Hunton Retail Law Resource

On August 6, 2020, President Trump signed executive orders imposing new economic sanctions under the International Emergency Economic Powers Act (50 U.S.C. § 1701 et seq.) and the National Emergencies Act (50 U.S.C. § 1601 et seq.) against TikTok, a video-sharing mobile application, and WeChat, a messaging, social media and mobile payments application. The orders potentially affect tens of millions of U.S. users of these applications and billions of users worldwide.

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Importers that have suffered “significant financial hardship” due to COVID-19 may qualify for a 90-day pay extension for certain tariffs. On April 19, 2020, following calls for trade liberalization to ease economic pressures, the Trump administration issued an executive order, along with a temporary final rule by the US Department of Homeland Security’s Customs and Border Protection (CBP), which postpones the time to deposit certain duties, taxes and fees. However, the 90-day pay extension is limited in scope and certain goods are not eligible for the extension.

September ushered in a shift in political power at the CPSC with the confirmation of a new commissioner. In June, the U.S. Senate confirmed President Trump’s nomination of Dana Baiocco—a Republican—to the CPSC. Commissioner Baiocco’s appointment created the potential for a 2-2 voting tie if issues presented to the CPSC give rise to voting along party lines. One CPSC vacancy remained for which President Trump nominated Peter Feldman—another Republican—in June to both complete the remainder of former Commissioner Joe Mohorovic’s term, which expires in October 2019, and to serve a full seven-year term starting in October 2019. 

A recent Supreme Court ruling regarding sales taxes and new tariffs on Chinese imports instituted by the Trump administration will impact many retailers, which could in turn have an effect on M&A activity in the retail industry.

It has been a quiet month in the world of recalls with only 13 product recalls issued in June. Still, other CPSC-related news is noteworthy.

Last month, the U.S. Senate confirmed President Trump’s appointment of Dana Baiocco to serve as a CPSC commissioner. If political ideology translates into voting trends on consumer safety issues—and it may not—Baiocco’s appointment creates a potential 2-2 voting “tie” at the CPSC, with two Republican and two Democratic commissioners. Now, Trump seeks to add a third Republican to the CPSC. On June 4, 2018, Trump nominated Peter Feldman to be a commissioner. Feldman is senior counsel to the U.S. Senate Committee on Commerce, Science and Transportation, and therefore advises on consumer protection, product safety, data and privacy issues. If confirmed, Feldman will complete the remainder of former Commissioner Joe Mohorovic’s term, which expires in October 2019. Feldman’s confirmation would mean that for the first time in nearly 12 years, Republican appointees would outnumber Democratic appointees at the CPSC. 

The CPSC experienced a political shake-up this month when the U.S. Senate confirmed Dana Baiocco as the newest commissioner. In September, President Trump nominated Baiocco, a Republican and former partner at Jones Day, but the Senate did not act on the nomination by the end of the 2017 calendar year. So President Trump resubmitted his nomination of Baiocco in January. On May 22, 2018, the Senate confirmed Baiocco by a vote of 50-45, mostly along party lines. Her seven-year term will run through October of 2024.

On April 26, 2018, the U.S. Senate confirmed by unanimous consent all five pending nominees to the Federal Trade Commission. Once installed, the agency will have a full complement of commissioners for the first time in nearly three years. The FTC will be comprised of three Republicans—Joseph Simons (Chairman), Noah Joshua Phillips and Christine Wilson—and two Democrats—Rebecca Kelly Slaughter and Rohit Chopra.

FTC Commissioners serve staggered seven-year terms. April 27, 2018, is Democrat Terrell McSweeny’s last day at the FTC, and Simons will take over her seat, which ...

Recently, President Trump announced that he sent names of four nominees to serve as commissioners on the five-member Federal Trade Commission (“FTC”) to the Senate for approval. If all four of the nominees are confirmed, it will still leave one remaining vacant seat on the FTC, which has been operating as a bipartisan two-member interim agency since early last year. The nominees, three of whom were announced last fall, consist of three Republicans—Joseph Simons, Noah Phillips and Christine Wilson—and one Democrat, Rohit Chopra.

With the arrival of 2018, President Trump resubmitted his nominations for CPSC leadership vacancies to the Senate. In 2017, Trump nominated Commissioner Ann Marie Buerkle to serve as CPSC Chair and Dana Baiocco to serve as a commissioner replacing Democrat Commissioner Marietta Robinson, whose term expired. But, under Senate rules, nominations not acted on are returned to the President. At the end of the Senate’s 2017 session, this meant that roughly 120 nominations were returned to Trump. Both nominees—Buerkle and Baiocco—are expected to receive Senate confirmation this year.

