Retail Trend Spotter

The FTC has sent a strong message to industry that it plans to hold companies responsible for using endorsements and customer testimonials that deceive consumers.  The recent warning signals the FTC’s focus on fake reviews and endorsements and the agency’s intent to hold brands and advertising service providers accountable where necessary.  The agency is paying particularly close attention to how brands communicate with customers through third party influencers on social media.
Continue Reading FTC Signals Plan to Enforce Civil Penalties for Deceptive Endorsements

California has issued new guidance for the use of face coverings that will take effect on June 15, 2021.  The guidance impacts retailers and coincides with news that approximately 47% of Californians are now fully vaccinated.  Although the new guidance, published by the California Department of Public Health (“CDPH”), will impact how retailers operate vis-à-vis public patrons, it does not impact employer-employee obligations.  Those obligations are still governed by the Cal/OSHA COVID-19 Emergency Temporary Standards (ETS), and in some cases, the Cal/OSHA Aerosol Transmissible Diseases Standard.  You can find our blog about these standards here.
Continue Reading Face-Covering Considerations for Retailers in a Post-Color Tiered California

In today’s COVID-era, more retailers are offering innovative solutions for customers to shop with minimal brick-and-mortar browsing time. Options to place an order online and pick up your items in the store are extremely popular and will likely stick around post-pandemic. These options are convenient and allow customers to avoid dealing with delayed shipping.
Continue Reading Best Practices for In-Store and Curbside Pickup

New York has enacted a sweeping law that regulates automatic renewal programs (subscriptions) modeled after California’s automatic renewal law.
The law impacts retailers and brands that offer membership and other subscription-based business models, including loyalty programs and rewards programs.
It’s a trend. New York will join 25 other U.S. states that have passed or enhanced existing automatic renewal laws to address consumer advertising, disclosures, consent, and cancelation
The new law (New York Senate Bill 1475) goes into effect on February 9, 2021.
Key requirements:

  • Subscription offer terms must be displayed in more clear and conspicuous type than surrounding


Continue Reading New York Passes Wide-Ranging Automatic Renewal (Subscription Model) Law

California retailers facing a variety of complications from the ongoing COVID-19 pandemic now have one additional obstacle to tackle: compliance with new emergency standards from California’s Division of Occupational Safety and Health (“Cal/OSHA”).  On November 19, 2020, the California Occupational Safety and Health Standards Board unanimously adopted emergency temporary standards on COVID-19 prevention in the workplace.  Prior to the adoption of the emergency standards, general and industry-specific guidance from Cal/OSHA was advisory.  However, the new emergency standards are binding and enforceable against nearly all California employers effective November 30, 2020.  This article sets forth the basic requirements under the new
Continue Reading Cal/OSHA’s COVID-19 Emergency Standards Create New Complications and Costs for Retail Employers

On November 16, 2020, California implemented an accelerated application of its Blueprint for a Safer Economy metrics. Under the Blueprint Framework, every county in California is assigned to a tier based on its test positivity and adjusted case rate. Each tier has its own set of restrictions. Three days later, on November 19, 2020, the state issued a limited Stay at Home Order.
Due to the continued rise of new cases and hospital admissions, on December 3, 2020, the state issued a revised Stay at Home Order. Unlike previous statewide stay at home orders, this new Order
Continue Reading California Department of Public Health Issues New Statewide Stay At Home Order Linked to ICU Bed Capacity

Due to the recent surge in COVID-19 cases, the Los Angeles County Department of Public Health (“L.A. Public Health”) announced that all outdoor and indoor dining at restaurants, breweries and wineries will be restricted, effective November 25, 2020 at 10:00 p.m., while take-out, drive thru, and delivery services may continue (“Order”).
Just last week, L.A. Public Health announced that, effective November 20, 2020 all restaurants, breweries and wineries must limit outdoor capacity to 50%. However, officials advised that if the five-day average of cases reaches 4,000 or hospitalization are more than 1,750 per day, L.A. Public Health will prohibit all
Continue Reading Los Angeles County Restricts In-Person Dining Due to Surge in COVID-19 Cases

Women often pay more than men for similar goods and services.  A shampoo for men may be nearly identical in chemical makeup to a shampoo for women, but the woman will pay more.  This phenomenon is referred to as the “pink tax” – products marketed to women cost more than their counterparts marketed to men.  Recent data analyzing toys, clothing, personal care products and home health products shows that: (1) products targeted at women are higher-priced than those targeted at men 42% of the time; and (2) of those items more expensive for women, the prices are an average of
Continue Reading NY’s Gendered Pricing Law: Will It Curb the Pink Tax

Most employers are expected to pass on the IRS’ offer to temporarily delay collecting Social Security taxes.  For background, both employers and employees are generally required to pay a Social Security tax at a flat rate of 6.2% (for a total of 12.4%) on all wages.  In a separate article from our Corporate and Securities Blog, we discussed how the CARES Act allows employers to delay paying the employer’s portion of Social Security taxes.

