Recent labor law, workplace safety regulation, and antitrust enforcement developments are creating an increasingly complex regulatory landscape for luxury retail industry employers. Companies must navigate an array of compliance challenges at the state and federal level, including the Occupational Safety and Health Administration’s (OSHA’s) new “union walkaround” rule and evolving employment laws such as Fair Workweek and salary disclosure mandates.

Employers face heightened antitrust scrutiny from agencies such as the US Department of Justice (DOJ) and Federal Trade Commission (FTC) as well as state antitrust regulators and private plaintiffs, and as such should adhere to new expansions of protections and standards under the Providing Urgent Maternal Protections (PUMP) Act. Luxury retail employers, in partnership with legal counsel, should make every effort to mitigate risks in this dynamic environment and ensure they and their employees are informed and well-trained on new OSHA, employment and labor, and antitrust law developments.

OSHA COMPLIANCE AND THE NEW UNION WALKAROUND RULE

A major change in OSHA inspection procedures is the new Worker Walkaround Representative Designation Process, or “union walkaround rule” (see our April 2024 LawFlash), which allows compliance officers to bring third-party representatives for workplace inspections, even at nonunionized sites. This gives union organizers and worker advocacy groups potential access to previously restricted areas of luxury retail stores and manufacturing facilities during OSHA visits. This includes when customers are in the store during operating hours.

Best practices for luxury retail employers to prepare for this change include the following:

• Updating OSHA inspection policies and procedures, including guidance for frontline managers on how to respond if an inspector arrives with a third-party representative
• Considering whether to require search warrants for inspections rather than voluntarily allowing access
• Developing site confidentiality agreements for all visitors to protect trade secrets and sensitive information
• Training managers on how to professionally interact with third-party representatives while protecting company interests
• Reviewing site security and access protocols, particularly for nonpublic areas such as stock rooms and areas where product is being worked on

While legal challenges to this rule are pending, luxury retail employers should still prepare for changes as the rule remains in effect. Having clear policies and well-trained staff can help minimize disruption if inspectors arrive with union representatives or other third parties in tow.

MORE TRANSPARENCY AND ACCOMMODATION: EMPLOYMENT LAW DEVELOPMENTS IN THE LUXURY RETAIL INDUSTRY

Fair Workweek Laws

An increasing number of cities and states are implementing predictive scheduling laws requiring advanced notice of work schedules, limits on schedule changes, and/or additional compensation for last-minute schedule changes.

Employers operating in these jurisdictions should:

• Implement systems to post schedules in advance of the workweek in accordance with the applicable law
• Train managers on posting requirements for available hours, shifts, and schedules; permissible reasons for shift and schedule changes; and any required compensation for such changes
• Where required, update hiring practices to offer additional hours to existing staff before hiring new employees
• Maintain detailed records of schedules, changes, and employee consents

Salary Disclosure Laws

Many states (see our May 2024 (Maryland) and July 2024 (Vermont) LawFlashes) and local jurisdictions are implementing laws that require employers to disclose salary ranges in job postings.

Employers operating in these jurisdictions should:

• Review compensation and recruitment practices
• Develop salary ranges for all positions
• Update job posting templates and procedures to include salary information
• Train HR and hiring managers on compliant practices
• Monitor compliance across all hiring channels (internal, external, online, etc.)

Fair Labor Standards Act Overtime Rule Changes

The Department of Labor has proposed significant increases to minimum salary thresholds for overtime exemptions (see our April 2024 LawFlash). The first increase went into effect on July 1, 2024 and the next increase is scheduled to go into effect on January 1, 2025.

To ensure compliance with the new thresholds, employers should:

• Review current exempt employees to identify those below new thresholds
• Consider costs related to raising salaries or reclassifying to nonexempt status
• Be prepared to explain any classification or compensation changes
• Train newly nonexempt employees and their managers on timekeeping practices

Lactation Accommodation

The PUMP Act expands lactation break requirements. To ensure compliance with the PUMP Act, employers should:

• Identify suitable private spaces for lactation breaks at all locations
• Update policies on break time and compensation practices
• Train managers on lactation accommodation rights and procedures under the PUMP Act and Pregnant Workers Fairness Act (see our January 2023 and April 2024 LawFlashes, respectively)

Noncompete Agreements

The FTC has proposed strict limits on noncompete agreements (see our May and July 2024 LawFlashes). While legal challenges are pending, employers should:

• Review existing noncompete agreements
• Consider alternative means to protect trade secrets and customer relationships
• Prepare to provide some form of notice to employees if the rule takes effect

ANTITRUST SCRUTINY WIDENS FOR LUXURY RETAIL INDUSTRY EMPLOYERS

Antitrust scrutiny of the luxury retail sector is intensifying, with regulators and private litigants focusing on several key areas:

No-Poach and Wage-Fixing Agreements

The DOJ is scrutinizing companies for agreements not to recruit competitors’ employees or fix wages (see our January 2024 LawFlash). Employers should:

• Train HR staff and hiring managers on antitrust risks in labor markets
• Avoid sharing compensation data or discussing hiring practices with competitors
• Implement antitrust compliance programs covering labor issues

Information Sharing

Sharing competitively sensitive information with rivals or other third parties can raise antitrust concerns (see our April 2024 LawFlash). Employers should:

• Reassess participation in trade associations and industry benchmarking to necessary, procompetitive activities
• If engaging in benchmarking, implement safeguards around competitively sensitive data (e.g., using aggregated and historical data, third-party administrators)
• Train employees on antitrust risks of information exchanges with competitors

Merger Review

The FTC has signaled heightened scrutiny of consolidation in the grocery sector (see our May 2024 ML BeneBits post). Chains considering acquisitions should:

• Conduct thorough antitrust risk assessments early in deal planning
• Prepare for extensive document and data requests from regulators
• Consider potential remedies such as store divestitures proactively

Robinson-Patman Act Enforcement

Because regulators are reviving enforcement of this Depression-era price discrimination law (see our April 2024 LawFlash), employers should:

• Review pricing and promotional practices, especially differences between large and small customers
• Analyze justifications for any pricing differentials (cost differences, meeting competition)
• Consider potential Robinson-Patman Act implications of slotting fees and other trade promotion practices
• Assess not only sales practices but also product acquisition practices because liability under the Robinson-Patman Act may extend to buyers as well as sellers

Luxury retail industry employers can sustain a compliant and productive workplace by taking proactive measures including inspection policy reviews, manager and staff training, confidentiality protocol adherence, systematic employee scheduling, transparent compensation practices, and meticulous record-keeping, among others. Legal counsel can help luxury retail industry employers protect their interests and maintain positive relationships with employees and compliance with regulatory bodies and federal and state laws.

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