Seeking to Stop Deceptive ‘MADE IN USA’ Claims, the FTC Takes Action Against Brandnex

On January 25, 2021, President Joe Biden issued an Executive Order entitled “Ensuring the Future is Made in America by All of America’s Workers,” which directs a broad review and strengthening of governmental procurement and financial assistance policies and regulations which require or provide a preference for goods, products or materials produced in the United States.[1]  While US content must be disclosed on automobiles, textile, wool and fur products sold in the US[2] and there is no law which requires a company to disclose the amount of US content or that a product is manufactured in the US, manufacturers and retailers who make claims about the amount of US content in their products must comply with the  “MADE IN USA” Enforcement Policy Statement issued by the Federal Trade Commission (“FTC”).[3]  The Enforcement Policy Statement applies to all products advertised or sold in the US, except those specifically subject to country-of-origin labeling requirements and “MADE IN USA” claims, express and implied, that appear on products and labelling, advertising and promotional materials and other forms of marketing including digital marketing and social media.[4]  In order to make an unqualified claim that a product is “MADE IN USA”, a manufacturer or marketer should have competent and reliable evidence (“a reasonable basis”) to support a claim that the product is “all or virtually all” made in the US.[5] Continue Reading

Some Press is Bad Press: False Light in the Modeling Industry

This was first published in the Beverly Hills Bar Association’s Global Fashion Lawyer.

Appearance is arguably the most important aspect of modeling. Whether a model is practicing poses in the mirror, or sitting in the makeup chair and being prepped for a photoshoot, the essence of a model’s job is to be a canvas, painted and altered to fit the role of the job she books. Even if a model is not altering her appearance for herself, but at the direction of the project’s creative director, presumably the model signed up for the specific gig at her own volition. Continue Reading

NY’s Gendered Pricing Law: Will It Curb the Pink Tax

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 7% higher.[1]  The pink tax thus places a direct cost on individuals who purchase products marketed to women. Continue Reading

To Defer or Not Defer? IRS Issues Guidance Temporarily Delaying the Collection of Social Security Taxes

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.

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A Trade War on Two Fronts: U.S. Considers More Tariffs on European Goods

Opening Salvos: The Proposed Tariffs

On June 26, 2020, the U.S. Trade Representative (USTR) published a notice that it is considering new tariffs on exports such as olives, coffee, beer, gin, and trucks coming into the United States from France, Germany, Spain, and the United Kingdom.[1] The list of potential targets also includes various types of bread, pastries, cakes, and other baked products. That new list of goods may face duties of up to 100%, potentially doubling the price of certain goods [2] The announcement caused European stocks to fall, particularly for shares of beverage companies, luxury goods companies, and truck makers. Continue Reading

No Reason to Blush

*This post originally appeared as an article in the August 2020 edition of Happi Magazine.

Beauty companies face an uptick in alleged false-labeling class actions. Whether the actions are justified or vexatious, one thing is certain: they are expensive to defend. By keeping the following labeling-related litigation trends in mind when considering and reviewing product labels and marketing, beauty companies can, hopefully, avoid becoming a litigation target. Continue Reading

FTC Cracks Down On Deceptive Social Media Campaign By Teami LLC

In April 2018, the Federal Trade Commission (“FTC”) wrote to Florida-based Teami LLC (“Teami”), a Florida-based producer of Teami tea and skincare products, reminding it of the requirement set forth in the FTC’s Endorsement Guides, that any material connections, including compensation, between advertisers and internet end-users need to be disclosed “clearly and conspicuously” to consumers.  The letter noted that endorsers should use unambiguous language and consumers should be able to notice the disclosure easily without having to look for it; and that because consumers viewing posts in their Instagram feeds typically see only the first few lines of a larger post unless they click “more,” endorsers should decide any material connection above the name look.[1]  Continue Reading

Protecting Your Inventory and Getting Paid

This post originally appeared on the Council of Fashion Designers of America website, CFDA.com.

You’ve worked so hard to get your foot in the door with that prized retailer, striving mightily to please them. They’ve finally supported your line and you just shipped them a big order for Fall 2020. But that same retailer has now filed Chapter 11. What can you do to protect your inventory in the bankruptcy proceeding? Should you continue to do business with the retailer during the bankruptcy? And what can you do to avoid these problems in the future with other retailers? This article will briefly address these questions and provide some basic strategies to help guide the designer/manufacturer in these difficult times. Continue Reading

Fashionista’s Guide to Bankruptcy: What Every Designer Needs to Know to be Protected in Times of Economic Uncertainty

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 to have a basic understanding of the bankruptcy process and concepts for fashion businesses, including Chapters 11 and 7, critical vendor status, how to file a claim, and what strategies can be used to sell to an entity once it has filed for bankruptcy. Continue Reading

Sweepstakes or Giveaway? Make Sure Your Advertising Is Clear!

Enter for a chance to win!  Advertising lawyers are forever reminding their clients to be clear that when a promotion is a sweepstakes, messaging needs to be clear that it is a random drawing and not a giveaway.  Recently, fashion brand Draper James reminded us all why that distinction is so important. Continue Reading

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