Hunton Retail Law Resource

These two worlds are colliding. If any of the products you sell contain hidden ‘forever chemicals’ you will be subject to EPA’s new reporting rule.

On July 21, 2021, the Federal Trade Commission announced increased scrutiny on purported restrictions of consumers’ “right to repair.” The statement, approved unanimously by the Commissioners, comes on the heels of the FTC’s "Nixing the Fix" report released to Congress earlier this year. That report asserted that some manufacturers use “anticompetitive practices” to limit the ability of consumers and independent repair shops to fix and maintain products. According to the FTC, those limitations “may increase costs, limit choices, and impact consumers’ rights under the Magnuson-Moss Warranty Act.”

On July 21, 2021, during an open Commission meeting, the Federal Trade Commission (Commission) voted to retain its longstanding Care Labeling Rule. This decision came after the Commission previously sought comment (in July 2020) on a proposal to repeal. The Rule, which has been in effect since 1971, requires manufacturers and importers to affix labels to certain garments and other goods providing care instructions, including dry cleaning or washing, bleaching, drying and ironing.

At the Federal Trade Commission’s (FTC) July 1 meeting, it finalized a new “Made in USA” Rule that was almost two decades in the making. The FTC issued a notice of proposed rulemaking in June 2020 and received 700 comments from stakeholders. During that time, the FTC has aggressively policed Made in USA claims (through an enforcement policy statement), settling a historic, million dollar follow-on Made in USA enforcement action and obtaining a six-figure settlement with an online retailer.

The CPSC has recently focused its enforcement efforts on children’s products.  Fisher-Price recalled two of its infant sleep products—Rock ‘n Glide Soothers and Soothe ‘n Play Gliders—after four infant deaths were reported involving the first product.  All four infants were placed in the products unrestrained on their backs and were later found on their stomachs deceased.  This news comes after the CPSC’s actions last month to approve a new federal standard for infant sleep products and to recall two more products related to infant sleep.

Business re-openings, increased hiring, and a fresh batch of stimulus checks have driven a recovery in retail sales during the first half of 2021.  However, the collective sigh of relief that many retailers (and their landlords and lenders) are breathing is not being shared by all.  The recovery is not benefitting every retailer evenly, and some may never recover their pre-pandemic sales as COVID-19 has accelerated trends towards e-commerce and away from larger brick and mortar locations.  Many commercial tenants who were unable to secure rent forgiveness from their landlords still owe rent from April and May 2020, when nearly half of commercial retail rents went unpaid.  As struggling retailers weigh their options, some recent cases involving The Gap, Inc. offer insight into how courts may treat attempts by commercial tenants to break their leases using COVID-19 as justification.

In a recent post (“Environmental, Social and Corporate Governance: What are the Risks, Really?”), we discussed the various risks, trending issues, and emerging concerns arising from environmental, social, and corporate governance factors (“ESG”). As noted previously, neglecting ESG considerations can result in a number of risks to a company, including risks associated with the reputational, financial, and legal impacts of handling ESG issues poorly. We also observed how managing ESG issues well can enhance corporate value and performance, and create competitive advantages for companies. Given these emerging risks and opportunities, it is perhaps unsurprising that ESG has begun to play a larger role in the M&A context in recent years.