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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

Credit Card Data Breaches: Protecting Your Company from the Hidden Surprises

Debit and credit cards are now the primary form of retail payment. Many retailers may not realize, however, that by accepting credit cards, they expose themselves to the risk of a data security breach and significant potential costs and legal liabilities.

Retailers should consider the major sources of direct costs following a data breach. These costs always include the retaining of a PCI (payment card industry) certified forensic investigator as required by the PCI Council. Costs also typically include the retaining of a privileged forensic investigator (often by the retailer’s law firm or general counsel); the hiring of outside counsel; public relations and crisis management; and consumer notification including printing and mailing costs and protection services offered to consumers.

In addition to the direct costs following a data breach, retailers often face three forms of liability from third parties: payment card brand fees; regulatory costs arising from investigations from the FTC, SEC and State Attorneys General, for example; and class action exposure. Contrary to what many retailers believe, retailers are typically not shielded from liability by their card processor or device manufacturers in the event of a payment card data breach. The “fine print” in the contracts for these products or services usually includes a number of provisions that place the liability on the retailer.

Finally, retailers may want to evaluate whether a cyber-insurance policy is needed, and if the policy they are considering provides appropriate coverage, retention and limits in light of the costs detailed above.

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Vermont joins four states in requiring paid sick leave for employees

April 5, 2016

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Vermont has passed new legislation guaranteeing paid sick leave for employees. Vermont joined four other states that already mandate paid sick leave – California, Connecticut, Massachusetts, and Oregon.

The law goes into effect as of January 2017 for employers with more than five employees. Employers with five or fewer employees will have until January 2018 to comply. Initially, the law will require that employers guarantee certain full time employees at least three paid sick days each year. As of January 2019, however, all employers affected by the law must guarantee at least five sick days for certain full time employees.

The law provides that an employee shall accrue not less than one hour of earned sick time for every 52 hours worked. An employer may require a waiting period of up to one year before a newly hired employee may use the accrued sick time. An employee may use the earned sick time if the employee is ill or injured, for specified types of medical appointments, to care for ill or injured family members, to assist family members who are victims of domestic violence, sexual assault or stalking, or to care for family members whose school or other type of care is closed during the employee’s workday.

The new law does not apply to a number of classifications of employees, including individuals employed by the federal government, certain individuals employed by the state, and certain temporary or seasonal employees.

A link to the Vermont law as enacted can be found

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