Hunton Retail Law Resource

After a February 2015 proposed rulemaking (the “NPRM”) faced a firestorm of comments, the Federal Aviation Administration (“FAA”) has determined “that further engagement with industry and stakeholders is needed” before any attempt is made to finalize regulations for very small unmanned aircraft systems, also known as “Micro UAS.” In response, the FAA chartered the Micro UAS Aviation Rulemaking Committee (“ARC”) to continue the review process and prepare recommendations to the FAA for future rulemakings. As originally conceived by the NPRM, Micro UAS are drones weighing less than 2 kilograms (4.4 pounds) that are constructed of malleable materials that will break, bend or “yield on impact so as to present a minimal hazard to any person or object.” The Micro UAS ARC was formed amidst pressure from drone manufacturers and commercial users to appropriately balance safety and privacy concerns with wider drone use.

Yesterday, the Federal Trade Commission laid down a clear marker for retailers in announcing a settlement with Lord & Taylor. This is the agency’s first native advertising case since issuing its Enforcement Policy Statement on Deceptively Formatted Advertising and its Native Advertising Business Guidance in December 2015.

As reported on the Hunton Employment and Labor Law Blog, the Equal Employment Opportunity Commission (“EEOC”) has implemented nationwide procedures which require all EEOC offices to release copies of an employer’s entire position statement, together with all non-confidential documents submitted in support of the position statement, to an employee who has filed a discrimination charge, or his or her representative (including attorneys). These procedures apply to all position statements requested after January 1, 2016. Previously, such disclosures were made in the discretion of the particular field offices or investigators, and practices were inconsistent. As often as not, EEOC investigators might summarize the employer’s evidence and arguments for the employee, in order to solicit the latter’s response.

As reported on the Hunton Employment and Labor Law Blog, the implementation of the NLRB’s ambush election rules in April 2015 has considerably shortened the average time between the date of a petition being filed by a union and the date of election. This change substantially impacts the employer’s ability to conduct an effective campaign in the event of a union petition.

This past week, the following consumer protection actions made headlines:

Food Marketing: Consumers Respond to Motion to Dismiss their Claims Against Walmart’s Missing Pork

On March 9, 2016, plaintiffs in a suit against Walmart Stores, Inc. responded to the company’s  motion to dismiss, saying that their complaint sufficiently put the retailer on notice of allegations that Walmart’s Great Value Pork & Beans in Tomato Sauce lacked an important ingredient: pork. The plaintiffs argue that the USDA requires pork and beans products to contain at least 12 percent pork in order to advertise pork on its labels, and that plaintiffs’ testing did not show any traces of pork in the product. Walmart contends in its motion to dismiss that its labels plainly state that the product contains less than 2 percent pork, and that plaintiffs’ claims are preempted by food labeling laws.

Companies across all industries, including retail, are seeing a significant uptick in software audits and similar software license compliance reviews. These audits can disrupt the day-to-day operations of even the most efficient IT departments and result in additional license fees, back-maintenance payments, penalties for noncompliance and external legal fees. The more aggressive software licensors may also threaten breach of contract claims, infringement claims, remote disabling of software, suspension of maintenance and other more disruptive practical measures. However, there are ways to limit exposure to such costly software audits and the associated risks, and to even prevent them from occurring in the first place.

As reported in the Hunton Employment and Labor Law Blog, under the Fair Labor Standards Act (“FLSA”), employers who use a tip credit to satisfy their minimum wage obligations for tipped employees must follow certain rules related to those tips. One of those rules relates to the use of tip pools – i.e., pooling of tips received by multiple tipped employees and then dividing the total among the pool participants based on a specified formula. Under Section 3(m) of the FLSA, employers who rely on the tip credit and who require their tipped employees to contribute their tips to a tip-pooling arrangement must ensure that the only employees who participate in the pool are those that “customarily and regularly” receive tips. This typically means that managers, hostesses, cooks, dishwashers and other non-tipped employees cannot participate in the tip pool if the employer wants to rely on the FLSA’s tip credit.

On February 29, 2016, News Corporation reached a $244 million settlement with a consumer product manufacturer class to end claims that it monopolized the market for third-party, in-store promotions by entering into long-term, exclusive contracts, and that it overcharged its advertisers by over $674 million in the last seven years. News Corp. acts as an intermediary between retailers and consumer product manufacturers by buying up advertising space on shelves and store floors and then reselling that space to consumer product manufacturers. Plaintiffs alleged that News Corp. used exclusive contracts to tie up nearly 90 percent of the in-store promotions market, and manufacturers, including Dial and Heinz, claimed News Corp. used that monopoly power to extract unfairly high prices.

This past week, the following consumer protection actions made headlines:

Retail Pricing: Class Action Complaint Against Gap Dismissed

A putative class action, alleging that The Gap, Inc.’s deceptive advertising in stores confuses customers as to what products are actually discounted and tricks many into buying products at full price, was tentatively tossed by a California state judge last week. The Court granted Gap’s demurrer in part because the named plaintiff failed to identify particular advertisements relied upon in her purchases and, more importantly, could not allege that she was actually injured by Gap’s alleged practices. In fact, the Court stated that being “psychologically committed” to an item such that the named plaintiff did not return it was not enough to state a claim. The court gave the plaintiff one last chance to allege an injury.

As reported in the Hunton Employment and Labor Law Blog, on March 1, 2016, the United States Equal Employment Opportunity Commission (“EEOC”) sued employers for the first time for sexual orientation discrimination. The EEOC filed lawsuits in federal courts in Pittsburgh and Baltimore against manufacturing and health care employers for unlawful sex discrimination on behalf of employees alleging they were harassed and discriminated against based on their sexual orientation.