Whole Foods in downtown Miami.

A Whole Foods Market Group policy that bars employees from recording is unlawful and could create a “chill” for workers to express their rights, a  federal appeals court ruled Thursday.

The U.S. Court of Appeals for the Second Circuit upheld a National Labor Relations Board decision that said instructions in the national grocer's handbook violated the National Labor Relations Act, which guarantees workers the right to engage in protected concerted activity, including the discussion of terms and condition of their employment.

The dispute began in 2013, when a branch of the United Food and Commercial Workers International Union challenged the grocer's anti-recording rules.

The Whole Foods policy forbid employees from taking audio or video recordings of “conversations, images, phone calls or company meetings” without prior approval because they “inhibit spontaneous and honest dialogue.”

In its decision, the Second Circuit said that despite Whole Foods' stated purpose of its policies “to promote employee communication in the workplace,” the overly broad language could “chill” an employee's exercise of their rights because, as written, these rules could limit activities in which employees are not acting in concert.

“As written, those policies prevent 'employees recording images of employee picketing, documenting unsafe workplace equipment or hazardous working conditions, documenting and publicizing discussions about terms and conditions of employment, or documenting inconsistent application of employer rules' without management approval,” the court said in its decision.

Whole Foods fought to overturn labor law sanctions and previously argued that overturning the policy would be harmful to the workplace. In its Second Circuit brief, Whole Foods, represented by Proskauer Rose, argued the policy was “rooted in Whole Foods' culture of transparency” and will allow employees to feel free to share comments without fear of being recorded.

The Austin, Texas-based grocer argued the board's decision “undermines the positive workplace relations that the policy fosters for Whole Foods' non-unionized employees.” The company noted that the labor board “has long made it unlawful for bargaining parties to insist on recording collective bargaining sessions and grievance meetings.”

A Whole Foods attorney did not immediately respond to a request for comment.

The court said not every “no-recording policy” will infringe on employees' rights and it should still be possible to craft a policy that places some limits on recording audio and video in the workplace. “Whole Foods' interests in maintaining such policies can be accommodated simply by their narrowing the policies' scope,” the appeals court wrote.