Hunton Retail Law Resource

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

FTC Issues Business Guidance under Consumer Review Fairness Act

On February 21, 2017, the FTC issued guidance to help businesses comply with the Consumer Review Fairness Act. Signed into law in December 2016, the Act is aimed at protecting consumers’ right to share honest opinions about a product or service in any forum. The FTC's guidance stresses that it’s illegal for companies to include standardized provisions that threaten or penalize people for posting honest reviews, while protecting companies’ rights to prohibit or remove reviews that contain confidential or private information, are libelous, abusive, vulgar or inappropriate, are irrelevant or are clearly false or misleading.

TCCWNA case law has continued to develop with no end in sight. Recently, courts have grappled with definitional questions that could impact the scope of the law and affect sellers of consumer goods and services.

Last year, we reported on Hunton’s Employment & Labor Law Perspectives blog that a confederation of trade associations filed an amicus brief supporting Volkswagen Group’s challenge to a National Labor Relations Board (“NLRB”) Regional Director’s decision allowing a union election in a “micro-unit” of maintenance workers at the company’s Chattanooga, Tennessee, auto manufacturing plant. At the time, the case was on review before the full NLRB. Unsurprisingly, the NLRB upheld the Regional Director’s decision on review. Now, Volkswagen is seeking review of that decision in the U.S. Court of Appeals for the D.C. Circuit. 

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

Litigation Bubbles Up Over Wal-Mart Beer Claims

Wal-Mart was sued in Ohio last week in a proposed class action, alleging that the company falsely marketed and priced mass-produced beer as craft beer. The plaintiff explains that he bought a 12-pack of beer that was packaged to look like craft beer, and sold at a higher price point than other mass-produced beers. In order to be called a craft beer, the Brewers Association requires that the brewery make fewer than 6 million barrels annually and be less than 25 percent owned by a mass producer. Wal-Mart’s beer is a part of a collaboration with Trouble Brewing, which the complaint alleges does not exist but is a subset of a large mass beer producer.

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 ...

Providers of technology products and services are consistently innovating to grow their offerings to retailers. These new products and services present significant opportunity for retailers to more effectively reach customers, generate sales and grow revenue. But while these new offerings present a great tool to grow sales in this challenging market, they also can present significant cybersecurity risks.

When a merger raises competitive concerns, the Federal Trade Commission or Antitrust Division of the U.S. Department of Justice may require remedies or conditions before the proposed transaction can proceed. Such remedies may be structural, which require the divestiture of business units to a third-party buyer, and/or behavioral, which require a binding commitment regarding the future behavior of the merged firm. 

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

NAD Clears “Clinically Proven” Jelly Belly Sports Beans, Recommends Against Formulation Claims

The National Advertising Division (“NAD”) found that Jelly Belly could support claims that its Sports Bean Energizing Jelly Beans are “clinically proven” to maximize sports performance, but cautioned the company to nix its claims that the beans are “Scientifically Formulated to Maximize Sports Performance.” Although the NAD expressed some hesitations about study methodology, it found that Jelly Belly’s clinically proven claims were supported by a published clinical study. However, after reviewing the Sports Beans’ ingredients, including electrolytes, carbohydrates, Vitamin C and Vitamins B1-B3, and the evidence Jelly Belly provided demonstrating the role of these ingredients in providing energy during intense exercise, the NAD advised the advertiser to abandon its formulation claim. The NAD noted that Jelly Belly failed to offer any studies indicating how the beans would demonstrably maximize sports performance. Jelly Belly responded by stating that it will comply with the NAD’s recommendation.

Gearing Up For Change in Antitrust Merger Enforcement

“Litigation readiness” was the unofficial theme of antitrust enforcement at the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission over the past eight years. Although determining whether this “litigation readiness” actually resulted in the two antitrust enforcement agencies’ bringing more merger cases than we might have otherwise seen is a complicated question, the practical effect was that deal review took longer, faced increased scrutiny, involved more non-parties, was more expensive and faced more uncertainty than in prior administrations. These effects were evident in the recent number of large-scale, high-profile litigated deals involving retail and consumer products companies, including the FTC’s challenges to the proposed mergers of Staples/Office Depot, Sysco/U.S. Foods and Dollar Tree/Family Dollar, and the Antitrust Division’s challenge to the proposed acquisition of GE’s appliances business by Electrolux.

On February 6, 2017, Acting SEC Chairman Michael Piwowar issued a statement instructing the SEC staff to reconsider the implementation of the SEC’s “pay ratio” rule based on any comments submitted and to determine as promptly as possible whether additional guidance or relief may be appropriate. Chairman Piwowar also opened a 45-day public comment period seeking input on any unexpected challenges that public companies have experienced as they prepare for compliance with the rule and whether relief is needed.

As reported on the Hunton Privacy and Information Security Law blog, on February 6, 2017, the FTC announced that it has agreed to settle charges that VIZIO, Inc., installed software on about 11 million consumer televisions to collect viewing data without consumers’ knowledge or consent. The stipulated federal court order requires VIZIO to pay $2.2 million to the FTC and New Jersey Division of Consumer Affairs. 

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

The Federal Trade Commission Announced Class Action Settlement of VW 3.0-Liter Claims

The FTC announced a settlement with Volkswagen Group of America (“VW”) requiring VW to fully compensate consumers who purchased its 3.0-liter TDI diesel vehicles. The settlement stems from VW’s installation of emissions defeat devices in its diesel TDI vehicles that deceived consumers and emissions testers. The settlement package requires a combination of repairs, monetary compensation and buyback of certain models. It is estimated that VW will pay at least $1 billion under the settlement but could pay as much as $4 billion if it is unable to provide consumers with an adequate emissions repair. The FTC previously obtained a separate $10 billion judgment against VW to compensate consumer who purchased 2.0-liter TDI diesel vehicles with the defeat device.

The beginning of the New Year experienced a drop off in recalls as the busy holiday season came to a close. Nevertheless, two important trends developed throughout January.

On January 31, 2017, Acting SEC Chairman Michael Piwowar issued a statement instructing the SEC staff to reconsider whether its 2014 guidance on the conflict minerals disclosure rule is still appropriate and whether any additional relief for public companies is appropriate. Chairman Piwowar also opened a 45-day public comment period on all aspects of the SEC rule and subsequent guidance.

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.

As reported on the Privacy and Information Security Law blog, on January 23, 2017, the FTC released a Staff Report (the “Report”) on cross-device tracking technology that can link multiple Internet-connected devices to the same person and track that person’s activity across those devices. The Report follows a November 2015 workshop on the same subject and is based on information and comments gathered during that workshop.