Hunton Retail Law Resource

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.

For many companies, including retailers, filing an inter partes review (“IPR”) is a highly popular avenue to challenge patent validity before the U.S. Patent Office and outside of federal district court. An IPR is often a faster and easier way to challenge a patent than in district court.

Retailers, beware! The new wave in the fight against “robocalls” is coming, and it’s targeting telemarketing text messages. In the past six months, we have seen an uptick in activity at both the state and federal level to rein in telemarketing text messages, and companies using any kind of text messaging telemarketing will want to proceed with caution.

Following the recent trend of retailers abandoning gendered store sections and product lines, California has passed legislation that will force certain large retailers to adopt non-gendered children’s sections in California store locations.

The Recall Roundup is a monthly survey of regulatory activity affecting the manufacture, distribution, and sale of consumer products. Subject matter may include the latest product recalls, federal agency major developments, and proposed or new federal rules. The blog’s goal is to provide an overview, rather than a comprehensive report on every development that could potentially affect businesses or consumers. Nothing herein constitutes legal advice. If you have questions or comments about the blog, please reach out to the authors.

Today, the FTC announced it had sent “Notices of Penalty Offense” to over 700 businesses, including top consumer products companies, large retailers, tech platforms, media and gaming companies, and ad agencies, warning them against engaging in deceptive and unfair practices when it comes to using endorsements and testimonials in ads.