Hunton Retail Law Resource

As reported on Hunton's Employment & Labor Perspectives blog, the U.S. Supreme Court has voted to hear an appeal of the Ninth Circuit’s decision in Varela v. Lamps Plus, Inc. The Supreme Court is expected to decide whether workers can pursue their claims through class-wide arbitration when the underlying arbitration agreement is silent on the issue. The case could have wide-reaching consequences for employers who use arbitration agreements.

Bumble Bee Foods’ woes continue to mount as its CEO, Christopher Lischewski, has been indicted for price fixing. The indictment alleges that Lischewski participated in the price fixing conspiracy from approximately November 2010 until about December 2013. Lischewski is not the first Bumble Bee executive to be charged: in late 2016 and early 2017, two Bumble Bee Senior Vice Presidents pled guilty to price fixing, and in May 2017, Bumble Bee agreed to pay $25 million in fines for price fixing. 

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

FTC Expands Agency’s Leadership Team with New Consumer Protection Director

Federal Trade Commission Chairman Joseph Simons announced the appointment of Andrew Smith as Director of the agency’s Bureau of Consumer Protection, beginning next week. Smith is Chair of the American Bar Association’s Consumer Financial Services Committee and a Fellow of the American College of Consumer Financial Services Lawyers. From 2001-2004, he served as Assistant to the Director of the Bureau of Consumer Protection and FACT Act Program Manager, leading implementation of the FACT Act rulemaking, proceedings and studies. The vote to install Smith was 3-2, with the FTC’s two democratic commissioners filing statements in opposition.

In a speech to the New York City Bar White Collar Crime Institute on May 9, 2018, Deputy Attorney General Rod Rosenstein announced a new Department of Justice (“DOJ”) policy intended to ensure coordination among DOJ departments and other enforcement agencies when pursuing penalties against corporations for violations arising out of the same conduct. The policy, incorporated into the U.S. Attorneys’ Manual at § 1-12.100, seeks to avoid imposition of duplicative penalties by “instructing Department components to appropriately coordinate with one another and with other enforcement agencies in imposing multiple penalties on a company in relation to investigations of the same misconduct.”

Hunton Andrews Kurth LLP’s retail industry team is pleased to announce their Band 2 ranking in the 2018 Chambers and Partners guide. Chambers and Partners notes that the team is known for its “expertise in technology, data protection and e-commerce…[with a] robust class action defense practice.” Clients attest that one of the team’s strengths is “innovati[on] on complex litigation.”

In recent years, publicly traded retailers have experienced a significant uptick in interest from investors focused on Environmental, Social and Governance (“ESG”) issues. On April 23, 2018, the Department of Labor (“DOL”) released Field Assistance Bulletin 2018-01 (the “FAB”). The FAB applies to certain retirement plan fiduciaries who make investment and proxy voting decisions that derive from ESG concerns, and may impact investor behavior at public retailers.

Read our full alert.

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

FTC Swats Misleading Advertising Claims Just in Time for Mosquito Season

The FTC and makers of the “Aromaflage” line of products have agreed to settle charges that Mike & Momo, Inc., deceptively marketed its mosquito-repelling perfume sprays and scented candles. The company agreed to stop making unsubstantiated claims that its products repel disease-carrying mosquitos, work for 2.5 hours, and are as effective as 25 percent DEET. The FTC also alleged that Mike & Momo packed its Amazon storefront with five-star reviews written by the owners and close family members; under the proposed consent order Mike & Momo must disclose any “unexpected material connection” between the company and any endorsers.

The California Supreme Court has adopted a new three-part test to determine whether a worker is an independent contractor or an employee under California’s wage orders, which regulate wages, hours and working conditions. The highly anticipated ruling could have wide-ranging effects for businesses operating in California and beyond, as companies try to navigate the new gig economy.

April was an historic month for the CPSC. The agency approved a $27.25 million civil penalty—the largest in CPSC history. The significance of this record amount cannot be overstated. The previous record was held by a $15.45 million civil penalty approved in March of 2016. In fact, except for in 2016, the CPSC has never approved civil penalties that totaled $27.25 million in each of the last ten calendar years. Now, it is has done so in 2018 with just one civil penalty.

As reported on Hunton's Privacy and Information Security Law blog, the FTC has modified its 2017 settlement with Uber after learning of an additional breach that was not taken into consideration during its earlier negotiations with the company. The revised proposed agreement goes beyond the FTC’s original settlement mandating that Uber implement a comprehensive privacy program. The expanded FTC order would require Uber to address software design, development and testing; how the company reviews and responds to third-party security vulnerability reports; and prevention, detection and response to attacks, intrusions or systems failures. Uber also would be required to report to the FTC any episode where it has to notify any U.S. government entity about the unauthorized access of any consumer’s information.