Hunton Retail Law Resource

California’s tough plastic-labeling enforcement is about to get a little stricter.

One of the biggest recent trends in retail may be slowing down.

In the retail industry, staff shortages caused by COVID-19 exposure and positive cases can significantly disrupt business operations, particularly during this time of unprecedented turnover and resignations in the retail labor market.  During this latest surge in COVID-19 cases, retail employers should be aware of recent changes in federal, state, and local guidance related to COVID-19 isolation and quarantine requirements.  On December 27, 2021, the Center for Disease Control and Prevention (CDC) updated their isolation and quarantine recommendations for the general public, including more limited time periods for quarantine and isolation periods.  On December 30, 2021, the California Department of Public Health (CDPH) released updated guidance to conform to the new CDC guidelines but added additional requirements, including testing to exit isolation or quarantine after the fifth day (which the CDC now acknowledges is the “best approach” but does not require as part of its formal guidance).  Notably, the new guidance also introduces a distinction between boosted and non-boosted individuals for the first time.  The key requirements and takeaways from this new guidance are detailed below.

Global design patent strategies are increasingly being relied upon by retail and consumer products companies as a cost-effective way to protect key product lines.  However, it is important to understand the various nuances of global design patent strategies since there are traps for the unwary, most notably in Australia and China.

In a major win for retailers operating in the commonwealth of Massachusetts, the Massachusetts highest court determined, among other things, that the so-called ABC independent contractor test is not the correct metric to determine join employer status. All retailers using subcontractors to support various parts of their businesses should breathe a sigh of relief, although such retailers should immediately evaluate the way that they operate with their subcontractors and the contractual agreements in place to reduce the likelihood of a finding of joint employer liability now that the proper standard has been articulated relating to the Massachusetts wage act.

With the busy holiday shopping season underway, retailers should remain vigilant in their efforts to protect consumers and themselves from the risks of selling potentially unsafe, ineffective or misbranded products in violation of the U.S. Environmental Protection Agency (EPA’s) federal pesticide law, the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA).  As concerns with the spread of COVID-19 and new variants increase over the winter months, consumers are likely to stock up disinfectant products and devices like air purifiers and air filters marketed to reduce the transmission of COVID-19 and other microorganisms.  These products are tightly regulated under FIFRA, and retailers can unwittingly become entangled in regulatory enforcement actions for selling and distributing products that do not comply with EPA’s regulations.  FIFRA extends legal liability not only to the makers of violative products, but also retailers who sell them to consumers, whether or not the retailer was necessarily aware of the violation. In addition to EPA, state agencies also enforce state regulatory requirements applicable to these products.

The National Advertising Division (NAD) of BBB National Programs recently examined advertising claims by Straight Smile, LLC (Byte), seller of direct-to-consumer teeth aligners, recommending that Byte provide clear disclosures when reviewers of its product receive incentives in exchange for posting reviews.

A series of recent regulatory actions at the Securities and Exchange Commission (SEC) reaffirms the agency’s commitment to ESG (environmental-social-governance) issues under new Chair Gary Gensler. These actions, which affect shareholder proposals, contested director elections, and proxy advisory firms, will each impact publicly-traded retailers.

A group of Democratic representatives led by Rep. Jan Schakowsky (D-IL) have introduced a “Safer Beauty” bill package that would ban certain chemicals in cosmetics and require more ingredient transparency in the supply chain.  The Safer Beauty bill package is comprised of four separate bills targeting certain “chemicals of concern” commonly used in cosmetics—including PFAS, phthalates, and formaldehyde.

Events such as the COVID-19 pandemic, extreme weather events and labor shortages have created significant supply chain challenges for retailers. In addition, the demand for more productive internet sales fulfillment centers has dramatically increased and will continue to increase for the foreseeable future. Many retailers were already in the process of converting to automation systems for supply chain facilities and internet fulfillment centers as a means to increase efficiency, productivity and revenue on a per square foot basis of logistics space, and the recent supply chain challenges have accelerated that process for many retailers. Automation includes equipment installations, automated vehicles, robotics and software products, and is designed to increase efficiency and productivity, reduce labor needs and operating expenses, and improve work place safety. Of course, there are many factors to consider for retailers converting to automated systems, including many real estate related considerations. This blog post focuses primarily on leasing issues, but retailers should also consider alternatives such as using or purchasing owned land or contracting with a 3PL service provider.