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Arizona Employers Prepare to Implement New Paid Sick Time Law

May 22, 2017

Authors

Bryan Cave, Jay Zweig and Melissa Costello

Arizona Employers Prepare to Implement New Paid Sick Time Law

May 22, 2017

by: Bryan Cave, Jay Zweig and Melissa Costello

After surviving a legal challenge rejected by the Arizona Supreme Court, Arizona’s $10 minimum wage enacted under Proposition 206 is already in effect, and the sick leave portion of the law takes effect in July. For many companies, this will require new paid time off and sick leave policies, or at least revisions to their existing policies.

With enactment of Proposition 206, Arizona joins other states with sick leave laws, including Illinois, California, Oregon, Washington, Massachusetts, Vermont, and Washington, D.C. As previously reported by the Retail Law blog, the Illinois law took effect in January 2017.

The Arizona law generally applies to all Arizona employees; it makes no distinction between salaried, hourly, full-time, part-time, temporary or seasonal employees. All employees must accrue one hour of paid sick time for every 30 hours worked.

Paid sick leave can be used for medical care of a mental or physical illness, injury

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Avoid Potential Liability for Violating Laws Related to Email Marketing

May 19, 2017

Authors

Bryan Cave, Christopher Achatz and John Bush

Avoid Potential Liability for Violating Laws Related to Email Marketing

May 19, 2017

by: Bryan Cave, Christopher Achatz and John Bush

Email is an important marketing tool for retailers, who should be aware of federal and state laws regulating its commercial use. Since its enactment in 2003, the Controlling the Assault of Non-Solicited Pornography and Marketing (“CAN-SPAM”) Act has attempted to curb the number of unwanted emails and impose some rules on a largely unregulated frontier. When followed, CAN-SPAM Act’s restrictions give email recipients some control over their inboxes and also maintain fairness in how emails present themselves. Failure to follow the CAN-SPAM Act can lead to penalties of up to

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FDA’s Delay in Implementing Calorie Labeling Law Leaves Fate Uncertain

May 12, 2017

Authors

Bryan Cave and Merrit Jones

FDA’s Delay in Implementing Calorie Labeling Law Leaves Fate Uncertain

May 12, 2017

by: Bryan Cave and Merrit Jones

The latest delay by the Food and Drug Administration (FDA) in implementing new calorie labeling rules gives restaurants and food retailers a little breathing room. Originally set for May 5, the agency pushed back the deadline a second time, now requiring compliance by May 2018.

Seven years ago, the menu labeling law was passed as Section 4205 of the Affordable Care Act (ACA), and the FDA has been working on the details ever since.  Its final rule requiring calorie labeling requires restaurants and “similar retail food establishments” (such as convenience stores, grocery stores, concession stands, and food takeout or delivery establishments) that are part of a chain of 20 or more locations and that sell substantially the same menu items to, among other things, post the following on menus and menu boards:

  • calorie information;
  • a succinct statement on suggested daily caloric intake; and
  • a statement that written nutrition
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Ninth Circuit Revives Baby Food False Advertising Class Action

May 1, 2017

Authors

Bryan Cave and Merrit Jones

Ninth Circuit Revives Baby Food False Advertising Class Action

May 1, 2017

by: Bryan Cave and Merrit Jones

The Ninth Circuit has revived a proposed class action against Gerber, saying the mother who sued it for labeling its sugar-laden baby food as “natural” only had to prove the labels were misleading, not necessarily false. “Even technically correct labels can be misleading,” the panel wrote in an unpublished order reversing the district court’s dismissal of the putative class action.

In Bruton v. Gerber Food Products Co., Case No. 5:12-cv-02412-LHK, the plaintiff alleged that labels on certain Gerber baby food products included claims about nutrient and sugar content that were impermissible under Food and Drug Administration regulations incorporated into California law. She challenged the labels that describe the food as “excellent source,” “good source,” “as healthy as fresh,” “no added sugar” and “natural.” The products include a variety of snack foods that allegedly mislead consumers about being good sources of vitamins C and E, iron and zinc, and support “healthy

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Businesses Beat Lawsuits Alleging Website Terms Violate New Jersey Law

April 24, 2017

Authors

Bryan Cave, Maria Vathis, Patrick McKey and Carol Osborne

Businesses Beat Lawsuits Alleging Website Terms Violate New Jersey Law

April 24, 2017

by: Bryan Cave, Maria Vathis, Patrick McKey and Carol Osborne

Every retailer that does business in New Jersey needs to know about New Jersey’s Truth in Consumer Contract, Warranty and Notice Act (“TCCWNA”), which was passed in 1981 to protect the rights of consumers from allegedly deceptive practices in consumer contracts, warranties, notices and signs. Recently, however, the TCCWNA has been the basis of a flurry of pre-suit demand letters to retailers and class action lawsuits filed in state and federal courts in New Jersey.

