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FDA Extends Enforcement of New Nutrition Facts Label Another 6 Months

Although January 1, 2020 was the deadline for many companies to implement the new Nutrition Facts label, the FDA states on its Industry Resources on the Changes to the Nutrition Facts Label web page that it will not take any enforcement actions for the first six months, or until after July 1, 2020.

The FDA initially set a general compliance date of July 2018. Manufacturers with annual food sales of less than $10 million were given an additional year to comply. In May 2018, the FDA extended those compliance dates “by approximately 1.5 years.”

The FDA has provided the following example illustrating what’s different about the new Nutrition Facts label:

Importantly, the new label requires:

  • Declarations for “added sugars” in grams and as a percentage of Daily Value (% DV);

U.S. Department of Labor Targets Forced Labor in Fashion Industry

The U.S. Department of Labor (“DOL”) has allocated $22 million to target the growing issue of abusive labor practices in the fashion industry, and specifically, to combat the use of child and forced labor in supply chains, especially in South America, Africa, and Southeast Asia.

Clothing production is booming. In fact, according to a report by sustainability consultant McKinsey & Company, clothing production doubled from 2000 to 2014.  The global market now produces more than 100 billion garments a year, according to a report by the Ellen MacArthur Foundation.  At the same time, driven by “fast fashion,” the amount of wear we get from clothes has dropped by 36 percent, with almost 65 percent of all garments ending up in a landfill or being incinerated.

With more clothing being produced, production supply chains have already become a concern, raising concerns for the potential of forced labor, human trafficking,

FCC Urged to Take Action on Litigation-Fueling Autodialer Issue Under TCPA

February 14, 2020

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Retailer groups, including the National Retail Foundation, the U.S. Chamber of Commerce, and the Restaurant Law Center, are part of a coalition urging the Federal Communications Commission to clarify what constitutes an automatic telephone dialing system under the Telephone Consumer Protection Act (TCPA) following a recent decision by the Eleventh Circuit that deepened the legal divide over the issue.

The TCPA prohibits “using any automatic telephone dialing system” to call a cellular telephone number, except for emergency purposes or with the prior express consent of the called party, or to collect a debt owed to the U.S. government.[1]

The statute defines an “automatic telephone dialing system” (or autodialer) as “equipment which has the capacity—(A) to store or produce telephone numbers to be called, using a random or sequential number generator; and (B) to dial such numbers.”[2]

Last month, the Eleventh Circuit narrowly interpreted the TCPA as

Pepper Purchasers Reach $2.5 Million Class Settlement Over Underfilled Containers

In a multidistrict litigation accusing McCormick & Co. of deceptively underfilling the pepper it sells in grinders and tins, a D.C. federal judge preliminarily approved a $2.5 million class settlement last week.

Consumers first sued McCormick in 2015, challenging the spice manufacturer’s response to economic pressures in the black pepper marketplace.  Facing rising wholesale prices and a decreased market share, McCormick reduced the weight of ground pepper in its tins and peppercorns in its pepper grinders by 25% and 19%, respectively, but did not reduce the container size or change the price.   Retailers sold the containers with reduced amounts between March 2015 and June 2016.  The plaintiffs’ original complaint alleged that McCormick and other brands it supplied misled consumers by constructing the packages to hide the reduction of product with “nonfunctional slack-fill,” or empty space.

Within months of the first case against McCormick, additional copycat consumer suits followed. In late

Survey of Privacy Practices: One Quarter of U.S. Retailers Block European Visitors

January 31, 2020

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Our Survey of the Retail Industry’s Privacy Practices discloses that 25 percent of U.S. retailers have decided to block European visitors from reaching their websites.

There are two situations in which the GDPR purports to apply extraterritorially to companies that have no contact to the European Union. The first situation, described in Article 3(2)(a) of the GDPR, occurs when a company that has no contacts with the European Union “offer[s] goods or services” to a person that is located in the European Union.  The second situation, described in Article 3(2)(b) of the GDPR, occurs when a company that has no contacts with the European Union “monitor[s]” the “behaviour” of someone “as far as their behaviour takes place within the Union.”[1]

While the GDPR implies that merely having an internet website that is accessible to European Union residents is not enough for the GDPR to attach, there is

Do Your New Year’s Resolutions Include Steps to Prevent Slavery and Human Trafficking?

January is National Slavery and Human Trafficking Prevention Month in the US (culminating in the annual observation of National Freedom Day on February 1, 2020) and this year is the 20th anniversary of the Trafficking Victims Protection Act (US) that established trafficking and related offenses as federal crimes.

