Corporate Counsel - Sample Issue

different areas so they can help work with counsel across multiple different companies,” she says.

There are several cases for the industry to address. Plaintiffs are going after retailers for violating the Telephone Consumer Protection Act if they repeatedly contact a consumer on a phone number that previously belonged to someone else. In an unrelated series of suits, plaintiffs firms are bringing cases against retailers under New Jersey’s Truth-in-Consumer Contract, Warranty and Notice Act, citing violations in company terms and conditions that can lead to costly damages.

Lawyers who specialize in intellectual property, meanwhile, will be tracking the fallout from a recent U.S. Supreme Court case, Star Athletica v. Varsity Brands, which examined whether certain designs, including zigzags and stripes, used on cheerleading uniforms could be copyrighted. The U.S. Supreme Court ruled in March that the designs are largely eligible for copyright protection. IP specialists will now be watching to see whether the ruling makes it more difficult for knock-off manufacturers to sell their products.

To investigate the decision’s impact, attorneys can “look to the filings in the copyright office to see if fashion brands are increasing the number of filings related to the designs embodied in their clothing products and the filings in federal court to see if there’s an uptick in copyright claims brought against parties responsible for selling knock-off clothing products,” says Howard Hogan, a Washington, D.C.-based partner at Gibson, Dunn & Crutcher and co-chair of the firm’s fashion, retail and consumer products group.

It’s also clear that more retailers
likely will have to tap outside counsel
to assist with bankruptcy cases. While
some companies may re-emerge from
bankruptcy with a smaller physical
presence and a greater focus on online
sales, others may disappear altogether,
as chains like Sports Authority and The
Limited have done.

“Overall, you’re going to see bankruptcies continue and you’re going to see a contraction in the industry,” says Brian Shaw, a member at Chicago bankruptcy boutique Shaw Fishman Glantz & Tow-bin. “That contraction is going to include a decrease in the number of players and a decrease in the number of physical outposts for the players that survive this sort of culling.”

THE REGULATORY FRAMEWORK

David French, senior vice president for government relations at the National Retail Federation (NRF), a trade association, says that one of the biggest policy issues facing retailers at the moment is tax reform—and the possible passage of a border adjustment tax, which would impose an additional tax on imported goods. The provision is backed by some leading House Republicans, though it’s not yet clear whether the White House would ultimately support such a measure.

The retail trade groups also are moni-
toring several Obama-era regulations
that they hope the Trump administra-
tion will reverse. One of the most critical
is the Department of Labor’s overtime
rule, finalized in May 2016, which would
expand the number of workers required to
be paid overtime.

U.S. District Judge Amos Mazzant of the Eastern District of Texas granted a preliminary injunction against the rule last November—just days before it was set to go into effect on Dec. 1—siding with critics who said that the rule overstepped the agency’s authority. Dozens of business associations, including the NRF, and 21 states filed the suit in September.

“We expect that we will have a permanent injunction against the Obama administration’s overtime rule and we’ll be working with the Department of Labor on next steps for this rule in the future,” French says.

Trump’s Labor Secretary Alexander Acosta, approved by the Senate in late April, said at his confirmation hearing a month earlier that he had concerns about the rule, though he expressed some support for raising the salary threshold for overtime pay.

Experts say that retailers are also contending with what they view as onerous rules when it comes to treating certain products as hazardous waste, especially in California.

“With respect to waste handling, retailers are now facing regulatory pressure and investigations using laws that were really intended to go after chemical manufacturers and others who handle really toxic substances,” says Morgan, Lewis & Bockius partner Gregory Parks, who is based in Philadelphia and serves as co-chair of the firm’s retail practice.

For major retailers like Wal-Mart, meeting heightened requirements for the disposal of baby shampoo and lip balm can be costly and time-consuming, Jorgensen says. “If you think about the volume of Wal-Mart,” he says, “how many bottles of shampoo we sell and how many lip balms we sell and incinerating all the ones that have something go wrong with them—it’s a major issue for us and causes a lot of difficulty.”