Hunton Retail Law Resource

Despite the uncertainty of 2020, initial public offerings (IPOs) in the US set records in 2020, recording 407 IPOs that raised a total of $145 billion.  The 2020 IPO boom more than doubled the 195 IPOs recorded in 2019 that raised a total of $56 billion. Special purpose acquisition companies (SPACs), which made up 230 IPOs, influenced the bulk of the IPO activity in 2020.  Although most of the SPACs have not yet completed their mergers, the completed SPAC mergers in 2020 showed a 41 percent return.  Excluding SPACs, traditional IPOs raised $83 billion across 203 issuers, again representing the strongest IPO market in two decades.

While the eleven January recalls are summarized below, this first “Roundup” focuses on the evolving use of cashierless technology and what role it may play in the context of product recalls.  Broadly speaking, cashierless technology refers to using technology at brick-and-mortar business locations that allows shoppers to enter the location and purchase consumer products without standing in a checkout line or interacting with a cashier.  Rather, cameras and sensors track the products selected and charge the shoppers upon exit.

Disputes between restaurants and third-party food delivery services—such as Grubhub and Uber Eats—have made headlines over recent years. This tension has only been compounded by the COVID-19 pandemic. 2020 was a particularly tough year for restaurants across the country and even tougher in cities like New York where rents are high and state-mandated business closures resulted in significant cuts to already narrow profit margins. However, the same has not been true for third-party food delivery services. In 2020, food delivery apps saw substantial increases in revenues. Uber Eats, for example, reported revenues of $2.51 billion in 2019; that number jumped to approximately $3.5 billion for the first nine months of 2020.

For over 30 years, most district courts throughout the country have used a two-step conditional certification process to govern certification of collective actions under the Fair Labor Standards Act (FLSA).  But in its recent and game-changing opinion, Swales v. KLLM Transport Services, LLC, the Fifth Circuit rejected that two-step process and laid out a stricter framework for FLSA collective actions. This is an important decision for the retail industry, a frequent target of FLSA lawsuits, given the industry’s large workforce.  Retailers facing putative FLSA collective actions in the Fifth Circuit (Texas, Louisiana and Mississippi federal courts) will benefit from the increased early scrutiny of certification issues mandated by this decision, and retailers across the country should keep a close watch on whether the Fifth Circuit’s opinion is adopted by other federal courts.

This is an extraordinary and unprecedented time for the retail industry. Our 2020 Retail Industry Year in Review provides an in-depth analysis of the issues and challenges that retailers faced in the past year, and a look ahead at what they can expect in 2021.

Last week marked a double milestone for the FTC: Rebecca Slaughter assumed the role of Acting Chair, and the agency brought its first enforcement action under the Better Online Ticket Sales Act (“BOTS Act”), 15 U.S.C. § 45c(a)(1).

After a hiatus from civil penalties, the CPSC recently announced a $12 million penalty.  In November 2017, Walter Kidde Portable Equipment Inc. (“Kiddie”) recalled fire extinguishers for two issues.  First, the fire extinguishers could become clogged or require excessive force to discharge.  Second, the nozzle of the fire extinguishers could detach.  These issues could result in a failure of the fire extinguishers to discharge during a fire emergency.  In fact, a 2014 death was reported involving a car fire after emergency responders could not get the fire extinguishers to work.  By November 2017, Kiddie had received 391 reports of defects, including one fatality, 16 injuries, and 91 episodes of property damage.

A flurry of asbestos-related activity in the last weeks of 2020 will require the United States Environmental Protection Agency (EPA) to devote significant regulatory attention to asbestos in 2021.  The incoming Biden Administration will need to address these Toxic Substances Control Act (TSCA) developments, and the scope of that response will determine whether regulatory implications extend beyond asbestos to other chemical substances.

The FTC settled charges with mobile advertising company Tapjoy, Inc., on allegations that the company failed to provide promised rewards in exchange for completed activities such as the payment of money, disclosure of sometimes-sensitive personal information, or registration for “free trial” marketing offers. The FTC’s agreement, approved unanimously by the agency’s 5 Commissioners, requires Tapjoy to more conspicuously state the terms of their offers, more closely monitor consumer complaints, and more diligently track advertising partners who deliver (and fail to deliver) promised rewards.

Congress has passed a law mandating nationwide compliance with California’s flammability standard for upholstered furniture.  The “COVID-19 Regulatory Relief and Work from Home Safety Act,” included in the massive appropriations bill passed by Congress and signed into law by the President on December 27, 2020, incorporates the provisions previously proposed in the Safer Occupancy Furniture Flammability Act (SOFFA), a bill widely supported by the furniture industry.