How Companies Can Comply with the Newly Effective Consumer Review Fairness Act

On March 14, 2017, the Consumer Review Fairness Act of 2016 (the “Fairness Act”) will come into effect, 90 days after it was signed into law by President Obama. The Fairness Act voids any provision in a form contract between a consumer and a business that (1) restricts the consumer’s ability to leave reviews, (2) imposes penalties for leaving negative reviews or (3) transfers intellectual property rights in reviews or feedback content from the consumer to the business. The Fairness Act was passed in response to an increase in the use of so-called “non-disparagement clauses” that prohibited consumers from sharing their honest opinions about a seller’s goods, services or conduct. Continue Reading

Heightened Audit Risk for Users of mySAP ERP and Other SAP Products

Emboldened by its recent victory in SAP v. Diageo (2017) EWHC (TCC) 189, SAP may become even more opportunistic when it comes to auditing its customers’ use of various SAP products. On February 16, 2017, the England and Wales High Court of Justice, Queen’s Bench Division (Technology and Construction Court) ruled that the use by Diageo’s sales representatives and customers of various software systems that pulled data from and pushed data to Diageo’s instance of mySAP ERP, even though there was no direct access to or use of mySAP ERP by such sales representatives or customers, constituted impermissible access to and use of mySAP ERP under Diageo’s license agreement with SAP. Continue Reading

The Hague Securities Convention Affecting Securities Held in Securities Accounts

On April 1, 2017, the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities Held with an Intermediary (the “Convention”) will become effective in the United States. The Convention will, as federal law of the U.S., apply to determine the choice of law relating to certain matters concerning securities held in securities accounts, including, among other things, the law affecting perfection and priority of security interests in securities held in securities accounts. This development is particularly noteworthy to retailers that maintain secured lines of credit for working capital purposes or who have issued secured debt securities in the capital markets.

Read the full alert.

Neiman Marcus Agrees to Settlement in Data Breach Class Action

On March 17, 2017, retailer Neiman Marcus agreed to pay $1.6 million as part of a proposed settlement (the “Settlement”) to a consumer class action lawsuit stemming from a 2013 data breach that allegedly compromised the credit card data of approximately 350,000 customers. Continue Reading

Managing Privacy and Data Security Risks in M&A Transactions

On April 5, 2017, Hunton & Williams LLP and Stroz Friedberg will host a webinar on managing privacy and data security risks before, during and after an M&A transaction. Join Lisa J. Sotto, partner and chair of Global Privacy and Cybersecurity at Hunton & Williams; Rocco Grillo, Cyber Resilience Global Leader from Stroz Friedberg; and Keith O’Sullivan, CISO from Time Inc., for a discussion on how to prepare for and understand privacy and data security challenges in the context of corporate transactions. Continue Reading

Another Step in the NLRB’s Mission to Expand Definition of “Concerted Activity” under the NLRA

On March 6, 2017, an NLRB administrative law judge (“ALJ”) issued a ruling finding that a nonunion automotive manufacturing facility in Alabama violated Section 8(a)(1) of the National Labor Relations Act (“NLRA”) when it terminated three employees who walked off the job over a holiday-season scheduling dispute. The ALJ found that the employees were engaged in protected concerted activity despite the fact that they denied discussing the decision to leave work before their shifts had ended. Continue Reading

Consumer Protection in Retail: Weekly Roundup

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

FTC Settles Claim Against LA Car Dealership Group for $3.6 Million

The FTC has settled a claim brought against a group of nine auto dealerships and their corporate owners for over $3.6 million. According to the complaint, Sage Auto Group engaged in unfair and deceptive practices, as well as violations of the Truth in Lending Act and Consumer Leasing Act.

The FTC alleged that Sage targeted consumers with poor credit or who would otherwise have difficultly acquiring financing, frequently omitting or concealing material terms in ads. The FTC also alleged that Sage deceptively posted falsified positive consumer reviews to combat overwhelmingly negative reviews on social media websites. Continue Reading

Why Retail Developers and Tenants Should Reconsider the Use of Detailed REAs

Recently, the Fourth Circuit affirmed a $31 million dollar jury award in favor of retailer Lord & Taylor for lost profits in connection with a breach of its reciprocal easement agreement (“REA”) with D.C.-area mall owner White Flint, LP. The court found White Flint’s efforts to redevelop the regional mall into a mixed-use project violated the terms of the REA under which the mall landlord agreed to maintain the site as a “first-class high fashion regional Shopping Center.” Continue Reading

Supreme Court to Rule on Legality of Class Action Waivers in Employer Arbitration Agreements

As reported on the Hunton Employment & Labor Law Perspectives blog, the United States Supreme Court has granted consolidated review of three cases to determine whether arbitration agreements that waive employees’ rights to participate in a class action lawsuit against their employer are unlawful. The Court’s decision to address the uncertainty surrounding class action waivers of employment claims follows a circuit split last year in which the Fifth and Eighth circuits upheld such waivers and the Seventh and Ninth circuits found that such waivers violate the National Labor Relations Act (“NLRA”). Given the increasingly widespread use of class action waivers by employers to stem costly class and collective actions, the high court’s ruling is likely to have a significant nationwide impact. Continue Reading

Consumer Protection in Retail: Weekly Roundup

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

Kraft Suit Stayed Pending Outcome of FDA Guidance

A federal judge in Puerto Rico granted Kraft Foods Group Inc.’s (“Kraft’s”) motion to stay pending the completion of the FDA’s inquiry into the use of the term “natural” on food labeling. The suit alleges that Kraft falsely labeled its shredded cheese as “natural” despite containing artificial food coloring. The case is stayed until the FDA provides guidance on the use of that term on food labels.  Continue Reading

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