Hunton Retail Law Resource

Recently, Hunton Andrews Kurth launched a new blog, C-Suite Compensation Center. The blog will discuss compensation issues that are increasingly complex due to evolving laws, changing administrative rules and increasing shareholder activity.

The members of our Compensation practice group are multi-disciplinary within the various substantive areas of compensation. As multi-disciplinary practitioners, we take a holistic and full-service approach to compensation matters that considers all substantive areas of compensation.

Read the latest blog posts.

July served as another quiet month in the world of recalls. With only 11 recalls issued, July has had the fewest recalls for any month in over a year.

The CPSC made an important announcement this month regarding cedar chests. A company designed cedar chests with lids that automatically lock when closed. The company stopped making the cedar chests in 1987. From 1977 to 2015, 14 children have suffocated to death after climbing into the cedar chests and becoming locked inside. During this time, the company recalled 12 million cedar chests and offered a replacement latch to remedy the defect. Still, the CPSC predicts that millions of these cedar chests remain unfixed in consumers’ homes, posing a continuing danger to children. The CPSC’s announcement served as a plea urging consumers to immediately replace or remove the dangerous latches.

This past week, several consumer actions made headlines that affect the retail industry.

FTC Used Car Lot Sweep Finds 70 Percent Compliance with New “Buyers Guide”

Last month, the FTC announced the results of its compliance sweep of 94 car dealerships in 20 cities across the country, conducted after the FTC’s amended Used Car Rule (the “Rule”) took effect earlier this year. The revised Rule requires dealers to display a revised “Buyers Guide” containing warranty and other important information—such as a new description of an “As Is” sale—on the window of each used car offered for sale. According to the FTC, 70 percent of the 2,300 vehicles inspected displayed a buyer’s guide; over half of those with the guide displayed the updated version. As a follow-up, the FTC sent letters to each dealership inspected, detailing their findings and providing businesses with guidance material to help aid in compliance.

As detailed in our recent client alert, the Securities and Exchange Commission (“SEC”) recently proposed or adopted several rules of interest to retailers, particularly those that are publicly traded. They concern (1) final rules modernizing the definition of “smaller reporting company” (“SRC”), (2) final rules implementing the use of Inline eXtensible Business Reporting Language (“XBRL”) and (3) proposed rules amending the SEC’s whistleblower program.

What is California’s Proposition 65?

California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (“Prop 65”) is one of the most onerous chemical right-to-know statutes in the nation. It prohibits businesses with 10 or more employees, including businesses that merely ship products into California, from exposing people in California to listed chemicals without providing a “clear and reasonable” warning.

Why Should I Care?

Bringing a Prop 65 action is relatively easy and lucrative for private plaintiffs and their counsel. In 2017, there were nearly 700 cases settled with defendants paying more than $25,000,000 in plaintiffs’ attorneys fees and penalties. This does not include defense counsel fees, business interruption and other costs to comply.

As posted on the Hunton Employment & Labor Perspectives blog, many in the labor community are familiar with the Machinists Union’s (“Union”) long running effort to unionize Boeing’s South Carolina-based 787 Dreamliner manufacturing facility. After failing in two previous attempts to organize the entire facility, the Union recently won a bid to organize a “micro-unit” limited to a group of flight line technicians and inspectors. The Regional Director’s decision to approve the Union’s proposed bargaining unit took most labor practitioners by surprise, given the NLRB’s recent decision in PCC Structurals overturning the controversial Specialty Healthcare standard that facilitated the formation of micro-units. In PCC Structurals, the NLRB rejected the Specialty Healthcare test and reaffirmed that in reviewing representation petitions, the NLRB cannot limit its analysis to the interests of employees in the proposed bargaining group and instead must make a “meaningful” evaluation of the interests of those excluded from the group.

On July 3, 2018, Governor David Ige of Hawaii signed SB 2571 into law, banning the sale or distribution of any “SPF sunscreen protection personal care product” that contains chemicals oxybenzone or octinoxate without a prescription issued by a licensed healthcare provider. “SPF sunscreen protection personal care product” is broadly defined to include, without limitation, any lotion, paste, balm, ointment, cream, solid stick applicator, brush applicator, roll-on applicator, aerosol spray, non-aerosol spray pump, and automated and manual mist spray. The ban, which Governor Ige indicated is intended to protect marine ecosystems including coral reefs, will go into effect on January 1, 2021. Estimates indicate that at least 70 percent of sunscreen products contain oxybenzone or octinoxate.

As website accessibility lawsuits continue to surge, places of public accommodation oftentimes battle multiple lawsuits filed by different plaintiffs represented by different attorneys. Even after entering into private settlements, which include detailed website remediation plans, defendants may continue to be the target of these lawsuits by copycat plaintiffs. The Eleventh Circuit recently addressed this dynamic head-on, and held that a private settlement entered into by Hooters and a first-filed plaintiff did not moot a nearly identical, later-filed website accessibility lawsuit by a different plaintiff. This case underscores the importance of quickly remediating website accessibility issues, as well as taking care to draft settlement agreements to maximize arguments that future lawsuits are barred.

As reported on Hunton’s Privacy and Information Security Law blog, on June 28, 2018, the Governor of California signed AB 375, the California Consumer Privacy Act of 2018 (the “Act”). The Act introduces key privacy requirements for businesses, and was passed quickly by California lawmakers in an effort to remove a ballot initiative of the same name from the November 6, 2018, statewide ballot. We previously reported on the relevant ballot initiative. The Act will take effect January 1, 2020.

This past week, several consumer actions made headlines that affect the retail industry.

District Judge Boots Putative Class Action Against L.L. Bean

A federal district judge has dismissed an attempted class action against L.L. Bean involving the company’s long-standing no-questions-asked warranty policy. In February 2018, L.L. Bean announced that it was changing its policy to limit customers’ return period to one year, while committing to “work with our customers to reach a fair solution” if a problem arises more than a year after purchase. The plaintiff alleged that changing the warranty violated both the Magnusson-Moss Act and Illinois state law as an anticipatory repudiation of the guarantee. But the District Judge ruled that plaintiff neither alleged an injury nor had he stated a claim for which relief could be granted.