The TCCWNA’s prohibition of the use of certain terms or disclaimers in warranties, consumer contracts, and other consumer-facing  materials  has been interpreted to include language typically used by retailers in their websites’ terms and conditions, rules of use, on social media, and in contracts – such as commonly used provisions seeking to hold the retailer harmless/limit liability, requiring the customer to assume risks, provisions waiving certain fees and costs, and cost-shifting language.  A general

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Think Your Market Is Global? Then Global Consumer Regulators Likely Are Watching Your Business

April 14, 2017

Authors

Bryan Cave and Doug Thompson

Think Your Market Is Global? Then Global Consumer Regulators Likely Are Watching Your Business

April 14, 2017

by: Bryan Cave and Doug Thompson

 

Advances in internet technologies, global social media platforms, and inventory order management and shipping delivery systems have revolutionized our businesses. Shopping-at-home and catalog sales, markets most retailers never would have considered as recently as 20 years ago, are now vibrant. Your business now may have customers in many different countries. You should be aware of the growing collaboration among the consumer watchdogs across the world, because those regulators may well be aware of your business through consumer complaints.

econsumer.gov is a site sponsored by the International Consumer Protection and Enforcement Network (ICPEN) and supported by the U.S. Federal Trade Commission (FTC) as well as approximately 35 other countries’ consumer regulators. The site provides consumer education and publishes trends regarding consumer fraud complaints. As the tag line of the site reveals, it also is a portal for the collection of global consumer fraud complaints: “Report international scams

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Beware of Making Unsubstantiated Anti-Aging Claims

April 7, 2017

Authors

Bryan Cave, David Zetoony and Mary Longenbaker

Beware of Making Unsubstantiated Anti-Aging Claims

April 7, 2017

by: Bryan Cave, David Zetoony and Mary Longenbaker

Manufacturers, distributors, and retailers often tout the anti-aging effects of certain cosmetics and nutritional supplements. Of course, the term “anti-aging” is not intended to literally mean that a product prevents aging. To the contrary, it is understood by both the industry and consumers as describing a product that is designed to mitigate, mask, or soften certain cosmetic indicators that come with age. These typically include wrinkles, discoloration, greying of the hair, or a loss of skin firmness.

Anti-aging litigation has proven popular with the plaintiffs’ bar. In the past five years, there have been at least 31 class action complaints filed alleging deceptive advertising of anti-aging products, and at least 10 enforcement actions brought by the Federal Trade Commission (FTC).

Often such putative class actions allege that advertising which touts a product’s anti-aging properties is deceptive and misleading to consumers. Typically, complaints over anti-aging claims lack affirmative evidence that a

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Taking the Stress Out of Distress for Retailers

March 31, 2017

Authors

Bryan Cave and Andrew Schoulder

Taking the Stress Out of Distress for Retailers

March 31, 2017

by: Bryan Cave and Andrew Schoulder

Despite the downturn in many retail sectors, retailers should not automatically adopt a “glass half empty approach” but instead view the impending cycle as creating opportunities for companies in both the U.S. and globally.

In recent months, a steady stream of analyst coverage has painted a bleak outlook for the retail industry. Between February and March 2017, BCBG Max Azria, Eastern Outfitters, hhgregg, Gander Mountain, and Gordmans were among the companies added to the long list of retailers to seek bankruptcy protection. In February 2017, Moody’s Investors Service reported that the number of distressed U.S. retailers has tripled since the 2008-2009 recession. With 19 companies currently in Moody’s Caa/Ca retail portfolio, industry analysts are forecasting this current distressed cycle will surpass the conditions that existed for the industry in 2008-2009. The continued growth of online retailers is expected to hasten that result.