Human trafficking and modern slavery are often hidden and pervasive crimes that know no boundaries and include forced and compulsory labour, debt bondage / bonded labour, human trafficking, child slavery, descent based slavery or forced / early marriage. As many as 40.3 million people – adults and children — are trapped in a form of modern slavery around the world, including in the United States.  However, in an inter-connected and transparent global business environment not only are these crimes increasingly visible but also the focus of targeted US domestic, US inter-agency and international governmental cooperation and business action.  It is clear that

Assessing Slavery and Human Trafficking Risks

The Modern Slavery Act (“MSA”) was introduced in the United Kingdom in October 2015 introducing criminal offences of slavery, servitude, forced or compulsory labour and human trafficking. However, its most profound impact has been to drive a change in global business behaviour by introducing, pursuant to s54, a disclosure and transparency reporting approach. This requires a commercial organisation supplying goods or services (carrying on a business, of part of a business, in the UK with a turnover of £36M) to produce an annual statement on steps taken to combat slavery and human trafficking not only to a business’ direct operations but also their supply chains.

Following the MSA a legislative trend utilising due diligence and disclosure obligations to further responsible business conduct has developed and been reinforced by developing case law and test cases seeking to hold businesses accountable for social/human rights related issues. The launch of global Principles in 2018 for governments to use as

Survey of Retail Industry’s Privacy Practices

December 30, 2019

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Survey of Retail Industry’s Privacy Practices

December 30, 2019

Authored by: BCLP and David Zetoony

There is no one strategy for disclosing privacy practices to consumers, or for complying with the federal and state laws (including the California Consumer Privacy Act, or CCPA) that govern data privacy.  The following summarizes current trends within the retail industry:

  • Privacy notices are, on average, 7.5 months old.
  • Retail industry privacy notices are significantly newer than the privacy notices of companies in other industries.
  • The majority of retailers have not updated their privacy notices for the CCPA.
  • Retailer privacy notices that reference enumerated categories tend to use lists instead of tables.
  • Retailers that discuss the sale of information are evenly split between selling and not selling data. The majority of retailer privacy notices, however, are silent or ambiguous about sale.
  • The majority of retailer privacy notices do not include a “Do Not Sell” option. Retailers are slightly more likely, however, than other companies to include a Do Not

Countdown to the CCPA: What is Legally Considered to be a Data Breach?

When the California Consumer Privacy Act (“CCPA”) takes effect in January 2020, California will become the first state to permit residents whose personal information is exposed in a data breach to seek statutory damages of between $100-$750 per incident, even in the absence of any actual harm.  The class actions that follow are not likely to be limited to California residents, but will also include non-California residents pursuing claims under common law theories.  A successful defense will depend on the ability of the breached business to establish that it implemented and maintained reasonable security procedures and practices appropriate to the nature of the personal information held.  The more prepared a business is to respond to a breach, the better prepared it will be to defend a breach lawsuit. To help our clients get ready for the CCPA, Bryan Cave Leighton Paisner is issuing a series of data security articles to

FTC Issues Guidance on Proper Disclosures for Social Media Influencers

November 6, 2019

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Many retailers and online businesses leverage social media to boost brand awareness and promote product sales. The FTC recently has issued guidance on what social media influencers need to do when endorsing products. The rules are common sense, but influencers may not adopt them completely, creating risk for themselves and potentially for businesses whose products they promote. Marketing teams responsible for sponsorships, partnerships and endorsements should review the FTC’s new guidance and ensure that their influencers are being clear and direct about sponsored product placements. While the FTC indicates that influencers have the obligation to ensure their promotions are truthful, plaintiffs, in the context of potential consumer class actions, may attempt to attribute risk back to your business.

FTC’s Disclosures 101 for Social Media Influencers is an easy read (published  November  5, 2019), and according to the FTC’s press release of the same date, it updates the

What Rules Will Govern Claims Relating to CBD in Food, Beverages and Supplements?

Within the last two months, three class action lawsuits have been filed in federal courts against companies that sell ingestible products containing cannabidiol (CBD), a chemical compound found in the cannabis plant, alleging that the products contain significantly less CBD than advertised.  Sellers of other food and supplement products facing this type of claim regarding their non-CBD products’ content have successfully argued that such claims are preempted by the federal Food, Drug and Cosmetic Act (FDCA) and its implementing regulations.  But the Food and Drug Administration (FDA) has not yet approved CBD as an ingestible ingredient, food or dietary supplement.  And while some states have followed the FDA’s lead, other states have legalized sales of ingestible, hemp-derived CBD products.  This can leave food, beverage, and supplement companies confused about what rules apply to CBD as an ingredient in ingestible products.

