – such as a hotel’s rule forbidding employees from wearing their work uniforms when off hotel grounds – that had been upheld based on the employer’s interest in avoiding falsely conveying to the public that an off-duty employee was acting on the employer’s behalf. GM’s rule, according to the General Counsel, interfered “far more invasively” with employees’ rights under the Act than did the hotel’s uniform policy.

The General Counsel was similarly not persuaded that GM’s rule was justified by the company’s need to protect its intellectual property. The GC argued that none of the objectives of trademark law (protection of a mark’s senior user to enter a related field of commerce in the future; preventing a mark’s owner’s reputation from being tarnished through the association of the mark with inferior products; and preventing consumer confusion as to the source of goods or services) would be implicated by employees’ use of logos or other trademarks in their social media posts. Further, such use by employees would not constitute trademark infringement, i.e., “the unauthorized use of a trademark … in connection with the same or related goods or services and in a manner that is likely to cause confusion, deception, or mistake about the source of the goods or services.” As the GC explained, an employee’s online posting regarding wages, hours, and working conditions will not be misconstrued as an effort to sell a rival automotive product, whether or not the posting includes GM’s logo or trademarked images. There is, therefore, no genuine conflict between GM’s intellectual property rights and employees’ section 7 rights…”

To some extent, the NLRB’s position is consistent with the doctrine of “fair use” of copyrights and trademarks. Stated (overly) simply, fair use is an exception to the general rule that trademarks and copyrights cannot be used without the owner’s authorization. Fair use often occurs in the context of news reporting, commentary, and criticism. Where a trademark is used to describe the mark’s owner or that party’s product or service the use is generally considered fair where (1) the mark’s owner (or the product or service in question) is not readily identifiable without the use of the trademark; (2) only as much of the mark or marks as is reasonably necessary to identify the mark’s owner or good/product is used; and (3) the user doesn’t do anything to suggest sponsorship or endorsement by the trademark’s owner.

This general approach is reflected in the NLRB’s approval of rules such as:

• Respect all copyright and other intellectual property laws. For [the Employer’s] protection as well as your own, it is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks and other intellectual property, including [the Employer’s] own copyrights, trademarks and brands.

• Do respect the laws regarding copyrights, trademarks, rights of publicity and other third-party rights. To minimize the risk of a copyright violation, you should provide references to the source(s) of information you use and accurately cite copyrighted works you identify in your online communications. Do not infringe on [Employer] logos, brand names, taglines, slogans, or other trademarks.

On the other hand, the NLRB’s protection of employees’ use of employer’s intellectual property appears more expansive than that contemplated by the fair use doctrine. For example, some commentators have interpreted court decisions applying the doctrine to require users of the mark to include only factually accurate statement with their uses. But the Board has taken the position that the Act protects employees’ right to make false and even defamatory statements about their employers and working conditions. Likewise, there is no indication that the NLRB views employees’ use of employers’ trademarks to be fair only where the employees use no more of the mark than necessary to identify the employer; nor does the NLRB draw a related distinction (made by the courts) between use of a word mark and use of a logo.

Employers should exercise caution in any efforts to limit workers’ use of their copyrights and trademarks, lest they face claims of unfair labor practices.