For companies with healthier balance sheets, the current

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Court Dismisses Website Accessibility Case as Violating Due Process, Since DOJ Still Has Not Issued Regulations

March 30, 2017

Authors

Bryan Cave and Merrit Jones

Court Dismisses Website Accessibility Case as Violating Due Process, Since DOJ Still Has Not Issued Regulations

March 30, 2017

by: Bryan Cave and Merrit Jones

Recent court decisions from California and Florida may provide ammunition to retailers battling claims that their websites and mobile applications are inaccessible in violation of Title III of the Americans With Disabilities Act (the “ADA”). As we reported in a previous blog post, retailers and other businesses have faced a wave of such demand letters and lawsuits.  Most of these claims settled quickly and confidentially.

However, a California district court recently granted Dominos Pizza’s motion to dismiss under the primary jurisdiction doctrine, which allows courts to stay or dismiss lawsuits pending the resolution of an issue by a government agency. In Robles v. Dominos Pizza LLC, U.S. Dist. Ct. North Dist. Cal. Case No. CV 16-06599 SJO, the court held it would violate Domino’s due process rights to hold that its website violates the ADA, because the Department of Justice still has not promulgated regulations defining website accessibility –

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Give Me … “Separability!” Supreme Court Holds Cheerleading Uniform Designs Copyrightable

March 24, 2017

Authors

Bryan Cave, Matt Minder and Ben Sidbury

Give Me … “Separability!” Supreme Court Holds Cheerleading Uniform Designs Copyrightable

March 24, 2017

by: Bryan Cave, Matt Minder and Ben Sidbury

In an important copyright case for retailers, the Supreme Court, in Star Athletica, L.L.C. v. Varsity Brands, Inc., 580 U.S. (2017), resolved “widespread disagreement” among the circuits, and adopted a single test to determine the copyrightability of designs incorporated in “useful articles.” The Court held that “an artistic feature of the design of a useful article is eligible for copyright protection if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article and (2) would qualify as a protectable pictorial, graphic, or sculptural work either on its own or in some other medium if imagined separately from the useful article.” Applying that test to Varsity Brands’ cheerleading uniforms, the Court concluded that the “arrangement of colors, shapes, stripes, and chevrons on the surface of the cheerleading uniforms” are separable from the uniforms and eligible for copyright protection.

In Star Athletica,

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“Made in USA” Claims Can Be Considered Deceptive Unless Substantiated

March 16, 2017

Authors

Bryan Cave, Mary Longenbaker, David Zetoony and Merrit Jones

“Made in USA” Claims Can Be Considered Deceptive Unless Substantiated

March 16, 2017

by: Bryan Cave, Mary Longenbaker, David Zetoony and Merrit Jones

Although every product (unless excepted) that is imported into the United States must be marked with its country of origin pursuant to Section 304 of the Tariff Act of 1930, most products manufactured domestically are not required to list the United States as the country of origin. However, if manufacturers or retailers do choose to market their products as “Made in the USA,” these claims must be substantiated, or risk being considered deceptive under federal or state law.

On the federal level, the Federal Trade Commission has issued guidelines and considers representations that a product is “Made in the USA” to be deceptive, unless (1) “all or virtually all” of a product’s components are of U.S. origin, and (2) “all or virtually all” processing takes place in the United States.  Furthermore, the FTC considers phrases such as “Produced in the USA,” “Built in the USA,” or “Manufactured in

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Mitigate Consumer Litigation Risk by Watching the FTC: Five Good Reasons

March 8, 2017

Authors

Bryan Cave and Doug Thompson

Mitigate Consumer Litigation Risk by Watching the FTC: Five Good Reasons

March 8, 2017

by: Bryan Cave and Doug Thompson

2017 already has been, and surely will continue to be, a year of great change. Regulatory agencies are re-envisioning their mandates. Many have or soon will have new leadership. And advocacy groups for consumers are mobilized.

Some of the regulatory changes may favor retail businesses. But others may continue to bring increased scrutiny and require more transparency with consumers. What can retail businesses do to help mitigate their risk and understand the headwinds they may be facing?  One thing that may be helpful would be to monitor the Federal Trade Commission (FTC)’s website. Why? Five good reasons.

