Welcome to your monthly legal insights on the trends impacting the Retail, Hospitality, and Food & Beverage Industries.
Cybersecurity/Privacy
It’s a New Year and a Good Time for a Cybersecurity Checkup
2023 was another active year in cybersecurity, with high profile vulnerabilities and data breaches, and government and private sector responses. Businesses face a host of new compliance obligations with new regulatory requirements, including the Securities Exchange Commission (SEC), the Federal Trade Commission (FTC) the Federal Communications Commission (FCC) and new state security and privacy laws and regulations. Clark Hill’s David Ries and Melissa Ventrone outline cybersecurity programs for both compliance and preventative aspects. It’s a New Year and a Good Time for a Cybersecurity Checkup | News & Events | Clark Hill PLC
Google Changes Policies to Give Users Control Over Information
Through updates pushed out in December, Google will now allow users to view their recent activity related to specific places. Google will also allow users to see and to delete information maintained by Google (like searches, directions, visits, and shares) as well as to limit the information available about past places visited. Google is also adjusting its auto-deletion of data from 18 months to 3 months—decreasing the amount of data stored. This will give users more control over their data in keeping with recent trends and expectations from consumers.”
FCC Announces Partnership with State AGs (Attorney General)
The FCC announced in December that it had signed a Memorandum of Understanding with several state Attorneys General “to share expertise, resources, and coordinated efforts in conducting privacy, data protection, and cybersecurity-related investigations….” The agreement, signed with the Attorneys General of Connecticut, Illinois, New York, and Pennsylvania, is hoped to allow for more thorough and effective investigations of privacy related incidents. This effort also confirms the continued and increasing attention being placed on the protection of consumer data privacy and should be a concern for those businesses who have not yet paid attention to their privacy compliance and potential exposure.”
Labor & Employment
Effective Date of New Chicago Paid Leave Ordinance Delayed
On Dec. 13, the Chicago City Council voted unanimously to delay the Dec. 31, 2023, implementation of the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance to July 1, 2024. Until then, the Chicago Paid Sick Leave existing ordinance will remain in effect. It requires employers to allow employees to earn one hour of paid sick leave for every 40 hours worked. The accrual rate in the existing ordinance is a bit different from the accrual rate in the new ordinance, which is one hour for every 35 hours worked. The new accrual rate will go into effect July 1, 2024. For detailed information on the update, please click here. Jonathan Vegosen and Renee Fell authored a great overview of this ordinance.
Our Working Theory: Creating a Respectful Workplace Is the Antidote to Sexual Harassment in the Workplace
Clark Hill’s Labor & Employment attorneys, Maria Dwyer and Vanessa Kelly hosted a webinar on December 6 discussing creating respectful workplaces to deter harassment claims. Click here to view the top 10 takeaways for practical application of the concepts discussed during the webinar.
Food and Beverage News
Bills in Dover aim to Allow Direct Shipments and Home Delivery of Alcohol
Delawareans are awaiting potential changes in the state’s alcohol sales laws that might bring the convenience of online wine shopping and home delivery of alcoholic beverages to their doorsteps. Currently, Delaware remains among the few states in the U.S. where direct shipment of wine to consumers is prohibited. For more details on this new law, visit here.
Oregon Liquor and Cannabis Commission (OLCC) Implements New Alcohol Delivery Oversight, Permit Program
Starting January 1, companies that deliver beer, wine, cider and pre-made cocktails to Oregonians will be required to obtain a Third-Party Delivery Facilitator permit from the Oregon Liquor and Cannabis Commission (OLCC) and to train their delivery drivers to keep alcohol out of the hands of minors and visibly intoxicated persons. For more details, visit here.
Next Wave of Non-Alcoholic Beverages to Feature Mood-Boosting Ingredients
Functional formulations may be the next step in the future of alcohol-free beverages.
Having originated with an initial focus on creating sober beer options, the alcohol-free beverage trend has seen rising interest over the last few years. Data from drinks market analysis company IWSR found the low- and no-alcohol products segment grew to more than $11 billion in value in 2022, representing a growth of more than $3 billion since 2018, and a survey conducted by Edelman Data and Intelligence showed 69% of alcohol drinkers, 81% of Gen Z consumers and 78% of millennials would explore a “sober curious” or “damp” lifestyle. For more details, visit here.
