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U.S. COVID-19: California Governor Newsom Announces Guidelines for Some Non-Essential Retailers to Reopen

One day before allowing “low-risk” retailers to reopen on a limited basis, California Governor Gavin Newsom on Thursday announced guidelines for certain retailers, manufacturers and other businesses to reopen fully during Stage 2 of the state’s reopening plan.

Even prior to full implementation of these guidelines, retailers perceived as presenting a lower risk of spreading COVID-19 can reopen on a limited basis, such as by offering curbside pickup, as early as today.  As we previously reported, Newsom has stated that such retailers include shops that sell items such as clothing, books, music, toys, sporting goods, and flowers.

At the press conference on Thursday, it was recommended that retailers offering curbside pickup take precautions such as having employees wear masks and gloves, bringing merchandise to a designated pickup location at the entrance or curbside, and encouraging use of payment methods and devices that reduce contact between employees and customers.

Whether non-essential retailers can reopen will also depend on the county and city where they are located. Seven Bay Area shelter-in-place orders have been extended through May 31. Los Angeles County’s order is set to expire May 15. Governor Newsom has stated that local governments have a right to issue and enforce stricter orders than the state, where warranted.

Under the state’s reopening roadmap, prior to reopening, all businesses are expected to:

  • Perform a detailed risk assessment and implement a site-specific protection plan
  • Train employees on how to limit the spread of COVID-19, including how to screen

U.S. COVID-19: California Announces Phased-In Reopening, Starting With Curbside Pickup

California Gov. Gavin Newsom announced on Monday that certain low-risk retail businesses will be allowed to reopen on a limited basis if they meet state guidelines and conditions to be announced on Thursday, including by allowing curbside pickup as early as this Friday.

Newsom said shops that sell items such as clothing, books, music, toys and sporting goods, as well as florists, are as among those who will be allowed to reopen on a limited basis if they meet the state guidelines.  Associated manufacturers that support the retail industry would also be allowed to begin production.

Whether a particular retail location can reopen, and under what conditions, also depends on the county and city where it’s located.  Six Bay Area counties announced last week that their shutdown orders will continue through the end of May: These include Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, and the City of Berkeley.  Los Angeles’s county’s order is set to expire May 15, after which the county is expected to phase in reopenings.

Governor Newsom in his briefing acknowledged that counties and cities have the right to issue orders that may be stricter than the state’s order.  However, he said some counties will be allowed to move further into the reopening process depending on certain criteria, including the stability of Covid-19 hospitalizations and the state’s ability to conduct more testing and contact tracing.

The California Retailers Association’s COVID-19 web page links to a summary of county and city orders within

Bay Area Counties Require Essential Businesses to Establish and Post Social Distancing Protocols

Seven Bay Area counties renewed and modified their shelter-at-home orders yesterday, extending the shutdown period through May 3, and in all cases but one, requiring that all essential businesses that remain open establish and post social distancing protocols by April 2 at 11:59 p.m.: San Francisco, Marin, Contra Costa, Santa Clara, San Mateo, Alameda, and Santa Cruz.

Santa Cruz County also extended its order through May 3, but does not include the same provision requiring establishment and posting of social distancing protocols.

The orders specify that social distancing protocols must be substantially in this form, and be posted at or near the entrance of the business where it is easily viewable by the public and employees. A copy of the social distancing protocol must also be provided to each employee performing work at the business.

The social distancing protocol must explain how the business is achieving the following, as applicable:

  • Limiting the number of people who can enter into the facility at any one time to ensure that people in the facility can easily maintain a minimum six-foot distance from one another at all times, except as required to complete the Essential Business activity;
  • Where lines may form at a facility, marking six-foot increments at a minimum, establishing where individuals should stand to maintain adequate social distancing;
  • Providing hand sanitizer, soap and water, or effective disinfectant at or near the entrance of the facility and in other appropriate areas for

COVID-19: Considerations for Retailers on Employee Furloughs in U.S. and California

As an alternative to laying off employees, many retailers may be considering furloughs – unpaid leaves or drastic reductions in work hours or work schedules – that allow them to retain employees and possibly continue to provide certain benefits. Retailers should be aware that furloughs still likely trigger notice requirements under state WARN laws, and in California may be considered a termination of employment requiring payment of final wages.

This post provides an overview of furlough considerations with respect to unemployment benefits, WARN laws, possible termination implications, reduced hours or work share, use of vacation time, and benefits.

Unemployment Insurance

Furloughed employees, as well as many employees with reduced hours, are eligible for unemployment insurance benefits. In California, Governor Newsom’s Executive Order N-25-20 removes the waiting period to receive benefits. More information on filing for unemployment benefits is available here.

WARN Laws

The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers with at least 100 employees who lay off at least 50 employees to provide advance notice of the “employment loss.” However, furloughs of less than 6 months do not qualify as an employment loss under the federal law.  At least 20 states have WARN laws, and the laws vary from state to state.