A reflection on 2017 reveals several highlights showing that the CPSC is in a transition phase.

The CPSC’s composition has changed and will continue to do so. At the beginning of 2017, the agency was led by three Democrats and two Republicans. In October, Republican Commissioner Joseph Mohorovic resigned his seat to return to the private sector. Thus, the CPSC now has four commissioners: three Democrats and one Republican. But the Democrats’ grip on the agency will soon slip. Indeed, after the election of President Trump, Republican Commissioner Ann Marie Buerkle became the CPSC chair. Further, President Trump has nominated a private-sector lawyer named Dana Baiocco to replace Commissioner Marietta Robinson, a Democrat whose term has expired. Further, an additional Republican nominee is expected to fill Mohorovic’s resignation. Thus, 2018 will likely see a Republican majority leading the CSPC for the first time in over a decade.

If 2017 is any indication, the new year will bring a fresh cascade of changes—both announced and unannounced, anticipated and unanticipated—in the business immigration landscape. Few, if any, of these changes are expected to be good news for U.S. businesses and the foreign workers they employ.

In 2017, while much of the news media focused on the Trump Administration’s draconian changes to practices and policies that affected the undocumented—including ending the DACA Dreamer program, shutting down Temporary Protected Status for citizens of countries ravished by war and natural disaster, and aggressively enforcing at the southern border and in “sensitive” locations such as churches, courthouses and homeless shelters—relatively less attention has been paid to the steady, incremental erosion of rights and options for legal immigrants, particularly those who are sponsored for work by U.S. employers, under the Administration’s April 2017 “Buy American/Hire American” executive order. There is no doubt that such restrictions to the legal immigration system will continue to cause business uncertainty and disruption in 2018. Here’s what to expect.

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

Hilton Reaches $700,000 Settlement with New York and Vermont Over Data Breaches

The Attorney Generals of New York and Vermont announced a $700,000 settlement with Hilton Domestic Operating Company, Inc., formerly Hilton Worldwide, Inc. (“Hilton”), over two data breaches in 2014 and 2015.

Hilton was notified in February 2015 that it had likely suffered a data breach in December of 2014. In July of 2015, Hilton was notified of a second data breach from the prior three months. Hilton did not provide notice of either data breach until November 24, 2015. New York law requires that businesses provide notice in the “most expedient time possible and without unreasonable delay.” Vermont requires that businesses provide notice of data breaches to the Vermont Attorney General within 14 days of discovery, and within 45 days of discovery to consumers.

Under the terms of the settlements, Hilton has agreed to pay New York $400,000 and Vermont $300,000 and to comply with certain behavior remedies related to their notification and security procedures.

Last month, the solar eclipse captivated the United States and many consumers flocked to purchase solar eclipse glasses to safely observe the astronomical phenomenon. We previously reported how NASA issued a safety alert advising consumers on the proper eye protection they should seek. Now, some consumers have filed a class action lawsuit against a major online retailer for allegedly selling “unfit, extremely dangerous, and/or defective” solar eclipse glasses. As a result, the consumers allege “varying degrees of eye injury ranging from temporary discomfort to permanent blindness.”

August was a busy month in the world of recalls. First, the end of August ushered in a hefty $5.7 million civil penalty against a major retailer in the United States. The retailer was allegedly selling and distributing recalled products and has agreed, in addition to the civil penalty, to maintain a compliance program and a system of internal controls and procedures. The CPSC voted 4 to 1 to accept the settlement, with Acting Chairman Buerkle voting to accept a lower civil penalty.

On August 2, 2017, the U.S. Senate confirmed one of President Trump’s two management-side appointees, Marvin Kaplan, to the National Labor Relations Board (“NLRB”) in a contentious vote along party lines. Kaplan was sworn in on August 10, 2017, for a term ending on August 27, 2020. 

At the end of May, President Trump unveiled his latest proposed budget blueprint for 2018. The proposed budget contains significant funding cuts for many government programs, including more than a 25 percent cut to the Supplemental Nutrition Assistance Program (“SNAP”), formerly known as the Food Stamp Program.

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

The NAD Refers Sports Drink Maker to FTC

The NAD has referred BA Sports Nutrition, the maker of BodyArmor sports drinks, to the FTC after the advertiser failed to alter certain comparative ads. The ad at issue implores customers to “Ditch artificial Sports Drink[s]: artificial flavors, artificial sweeteners, artificial colors” and depicts a bottle of a competing sports drink. The NAD found that the ad implied that the competing sports drink contained artificial flavors, sweeteners and colors when, in fact, many of the competitor’s sports drinks did not.

