Welcome to your monthly legal insights on the trends impacting the Retail, Hospitality, and Food & Beverage Industries.
Labor and Employment
Final Rule: Employee or Independent Contractor Classification Under the Fair Labor Standards Act, RIN 1235-AA43
On January 10, 2024, the U.S. Department of Labor published a final rule, effective March 11, 2024, revising the Department’s guidance on how to analyze who is an employee or independent contractor under the Fair Labor Standards Act (FLSA). This final rule rescinds the Independent Contractor Status Under the Fair Labor Standards Act rule (2021 IC Rule), that was published on January 7, 2021 and replaces it with an analysis for determining employee or independent contractor status that is more consistent with the FLSA as interpreted by longstanding judicial precedent. For detailed information on the final rule, visit here.
California Supreme Court Hold That Unmanageable PAGA Claims Cannot Be Dismissed
Guillermo Tello and Monique Eginli authored an article “California Supreme Court Hold That Unmanageable PAGA Claims Cannot Be Dismissed.” The California Supreme Court, on Jan. 18, issued its decision in Estrada v. Royalty Carpet Mills, Inc. (Jan. 18, 2024) S274340 and handed a major blow to California employers who are sued under the Private Attorney General Act (PAGA). In short, the California Supreme Court held that unmanageable PAGA claims cannot be dismissed and in doing so eliminated a significant defense employer-defendants often asserted in defense of these complex PAGA claims. So how are employers now supposed to defend unmanageable PAGA claims?
The DOL has updated its FMLA Forms and Materials and Added New Fact Sheets
Reminder OSHA Form 300A Summary of Work-Related Injuries and Illnesses Due
For employers with more than 10 employees, it is time to file OSHA FORM 300A reporting summary of work-related injuries and illnesses for the prior. For more detail, and to obtain a copy of the form, visit OSHA Forms for Recording Work-Related Injuries and Illnesses.
New Pay Plans for Retailers
Walmart recently announced its plan to give store managers annual stock grants worth up to $20,000. This follows other compensation changes, including increasing the base of store managers and expanding bonus potential. Will other big retailers follow suit?
The EEOC Continues its Outreach Efforts to Educate Workers
The REACH initiative is launched designed to identify more ways to reach underserved communities. The EEOC will hold in person and virtual listening session to identify barriers to reporting discrimination. The first REACH listening session is planned for Las Vegas with local non-profit organizations and labor unions with experience on low-wage earners and workers of color. REACH is part of the EEOC’s Strategic Plan for fiscal years 2022-26.
Pay Transparency Laws are on the Rise
The District of Columbia joins Illinois, California, New York, Colorado, Massachusetts, and Washington with a new pay transparency law. Typically, these laws require that job postings and advertisements include a minimum and maximum pay range for salary or hourly rate. Each state’s law is a little different with some requiring benefit information to be included, a position description, and other information. For information on the new DC law, which is effective June 30, 2024, see here.
International Trade
Ocean Shipping Rates Surge as Red Sea Attacks Continue
Global shipping prices are continuing to rise as Houthi rebels keep up attacks on cargo vessels in and around the Red Sea. The disruptions are at a key point for ships passing through the Suez Canal and are creating ripples across supply chains in Europe and the U.S., delaying shipments and raising transportation costs. Average worldwide costs of shipping a 40-foot container rose 23% in the week through Jan. 18 to $3,777, according to London-based Drewry Shipping Consultants, more than doubling in the past month.
The increases are being felt far beyond the disrupted trade routes that link China with Europe and the U.S. East Coast. Spot-market rates to ship a container from China to Los Angeles rose 38% in the week through Jan. 18 to $3,860. For more information, visit here.
New Trade Case on Imports of Paper Plates from China, Thailand, and Vietnam
Clark Hill’s international trade team authored an article, “New Trade Case on Imports of Paper Plates from China, Thailand, and Vietnam.” New U.S. antidumping duty (“AD”) petitions were filed on Jan. 25 by the American Paper Plate Coalition (“APPC”) against imports of certain paper plates from China, Thailand, and Vietnam. The petitions also seek the imposition of countervailing duties (“CVD”) on imports from China and Vietnam.
The merchandise covered by these petitions consists of paper plates, which may be white, colored, and/or printed, including lamination by any means with images and/or text. Paper plates subject to these petitions may be produced from paper or paperboard of any type, have any caliper or basis weight, have any size, have one or more sections, be fluted or unfluted, and be uncoated or have any surface finish.
Cybersecurity/Privacy
NJ Joins List of States with Comprehensive Privacy Laws
On January 16, New Jersey’s Governor signed into law New Jersey’s new comprehensive privacy law. The law is set to take effect on January 1, 2025, and would require website and online providers to notify customers of the collection and disclosure of personal information to other third parties. The law also allows customers the ability to opt-out of the collection or disclosure of their personal information. Businesses in New Jersey or serving New Jersey consumers should become familiar with this law and its requirements.