Illinois Unveils New Law Targeting Providers of Alcohol to Underage Drivers
Illinois has ushered in a new era of road safety with landmark legislation, aimed squarely at curbing the menace of underage drinking and driving. The law, known as House Bill 1155, came into effect on January 1, 2024, and introduces civil penalties for private individuals who supply alcohol or drugs to underage drivers on residential properties. Prior to this, only those who provided substances at non-residential locations were liable to be sued. For more details on this new law, click here.
ABC Highlights New Alcoholic Beverage Laws
The Department of Alcoholic Beverage Control (ABC) is providing the following summary of new alcoholic beverage laws that took effect in 2023 and laws that will take effect in January 2024. This information helps clarify what new statutes and regulations mean but is not regulatory. Please consult the statute, regulation, or an attorney before taking any action to ensure compliance with the law. For more details on these new laws, please click here.
International Trade
The European Union Apparel Market Is Facing Serious Forced Labor Allegations
Clark Hill’s international trade team authored an article “The European Union Apparel Market Is Facing Serious Forced Labor Allegations.” A report issued last week alleges that a “substantial volume” of clothing is tainted with forced labor and is significantly tied to China’s Xinjiang Uyghur Autonomous Region (“Uyghur Region”). The report, written by several researchers from the Helen Kennedy Centre for International Justice at Sheffield Hallam University (“SHU”) in the United Kingdom, claims that the apparel industry, including 39 well-known brands such as H&M and Zara, is at high risk of sourcing materials, particularly cotton and PVC, from the Uyghur Region using forced labor and state-imposed labor transfer programs.
Seafood May be the Next Target to Curb Forced Labor from China
The U.S. government continues to increase its goal of eradicating forced labor through its trade policy. Under the Uyghur Forced Labor Prevention Act (UFLPA), in addition to tomatoes, Customs and Border Protection (CBP) is considering adding seafood to its watchlist of priority industries. Grocers, restaurants, and other companies that rely on imports of seafood from China, especially shrimp processors, could face delays or shortages if the imported product is detained by CBP at the port. The importer bears the high burden of proving that the imports were not made with forced labor. To have the products released by CBP depends largely on a thorough supply chain trace and on whether the supplier is on the UFLPA entity list. It is advisable for companies to conduct supply chain diligence and a sample trace in advance to minimize the risk of detentions.
New Trade Case on Imports of Certain Glass Wine Bottles from China, Mexico, and Chile
Clark Hill’s international trade team authored an article, “New Trade Case on Imports of Certain Glass Wine Bottles from China, Mexico, and Chile.” Three new U.S. antidumping (“AD”) petitions were filed on Dec. 28 by the U.S. Glass Producers Coalition (“GPC” or “Petitioner”) against imports of certain glass wine bottles (“wine bottles”) from China, Mexico, and Chile. Petitioner also filed one countervailing duty (“CVD”) petition against imports of wine bottles from China.
Efforts to Close the “de Minimis” Loophole for Inexpensive Imports
Forbes recently reported on a bipartisan effort to close a de minimis loophole in International Trading for goods sold under $800 allowing such goods to escape inspection and taxation. The law was originally passed to permit US tourists to return home from international travel with souvenirs without customs’ declarations. US based retailers are crying foul on companies such as Chinese based Temu and Shein who offer goods and merchandise direct to consumers at rock bottom prices. Temu’s Blazing Run Could Falter In 2024 With Changes to Tax Break (forbes.com)
Predictions and Trends
What Retailers Should Learn From 2023 Heading into 2024
With 2024 here, it is worthwhile for retail businesses to take note of which way the 2024 trend winds are blowing. Jonathan Roffe provides a great update on trends and what businesses should prioritize for this year.
Brands to Capitalize on Women’s Basketball Popularity
According to a report from Cognitive Market Research, the US sneaker market was valued at approximately $1.38 million, with the men’s share being 71%. The report notes that the women’s market share is “expected to grow rapidly in the coming years” as brands capitalize on the growing popularity of women’s basketball. A Whole New Shoe Game for Women (forbes.com)
ESG (Environmental, Social & Governance) Trends
Greenwashing Litigation: Reduce the Risk of Getting Stuck in the Weeds
Clark Hill’s Jonathan Roffe and Madison Shepley share an interesting article for retailers describing consumers increased focus on how their purchasing habits impact the environment with a preference for “green” products and packaging, especially in the fashion, food, and cleaning product categories. However, with the increase in “environmentally responsible” labeled products comes the potential of false advertising and other claims (“greenwashing litigation”) where the labels may be inflated or false. For a deeper dive into this emerging area, Greenwashing Litigation: Reduce the Risk of Getting Stuck in the Weeds | News & Events | Clark Hill PLC.