On March 6, 2017, an NLRB administrative law judge (“ALJ”) issued a ruling finding that a nonunion automotive manufacturing facility in Alabama violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) when it terminated three employees who walked off the job over a holiday-season scheduling dispute. The ALJ found that the employees were engaged in protected concerted activity despite the fact that they denied discussing the decision to leave work before their shifts had ended.

Many online retailers are exploring how to use drones to quickly deliver online orders to customers. In June 2016, the Federal Aviation Administration (“FAA”) issued a final rule permitting flights by commercial drones under certain conditions, including the drone and its cargo weigh less than 55 pounds and the drone stays within sight of the pilot. While the rule was a welcome step forward for the commercial drone industry, the operational restrictions prohibited drones to fly over any populated areas due to safety concerns, essentially forbidding commercial drones in most urban areas.

With a new administration in the White House comes new leadership at the Consumer Product Safety Commission (“CPSC”). The CPSC has five commissioners, all of which are Former President Obama appointees, though no more than three may share the same political party affiliation. Commissioner Elliot Kaye—a Democrat—served as the CPSC’s Chairman until this month, when Commissioner Ann Marie Buerkle—a Republican—was named Acting Chairman. Kaye will continue to serve as a commissioner and Buerkle will remain Acting Chairman until President Trump nominates and the Senate confirms a permanent replacement. Before joining the CPSC in 2013, Buerkle represented New York’s 25th Congressional District in the House of Representatives and served as the U.S. Representative to the 66th Session of the United Nations General Assembly.

Join us for a complimentary webinar on Tuesday, March 7, 2017, 1:00 p.m. – 2:00 p.m. EDT.

While proactive retail employers are responding to, and preparing for, union organizing efforts at their retail stores, many supply chain workforces remain vulnerable to targeted union campaigns. In this webinar, we will address the special circumstances and vulnerabilities of workforces at warehouses, distribution centers, transport and other supply chain operations. We will review some of the new dynamics in supply chain operations that attract union interest, and offer suggestions ...

On January 25, 2017, Victoria Lipnic was appointed acting chair of the Equal Employment Opportunity Commission (“EEOC”), and members of the legal community believe that her appointment could move the EEOC in a more management-friendly direction. Lipnic has served as a Commissioner of the EEOC since 2010, having been nominated by Barack Obama to two consecutive terms, the second of which is set to expire in 2020. Immediately prior to joining the EEOC, Lipnic was a management-side labor and employment attorney for an international law firm and also served as the U.S. Assistant Secretary of Labor for Employment Standards from 2002 until 2009 under President George W. Bush. In that position, she oversaw the Wage and Hour Division, the Office of Federal Contract Compliance Programs, the Office of Workers’ Compensation Programs and the Office of Labor Management Standards.

Recently, President-elect Donald Trump tapped Andrew Puzder as his pick for Secretary of Labor. Puzder—the CEO of Hardee’s and Carl’s Jr.—has been an outspoken critic of government regulations, including efforts to increase the minimum wage and recent changes to the white-collar overtime exemption. If the Senate confirms Puzder, he will oversee the agencies responsible for these policies and his confirmation could signal a slowdown of anti-business federal regulations from the Department of Labor under President Obama’s Secretary of Labor, Thomas Perez.

As with other areas of the law, the recent presidential election will present both challenges and opportunities for retailers concerned with financial and securities regulation. While President-elect Trump did not articulate his views on financial services regulation on the campaign trail in any detailed manner, he did suggest that the Dodd-Frank Act should be repealed as it has increased costs for businesses, impeded economic growth and severely reduced lending without any clear benefits to investors or consumers.

After a long and unconventional campaign, we finally know the election results: early next year, businessman Donald Trump will be sworn in as the 45th president of the United States, supported by a Republican Congress. What the election results mean for the nation’s retailers, however, remains an open question. Trump, as a candidate, staked out bold policy positions on issues with potentially significant effects on retailers. Both positive and negative developments on a wide range of issues are possible over the next four years. Once sworn in, Trump will have considerable latitude to implement his policies through executive branch agencies and their enforcement priorities. In other instances, however, he will require support from the 115th Congress, and in some instances his actions could be constrained by the effect of appointments and policy choices made by the Obama administration and the 114th Congress.