California Pushes Online Safety for Children
With the California Age-Appropriate Design Code Act being challenged in court, the California legislature is not waiting for that dispute to be resolved before introducing further bills aimed at protecting children online. The first, the Children’s Data Privacy Act, would amend the existing California Consumer Privacy Act to add further protections for children and the information of children. The second, the Protecting Youth from Social Media Addiction Act is a new law directed at moderating and limiting the use of features and techniques in social media that serve to lure individuals to participate in the media. Businesses that target or collect information from children in California (as well as Connecticut-who has a similar law) should be aware of these laws as well as similar laws being contemplated in Colorado and Virginia and other jurisdictions.
Food and Beverage
New York Wine and Liquor Retailers Push Back Against Wine in Grocery Stores
Wine and spirits retailers in New York are fighting bills that would allow wine sales in grocery stores. “This legislation will hurt small businesses who have been selling wine for nearly a century,” says Mark Grimaldi, owner of The Cellar D’or in Ithaca, New York.
Since Prohibition was repealed in 1933, New York has upheld a beverage alcohol retail tier that permits only independent wine and liquor stores. For more than 90 years, the state has allowed only one retail license per entity and excluded wine and spirits chains or franchises. For more information, visit here.
Bill Introduced to Make Alcohol To-Go Sales Permanent at Colorado Restaurants
A bill is working its way through the legislative session to continue alcohol to-go sales at Colorado restaurants. For more information, click here.
PLCB Accepting Applications for Grants to Reduce Underage and Dangerous Drinking
The Pennsylvania Liquor Control Board is now accepting applications for grants to fund programs that discourage and reduce underage and dangerous drinking and promote a message of responsible alcohol consumption by those of legal drinking age.
Eligible grant applicants include Pennsylvania school districts and institutions of higher education (including technical, trade, and post-secondary establishments), community organizations, municipal police departments, municipal officials/representatives, and nonprofit and for-profit organizations.
The deadline to apply for grants is 5 p.m. Friday, March 15. The grant application link and guidelines for submission are available on the grants page of the PLCB website. To learn more, click here.
Bill to Lower Food-to-Liquor Sales Ratio for Some Bars Passes State Senate
The state Senate has passed legislation that could ease a regulation that’s long been a point of contention for many Virginia bars and restaurants.
Senate Bill 168 would lower the 45 percent food-to-liquor annual sales ratio currently required of businesses that hold mixed beverage restaurant, caterer’s, or limited caterer’s ABC licenses. For more details, click here.
New Tech is Helping California’s Wine Industry Overcome Challenges
Grape growing is California’s second largest crop, with vineyards spread across more than 600,000 acres of the state. Natalie Collins, the president of the California Association of Grape Growers, said the state is estimated to receive around $70 billion a year “in annual economic activity.” However, it’s currently a challenging time to be a winemaker. For more details, click here.
New Jersey Overhauls its Liquor License Laws
New Jersey has updated its liquor licensing laws since Prohibition was repealed. The new law will expand the number of licenses available, support the growing craft brewing and distillery industry, and provide new opportunities for more diverse mom-and-pop establishments.
Real Estate
The Trends Reshaping Retail Real Estate in 2024
The retail real estate landscape underwent various changes in 2023 that will likely be maintained in 2024. It has been impacted by evolving consumer preferences and the supply of quality retail, changing the types of tenants driving demand and the types of centers supplying it. Through various conversations with industry and data experts, a few key trends rose to the top, including wellness as a notable growing tenant, neighborhood centers and streets as popular properties for leasing and investment, and a scarce supply fueling a competitive market. To learn more, click here.
Landlords No Longer Discounting Retail Rent as Vacancy Dips
The days of landlords discounting rent to fill empty storefronts due to the pandemic are long over, according to analysts, and rosy fourth-quarter retail reports highlight why. For more information, click here.
Industry Trends
Three Reasons Supply Chain Visibility is Vital to Retail Resilience
The 2020s have already brought unprecedented upheaval for retail and CPG brands, evident in the massive fluctuations in logistics costs and lead times during the pandemic, the economic pressures affecting buying behaviors, and the rapid evolution of new sales channels. Disruption is the new norm.
Retail supply chains need the flexibility to adapt to any challenge, from more recent global emergencies like the Red Sea crisis, to resource shortages and industrial action. If they don’t, customers will simply go elsewhere. For more information, click here.
Take a Quantum Leap into Intelligent Retail Experiences with AI
2024 and beyond will be about making AI adoption in retail as mainstream as possible and designing the strategies and guardrails around its adoption. Retail leaders are bullish about AI’s role in improving growth and profitability. According to Gartner, AI and machine learning will be among the top game-changing technologies to be implemented in retail by 2026. To learn more, click here.
The ”Revenge Travel” Trend Continues
What started in 2022 and 2023 post-pandemic is continuing, especially for boomers seeking transatlantic destinations, including Southern Europe.
Enterprise Agility, an Emerging Solutions for Retailers
Agile transformation in retail | McKinsey