The Presidential Memorandum dated August 8, 2020 (the “Memorandum”) and IRS Notice 2020-65 (the “Notice”) now allows employers to delay collecting the employee’s portion of
Continue Reading To Defer or Not Defer? IRS Issues Guidance Temporarily Delaying the Collection of Social Security Taxes

Given the prevalence of trade secret misappropriation litigation among members of the fashion, beauty, and retail industry, those in that industry should (1) take care to protect their trade secrets from misuse by others and (2) consider steps to try to reduce the risk of misappropriation claims against them by others.  Both situations – loss of a valuable trade secret and burdensome litigation – can be devastating to a business.  We offer here some potential measures that businesses can take to attempt to avoid such undesirable situations.
A common scenario which gives rise to misappropriation claims is the termination of:
Continue Reading Members Of The Fashion and Retail Industry: Trade Secret Claims Are In Vogue These Days

Arbitration clauses with class action waivers remain one of the most effective tools that consumer-facing companies can employ to fend off consumer class action litigation.  Yet many companies stumble both in getting their customers to agree to the arbitration clause and in drafting a clause that captures all claims that they might face.  As we continue to work, shop, and engage with the world from home, companies should perform a quick “health-check” of their arbitration clause, asking themselves at least the following questions:
(1)  If you contract with your customers through formally executed documents, do you ensure that your customers
Continue Reading An Arbitration Clause Health Check

The Coronavirus Aid, Relief and Economic Security (CARES) Act, enacted on March 27, 2020, provides relief to corporate and non-corporate taxpayers by expanding the permitted use of net operating losses (“NOLs”).
While prior to January 1, 2018 a calendar year taxpayer could carry back NOLs two years and carry them forward 20 years, the Tax Cuts and Jobs Act (“TCJA”) altered the NOL regime by prohibiting NOL carrybacks for NOLs arising in taxable years beginning on or after January 1, 2018 and limiting NOL deductions in such years to 80 percent of taxable income while permitting carryforwards indefinitely ).
Now,
Continue Reading NOL 5-Year Carryback and 100 Percent Offset Available Under The Cares Act

In a post from our Class Action Defense Law Blog, we highlighted some questions that companies may want to ask when evaluating whether their arbitration clauses are enforceable.  If changes need to be made to those clauses, then companies should consider how to implement those changes so as to ensure those are enforceable too.  The following is what you should be thinking about and asking.
If an agreement needs to be amended to add or modify an arbitration clause, you should strongly consider having customers re-agree to a contract or set of terms and conditions with the new arbitration
Continue Reading Questions To Ask When Changing Your Arbitration Clause

World renowned beauty brand and Sheppard Mullin client Glossier is standing behind its values with a new initiative to provide grant funding to beauty companies owned by Black entrepreneurs.
The company, started by all female founders, recognized the disproportionately small amount of venture capital funding that goes to businesses owned by Black women each year. Glossier’s initiative will provide advisory support and grants of up to $50,000 to Black beauty entrepreneurs whose applications are accepted.
The company’s $1 million commitment to tackle inequity in the beauty industry also includes donations to non-profit organizations working to fight systemic racism every day.
Continue Reading Highlighting Initiatives Fighting Racial Inequity: Glossier Supports Entrepreneurs and Sheppard Mullin Trains Police Departments

On March 22, 2020, Governor Cuomo issued an executive order that closed all non-essential businesses in New York State (the “Order”).  In connection with the Order, New York City restaurants were forced to reduce their operations to pick-up and delivery only.  On June 8, 2020, New York City entered into Phase I of the New York State reopening plan.  It is anticipated that sometime between June 22, 2020 and the beginning of July, 2020, New York City will enter into Phase II.  During Phase II, restaurants will not be allowed to serve patrons indoors, but will be permitted to commence
Continue Reading A Streamlined Process: Expedited Temporary Outdoor Dining Permits For NYC Restaurants

This post originally appeared on the Council of Fashion Designers of America website, CFDA.com.
Before the COVID-19 outbreak, fashion retail already faced difficult times with numerous bankruptcies, such as Barneys, Sonia Rykiel, Roberto Cavalli and Diesel.  Now with COVID-19, fashion retail confronts a “perfect storm” — the hurricane of the disruption of brick and mortar retail caused by omnichannel retailing and the Nor’easter resulting from the shutdown of all retail stores and lockdown of consumers in the US.  It is anticipated that retail bankruptcy filings will proliferate in the wake of COVID-19 and, as a result, it is important
Continue Reading Fashionista’s Guide to Bankruptcy: What Every Designer Needs to Know to be Protected in Times of Economic Uncertainty