California’s WARN law, which applies to employers with 75 or more employees who lay off at least 50 employees, applies to furloughs exceeding a “de minimis” amount of time. The California Court of Appeal has held that a four- or five-week furlough

CRA Advises California Distribution Centers Can Stay Open Under State Order

California Governor Newsom has clarified that distribution centers in California can remain open under his Safer At Home order, stating that “distribution centers are part of critical infrastructure for many industries,” according to the California Retailers Association.  CRA also reports that it has obtained oral confirmation from the governor’s office that online sales and shipping activities can continue under the order.

As we previously reported, Governor Newsom on Thursday issued a statewide order directing all individuals to stay at home “except as needed to maintain continuity of operations of the federal critical infrastructure sectors.” The order went into effect on Thursday, and is in place until further notice.

As to exempt business activities, the order and web page providing more information on the order both refer to the Guidance on the Essential Critical Infrastructure Workforce by the U.S. Dept. of Homeland Security’s Cyber Infrastructure (CISA), which lists 16 federal critical infrastructure sectors, including Food and Agriculture.

The Guidance lists as critical Food and Agriculture workers who support “food, feed, and beverage distribution, including warehouse workers, vendor managed inventory controllers and block chain managers” as well as employees who support “infrastructure necessary to agricultural production and distribution.”

Other exempt Food and Agriculture workers include:

  • Workers supporting groceries, pharmacies and other retail that sells food and beverage products
  • Restaurant carry-out and quick serve food operations – Carry-out and delivery food employees
  • Food manufacturer employees and their supplier employees

More than a dozen California counties and

COVID-19: California Issues Statewide Stay At Home Order; What It Means for Retailers

Following COVID-19 shelter-in-place orders by nearly a dozen different California counties, Governor Gavin Newsom on Thursday evening issued a statewide order directing all individuals in the state to stay home “except as needed to maintain continuity of operations of the federal critical infrastructure sectors.”

The web page providing more information on the order directs residents to stay at home “except for essential needs.”  As under county shelter-in-place orders, it advises that essential services will remain open such as:

  • Gas stations
  • Pharmacies
  • Food: Grocery stores, farmers markets, food banks, convenience stores, take-out and delivery restaurants
  • Banks
  • Laundromats/laundry services

The following are closed statewide:

  • Dine-in restaurants
  • Bars and nighclubs
  • Entertainment venues
  • Gyms and fitness studios
  • Public events and gatherings
  • Convention centers

Governor Newsom’s order expressly orders that Californian’s working in 16 federal critical infrastructure sectors may continue their work “because of the importance of these sectors to Californians’ health and well-being.”  Of particular relevance to retailers, one of the sectors listed is “Food and Agriculture.”

In order to help determine what businesses and workers qualify under this and other sectors, the federal government has provided a “Guidance on Essential Critical Infrastructure Workforce”  Under food and agriculture, the Guidance lists, among others:

  • Workers supporting groceries, pharmacies and other retail that sells food and beverage products
  • Restaurant carry-out and quick serve food operations – Carry-out and delivery food employees
  • Food manufacturer employees and their supplier employees …
  • Employees engaged in the manufacture

California Adopts New Prop. 65 Warning Regulations

California’s Office of Environmental Health Hazard Assessment (OEHHA) has adopted new Proposition 65 warning regulations.  The new regulations will take effect in two years, on August 30, 2018.  In the interim, businesses may choose to comply with either the current or new regulations.

Prop. 65 prohibits businesses from knowingly and intentionally exposing California consumers to a chemical known to the state of California to cause cancer or reproductive harm without first providing a “clear and reasonable warning.”  As we reported on a draft of the regulations in April 2016, the new regulations substantially change what constitutes a clear and reasonable warning.

Products with label warnings manufactured prior to the effective date of the new regulations would continue to receive protection from liability. Parties to existing settlement agreements or court-approved consent judgments also can continue to provide warnings that comply with those agreements or orders.

Regulations Seek to Reduce Burden on Retailers

The new regulations seek to put the primary responsibility for providing warnings on product manufacturers or suppliers, who must either label their products with any required warnings or provide notice and warning materials to retailers. The manufacturer or supplier must specifically identify the product requiring a warning, provide all necessary warning materials, receive written or electronic confirmation of receipt from the retailer’s authorized agent, and renew the notice every six months for the first year and annually thereafter.  The manufacturer or other supplier of a product must notify a retailer within 90 days if a new

Receipt With Credit Card Data Constitutes Sufficient Injury for Class Action to Proceed

A recent federal court ruling allows a class action lawsuit to proceed against luxury fashion retailer Jimmy Choo for violating the Fair and Accurate Credit Transactions Act of 2003 (FACTA).  This ruling, which will likely be appealed, has important implications for other consumer class action lawsuits against retailers.