The first of the three class actions was filed on

Are Your Gift Cards Accessible? Lawsuits Assert Gift Cards Should Be Offered in Braille

In addition to concerns surrounding the accessibility of a business’ website, retailers now have a new concern – the accessibility of their gift cards. Plaintiffs have recently filed a number of lawsuits alleging that the failure to sell gift cards containing writing in Braille is a denial of full and equal access to blind and visually impaired individuals, and thus is a violation of Title III of the Americans with Disabilities Act (“ADA”).

On October 24, 2019, twelve lawsuits were filed in the United States District Court for the Southern District of New York against well-known retailers, restaurants, and other businesses. The complaints allege, in part, that because store gifts cards are generally the same size and texture as credit cards, they are indistinguishable by a blind person from credit cards and other gift cards.

To support this new theory of ADA liability, the complaints provide some background into the

Avoid a Catastrophic Loss From a Customer’s Bankruptcy — Five Tips

One day, you get a notice in the mail that an important customer has filed chapter 11. Your customer recently paid $250,000 on invoices that were delinquent for several months and still owes you $500,000. The customer, a brick-and-mortar store, sent form letters to its vendors expressing optimism that the chapter 11 process will allow the store to continue to operate while it locates a buyer which will continue to operate the store.

A few weeks later, no buyer has been located and the customer seems headed into a liquidation. Your inventory will probably be dumped on the market at bargain prices — potentially depressing the price of your product.  You may not see any of the proceeds of the liquidation, which will most likely go to pay the customer’s bank lenders. Lastly, you are losing a significant customer.

Not only are you looking at potentially writing off $500,000 in

California Chamber of Commerce Challenges Prop. 65 Warning for Acrylamide in Food and Beverage Products

October 18, 2019

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The California Chamber of Commerce has filed a lawsuit seeking to prevent the state from “enforcing a requirement to provide a false, misleading, and highly controversial cancer warning for food and beverage [] products that contain the chemical acrylamide.” Cal. Chamber of Commerce v. Becerra, No. 19-0962 (E.D. Cal., October 7, 2019).

The complaint argues that although “certain governmental and scientific entities” have identified acrylamide as a carcinogen in laboratory animals, “[s]cientific studies in humans, however, have found no reliable evidence that exposure to acrylamide in food products is associated with an increased risk of developing any type of cancer. In fact, epidemiologic evidence suggests that dietary acrylamide—i.e., acrylamide that forms naturally in normal cooking of many food products—does not cause cancer in humans or pose an increased risk of cancer in humans. Indeed, some food products that contain acrylamide (e.g., whole grains and coffee) have been shown to reduce the risk

The ABCs of AB-5: How California’s New Employee Classification Law May Impact Retailers

Following passage and signature into law of California Assembly Bill 5 (“AB-5”), retailers should be aware of how the new law affects whether they can classify workers as independent contractors.

AB-5 codifies a decision last year by the California Supreme Court in Dynamex Operations West, Inc. v. Superior Court of Los Angeles establishing the “ABC test” for determining whether workers can be classified as independent contractors for purposes of wage order claims, and extends the test beyond wage order claims to the California Labor Code, generally.  The new law takes effect January 1, 2020.

Although AB-5 is making headlines for its potential impact on the gig economy, the law may impact any business that uses independent contractors.  For retailers, this may include workers ranging from freelance artists to models.

Under AB-5 and the “ABC test,” a worker is considered an employee rather than an independent contractor unless the

CCPA Loyalty Club FAQ: Is a Retailer Required to Delete Information Concerning a Loyalty Member?

October 11, 2019

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Typically no.

Loyalty programs can be, and are, structured in a variety of different ways.  Some programs track dollars spent by a consumer, others track products purchased.  Some programs are free to participate in, others require consumers to purchase membership.  Some programs offer consumers additional products, other programs offer prizes, money, or third party products.  All loyalty programs share one thing in common however – they provide some form of reward to a consumer in recognition of (or in exchange for) their repeat purchasing patterns.

One of the rights conferred by the CCPA is the ability of a consumer to request that a business delete personal information “which the business has collected from the consumer.”  While numerous retailers have expressed confusion regarding whether that right requires the deletion of loyalty program related data, it is important to remember the right to deletion is not an absolute right and may rarely

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