FTC, DOJ Issue Antitrust Guidance for HR Professionals

This past week, the FTC and DOJ issued an 11-page guidance document (the “Guidance”) aimed at protecting employees against anticompetitive conduct with respect to naked wage-fixing and agreements, in which companies agree on salary or other terms of compensation, and anti-poaching agreements, in which companies agree not to recruit each other’s employees. The Guidance for human resource (“HR”) professionals and hiring managers relates to both hiring and compensation decisions. Continue Reading

Gaps in Retailer’s Insurance Program Jeopardize Coverage for Cyber Breach

As reported in the Hunton Insurance Recovery blog, a federal judge in Alabama ruled Tuesday that a grocer could not rely on its legacy business insurance policies – including an “electronic data” coverage extension – to protect against third-party claims after customer data was compromised by a point-of-sale cyber attack. The decision in Camp’s Grocery, Inc. v. State Farm Fire and Casualty Company is another reminder to retail policyholders to ensure that their cybersecurity programs include both adequate cybersecurity safeguards and appropriate first-party and third-party cyber/crime insurance coverages. Failure to maintain either may jeopardize coverage for resulting cyber losses. Continue Reading

Consumer Protection in Retail: Weekly Roundup

The following consumer protection actions made headlines this week:

Epson to Make Advertising Modifications Following NAD Recommendations

Epson America Inc. has agreed to make some modifications to its advertising after a challenge from HP. The NAD recommended Epson discontinue its “loaded and ready” claim as it may confuse consumers into thinking its EcoTank printers are pre-filled with ink and ready to print immediately. The NAD reviewed numerous other Epson claims, including: (1) EcoTank printers offer “an unbeatable combination of convenience and value”; (2) EcoTank printers will “save [consumers] a small fortune on ink”; and (3) implied claims that EcoTank printers provide environmental benefits versus other printers. While the NAD found that the EcoTank printer can save a consumer money in the long run, it recommended that Epson discontinue its “small fortune” claim. The NAD also found that Epson provided support for its implied comparative environmental claims. Continue Reading

Chemence to Drop ‘Made in USA’ Claims and Pay 220,000 USD Fine

On October 19, 2016, Chemence, Inc., the manufacturer of products such as Hammer Tite, Krylex Glues and Kwik Fix, agreed to resolve an FTC challenge of the company’s “Made in USA” and “Proudly Made in USA” claims. The settlement  requires Chemence to pay $220,000 and substantiate any future “Made in USA” claims. Continue Reading

SEC Filed Record Number of Enforcement Actions in FY 2016

On October 11, 2016, the SEC announced its enforcement results for the fiscal year which ended on September 30, 2016. A total of 868 enforcement actions were filed, which set a new record for the most actions in a single year. The SEC filed 61 more actions in 2016 than in 2015, representing a year-over-year increase of almost 7.6 percent. The actions resulted in total disgorgements and penalties of over $4 billion, down slightly from last year’s $4.19 billion. Continue Reading

New Changes to U.S.-Cuba Regulations Further Clarify and Ease Restrictions

In a continued effort to implement the policy change announced by President Obama on December 17, 2014, to engage and empower the Cuban people, the Office of Foreign Assets Control (“OFAC”) has announced additional amendments to the Cuban Assets Control Regulations. These amendments, which went into effect on October 17, 2016, constitute the sixth time that the various sets of regulations governing Cuba have been amended. Continue Reading

Consumer Protection in Retail: Weekly Roundup

The following consumer protection actions made headlines this week:

Mylan Reaches $465 Million Settlement Over Medicaid Classification

On October 7, 2016, Mylan Inc. announced that it had agreed to pay $465 million to resolve a DOJ investigation into Mylan’s classification of EpiPen as a generic drug that resulted in Medicaid and Medicare receiving a significantly smaller rebate on every prescription since 2007. The DOJ, on behalf of the Centers for Medicare & Medicaid Services (“CMS”), investigated whether EpiPen should have been classified as a “branded” drug, which would have given CMS at least a 23.1 percent rebate, as compared to the 13.1 percent rebate CMS received for Mylan’s self-classification of EpiPen as a generic drug. Mylan believed that although the injector pen device was patented, the relevant consideration for CMS classification is that the active ingredient in EpiPen is off-patent. The DOJ agreement resolves the government’s classification concerns, but does not address potential private class action litigation. Continue Reading

EEOC Requires Disclosure of Pay Data in Revised EEO-1 Report

Recently, the EEOC has announced the approval of a revised EEO-1 report (“Revised Report”), applying to the 2017 calendar year with the first report due by March 31, 2018. In addition to the disclosures required by the current EEO-1 report, the Revised Report will require employers with 100 or more employees to provide compensation data and the number of hours worked by employees across 12 separate pay bands, categorized by gender, race and ethnicity. The current EEO-1 report only collects data regarding the number of employees categorized by gender, race and ethnicity in 10 different job groupings. Continue Reading

Consumer Protection in Retail: Weekly Roundup

The following consumer protection actions made headlines this week:


Zeltiq’s CoolSculpt Claims Referred to FTC and FDA

On October 5, 2016, the NAD referred advertising claims from Zeltiq Aesthetics, Inc., to the FTC and the U.S. Food and Drug Administration (“FDA”) for Zeltiq’s “CoolSculpting Cryolipolysis Body Contouring System,” a medical device that, according to the advertiser, uses a cooling treatment to target fat cells beneath the skin. The device is FDA approved, and the NAD found that the claims that the product is “FDA-cleared” and would result in a “slimmer you” were supported. However, the NAD recommended that Zeltiq add further disclosures about how the product works. Zeltiq said that it would comply with most, but not all, of NAD’s recommendations; per NAD procedure, the matter will be referred to the FTC and FDA. Continue Reading

Recall Roundup: September

Much ado about lithium-ion batteries. If you have watched the news, you have seen that certain smartphones have been recalled due to fire and burn hazards posed by the phones’ lithium-ion batteries. While this recall is important, it is not unique. This year alone, at least nine other companies have issued recalls due to problems with lithium-ion batteries. These recalls include video baby monitors, batteries in laptop computers, batteries in flashlights and other battery packs. Not to mention last year’s slew of recalls over the most popular holiday gift – the hoverboard. While there are advantages to lithium-ion batteries, such as their recharge capability and their low memory effect, there are risks to using them in household electronic devices. Manufacturers must assess these risks when rolling products out to the public. Companies could not only face an expensive recall, but also a potential shift in public perception of the quality of its devices that could have repercussions long after the initial recall is over. Continue Reading