Jimmy Choo was accused of violating FACTA by printing credit card expiration dates on customer receipts in Wood v. J Choo USA, Inc., S.D. Fla. Case No. 15-cv-81487.  Jimmy Choo argued that the plaintiff had no standing to sue because she was not damaged when the retailer printed her credit card expiration date on her receipt. The court disagreed, holding that the consumer was sufficiently damaged to maintain the action as soon as soon as the receipt was printed.

Companies facing lawsuits alleging FACTA violations should be aware that although the U.S. Supreme Court held in Spokeo Inc. v. Robins, 136 S. Ct. 1540 (2016), that a plaintiff must show that an injury was both “concrete and particularized” and cannot rely on a procedural violation to allege injury in fact, there are instances where an injury may exist solely by virtue of a breach of a statutory prohibition.

Judge Beth Bloom of the U.S. District Court for the Southern District of Florida said that in certain circumstances—such as in this case involving Jimmy Choo—“the violation of a procedural right granted by statute” is sufficient to constitute injury for purposes of standing.

FACTA prohibits businesses from printing more than the

Gender-Based Price Discrimination: California Seeks to Extend Law to Prohibit Discrimination in Pricing of Gender-Specific Goods

California is taking on gender price discrimination. California law already prevents businesses from gender-based price discrimination for services such as haircuts, alterations, and dry cleaning.   A recently proposed bill (Senate Bill 899, Hueso) would extend that law to “retailers” and prohibit price discrimination in the sale of “goods.”

SB 899 recently passed out of the Senate Judiciary Committee, where several positive amendments were made after comments from the California Retailers Association and others.  One significant change from the original proposed legislation is elimination of a requirement that retailers post the prices of all goods so that consumers could determine if “men’s” and “women’s” products were priced the same.  The bill also removed food products from its broad scope.

The bill as amended states: “No business establishment . . . may discriminate, with respect to the price charged for goods of a substantially similar or like kind, against a person because of the person’s gender.”  “Substantially similar” is defined as goods that do all of the following: “(A) Share the same brand; (B) Share the same functional components; and (C) Share 90 percent of the same materials or ingredients.”

The amended bill also permits price differences based “specifically on the labor, materials, tariffs, or other gender-neutral reasons for having increased cost for providing the goods.”  The bill contains a statutory penalty of $4,000 for violations and contains an attorneys’ fees provision.

While substantially improved since introduction, SB 899 remains problematic:  What goods are gender-specific?  Would a pink towel or scented

ADA Website Accessibility Cases Continue to Grow

An increasing number of retailers are facing lawsuits or threats of lawsuits regarding website accessibility under the Americans With Disabilities Act (“ADA”), despite the fact that the ADA and its implementing regulations do not expressly address website accessibility.

The Department of Justice first announced in 2010 that it would issue formal regulations regarding website accessibility, but they now are not expected until 2018. In the meantime, the number of cases against retailers and others continue to mount, and judges show no propensity to dismiss or stay the cases while the DOJ works on its regulations.  Last month, a federal magistrate judge in a website accessibility case against Harvard University and the Massachusetts Institute of Technology rejected arguments that the court should dismiss or stay those cases pending issuance of the DOJ regulations.

Further, for what is believed to be the first time in any court, a California judge recently granted summary judgment to a visually-impaired plaintiff who alleged that the website of luggage retailer Colorado Bag’n & Baggage was inaccessible in violation of the ADA. Judge Brian Foster awarded the plaintiff, Edward Davis, $4,000 in damages.  Davis is also entitled under the ADA to recovery of his attorneys’ fees.  Davis has filed at least nine lawsuits in San Bernardino County Superior Court and another two in federal court. Several have ended with settlements.  He is represented by Victoria Knowles of the Newport Trial Group.

Putative Class Action Lawsuit Filed against J. Brand Jeans over “Made in California, USA” Label

Plaintiffs in California continue to focus on labels. Recently, a putative class action lawsuit was filed against J Brand, Inc., the maker of designer J Brand jeans and other clothing. The complaint alleges that the label for J Brand jeans states they are “Made in California, USA,” but that more than 5% of the jeans consist of imported material. Specifically, the complaint alleges that the imported material used includes fabric, thread, buttons, subcomponents of the zipper assembly, and rivets.

The plaintiff’s claim against J Brand, Inc. is based on an alleged violation of California Business and Professions Code section 17533.7, which provides that it is unlawful to use “Made in U.S.A.,” or similar words if the product has been “entirely or substantially made, manufactured, or produced outside of the United States.”

There are two exceptions to the statute. First, a company may still use the “Made in U.S.A.” label if imported materials constitute 5% or less of the final wholesale value of the manufactured product. Second, a company may still use the “Made in U.S.A.” label if the manufacturer cannot produce or obtain the imported materials from a domestic source, and the imported materials constitute 10% or less of the final wholesale value of the manufactured product.

National retailers should be aware that the California standard for a “Made in U.S.A.” label differs slightly from the Federal Trade Commission (“FTC”) standard. The FTC requires that “all or virtually all” of a product with a “Made in U.S.A.” label be made

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