  • Consumers are going to the FTC website. You should know what your customers are learning.
  • The Consumer Information section of the site offers a breadth of information, including tabs for Money & Credit, Homes & Mortgages, Health & Fitness, Jobs & Making Money, and Privacy, Identity & Online Security. In addition,

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    Monitoring Employees’ Email and Internet Use Raises Legal Considerations

    March 3, 2017

    Authors

    Bryan Cave and David Zetoony

    Monitoring Employees’ Email and Internet Use Raises Legal Considerations

    March 3, 2017

    by: Bryan Cave and David Zetoony

    Retailers should be aware that federal laws prohibit the interception of another’s electronic communications, but these same laws have multiple exceptions that generally allow employers to monitor employees’ email and internet use on employer-owned equipment or networks.

    As a result, under federal law, when retail employees use an organization’s telephone or computer system, monitoring their communications is broadly permissible, though there may be exceptions once the personal nature of a communication is determined. For example, under the National Labor Relations Act, employers cannot electronically spy on certain types of concerted activity by employees about the terms and conditions of employment.

    Although monitoring is broadly permitted under federal law, some states, including Connecticut and Delaware, require that employers notify employees that they may be monitored. Even in states that do not require notice, employers often choose to provide notice since employees who know they are being monitored are less likely to

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    How to Avoid ADA Claims as Service Animals Increase in Popularity

    February 24, 2017

    Authors

    Bryan Cave and Merrit Jones

    How to Avoid ADA Claims as Service Animals Increase in Popularity

    February 24, 2017

    by: Bryan Cave and Merrit Jones

    As retailers see an increasing number of customers seeking to bring animals into their stores, they should ensure that they have well-defined policies and train their employees concerning compliance with the ADA’s provisions regarding service animals. This is the third in a three-part series addressing ADA compliance. In earlier posts we addressed how to improve accessibility and reduce potential liability for premises barriers and website accessibility.

    Title III of the ADA prohibits discrimination against individuals “on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages or accommodations of any place of public accommodation,” which includes retail stores.

    Under regulations issued by the Department of Justice, service animals are dogs (or miniature horses, since some people are allergic to dogs) that are individually trained to do work or perform tasks for people with disabilities. Some state laws define service animals

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    Woman Claims Her Picture is Worth $2 Billion in Right of Publicity Suit

    February 3, 2017

    Authors

    Bryan Cave, Leila Knox and Nick Williamson

    Woman Claims Her Picture is Worth $2 Billion in Right of Publicity Suit

    February 3, 2017

    by: Bryan Cave, Leila Knox and Nick Williamson

    Could a promotional photograph of a restaurant scene that includes a customer with her hand partially obscuring her face be worth more than $2 billion?  That’s what a lawsuit brought by the customer claims.

    In an action pending in the U.S. District Court for the District of Colorado, plaintiff Leah Caldwell of Sacramento, California, who is representing herself, claims the restaurant chain Chipotle used the “iconic” image of her for advertising between 2006 and 2015.  The lawsuit includes a claim for right of publicity under California’s misappropriation statute, stemming from Ms. Caldwell’s allegation that she is “readily identifiable and depicted in the photograph as a woman of color wearing a white, long-sleeved shirt, hair up, and large eyes looking directly at the camera.”  Ms. Caldwell says that she was approached by the photographer on the day of the photo shoot, which took place at a Chipotle restaurant in Denver, Colorado,

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    Disclose and Follow Standards for Collection and Sharing of Customers’ Online Behavioral Data

    January 31, 2017

    Authors

    Bryan Cave and David Zetoony

    Disclose and Follow Standards for Collection and Sharing of Customers’ Online Behavioral Data

    January 31, 2017

    by: Bryan Cave and David Zetoony

    Many retailers engage in behavioral advertising, which refers to the use of information to predict the types of products or services of greatest interest to a particular consumer. Online behavioral advertising takes two forms. “First party” behavioral advertising refers to situations in which a website uses information that it obtains when interacting with a visitor. “Third party” behavioral advertising refers to situations in which a company permits others to place tracking cookies on the computers of people who visit the site, so that those individuals can be monitored across a behavioral advertising network.

    Two self-regulatory associations – the Network Advertising Initiative (“NAI”) and the Digital Advertising Alliance (“DAA”) – have created standards for companies engaged in third-party online behavioral advertising.  They recommend clear, meaningful and prominent disclosure on a retailer’s website that describes its data collection, transfer and use practices.  With respect to third-party behavioral advertising, they recommend

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