July 30, 2018

CPSC asks for responses on a series of questions addressing direct notice and other forms of consumer recall notification

This notice below is directed at those companies who conduct recalls. The CPSC is trying to increase recall effectiveness (versus press releases and media notices which are for the most part not very good at reaching the affected consumers). Of course the best way to do that is to have consumers register with brands or their distributors so that if or when a product is ever recalled they can receive direct notice. The problem of course is ensuring that this data remains current over some uncertain time frame. That is a huge task and its not clear at this point whose job it is to do that. Also there could be lots of added or assumed responsibility on the recalling party to preserve this date for an indefinite period of time and to safeguard it like credit card data. As most of you know in states like California (and a few other states) product registration cannot be required in order to receive a full product warranty. Obviously some huge hurdles here. To comment before September 5, 2018 visit this link.

AGENCY:

U.S. Consumer Product Safety Commission.

ACTION:

Notice of request for information.

SUMMARY:

To advance the concepts discussed during the U.S. Consumer Product Safety Commission's (CPSC) Recall Effectiveness Workshop in 2017, the CPSC announces a Request for Information (RFI) from stakeholders to provide information critical to future work on Recall Effectiveness. CPSC asks for responses on a series of questions addressing direct notice and other forms of customer notice. The information provided will help inform CPSC's efforts to continue improving the effectiveness of recalls.

DATES:

Submit comments by September 5, 2018.

ADDRESSES:

You may submit comments, identified by Docket No. CPSC-2017-0027, by any of the following methods:
Electronic Submissions: Submit electronic comments to the Federal eRulemaking Portal at: www.regulations.gov. Follow the instructions for submitting comments. The Commission does not accept comments submitted by electronic mail (email), except through www.regulations.gov. The Commission encourages you to submit electronic comments by using the Federal eRulemaking Portal, as described above; however, please do not use this method if you are submitting confidential business information or other sensitive information that should not be made public.
Written Submissions: Submit written submissions by mail/hand delivery/courier to: Office of the Secretary, Consumer Product Safety Commission, Room 820, 4330 East West Highway, Bethesda, MD 20814; telephone (301) 504-7923.
Instructions: All submissions received must include the agency name and docket number for this notice. All comments received may be posted without change, including any personal identifiers, contact information, or other personal information provided, to: www.regulations.gov. If you submit confidential business information, trade secret information, or other sensitive or protected information that you do not want to be available to the public, do not submit it electronically, but send it in hard copy to the Office of the Secretary at the address indicated above. See also section III, below.
Docket: For access to the docket to read background documents or comments received, go to: www.regulations.gov, and insert the docket number CPSC-2017-0027, into the “Search” box, and follow the prompts.

FOR FURTHER INFORMATION CONTACT:

Joseph F. Williams, Compliance Officer, the Office of Compliance and Field Operations, U.S. Consumer Product Safety Commission, 4330 East-West Hwy., Bethesda, MD 20814; telephone: 301-504-7585; email: jfwilliams@cpsc.gov.

SUPPLEMENTARY INFORMATION:

I. Background

A. Recall Effectiveness Workshop

On July 25, 2017, the CPSC hosted a Recall Effectiveness Workshop. The goal of the workshop was to explore and develop proactive measures that CPSC and stakeholders can undertake to improve recall effectiveness. Seventy-nine external stakeholders attended the workshop, including various retailers, manufacturers, law firms, consumer interest groups, third party recall contractors and consultants, testing laboratories, and other interested parties. CPSC staff facilitated an open discussion among these participants about ways to increase recall effectiveness and also gathered feedback on how CPSC can potentially improve its recall efforts. Additional details may be found here: https://www.cpsc.gov/​Recall-Effectiveness.

B. Recall Effectiveness Report

Following the workshop, CPSC staff prepared a report, which was released on February 22, 2018. The report stated that the CPSC staff intends to prioritize stakeholders' suggestions to:
  • Collaborate on ways to improve direct notice to consumers; and
  • collaborate with firms to explore how technology can be used to enhance recall response.
The report explained the reason for this focus:
“Direct notice recalls have proven to be the most effective recalls. We intend to work with consumer and industry stakeholders on registration methods or other improvements (e.g., retailer opt-in at checkout, home voice assistants, photo texting, QR codes, and incentives for product registration) to promote direct notice recalls.”
“We will continue to explore how technology can be used to enhance recall response in appropriate cases, including enhancing firms' recall marketing strategies, use of social media, and improved methods for in-store communication. We intend to identify and share examples of future recall marketing strategies that are innovative and/or successful.”

II. Information Requested

The CPSC seeks information on current methods and systems that recalling firms use to assist in providing direct notice to consumers. The CPSC also requests certain information regarding the use of targeted notices to reach consumers who may have purchased a recalled product.

A. Direct Notice

1. What methods are available for directly notifying consumers of recalls (e.g., mail, email, text)?
2. If you use direct notice for recalls, what response rates do you achieve? Do the response rates differ significantly for different recalls? If so, what factors appear to influence the response rates? Do you follow up with additional direct notice if a customer does not respond? How often? For how long?
3. Do other companies or your company use all available direct notice methods during every product recall? If not, why not?
4. Do e-commerce retailers/third party platforms use direct notice capabilities for every recall of products sold through their site/platform? If not, why not?
5. What costs are associated with direct notice? How do costs vary for different forms of notice? What other factors affect cost?
6. What challenges and barriers prevent companies from pursuing or improving direct notice? Please address:
a. Legal barriers
b. Technological challenges
c. Privacy challenges
d. Security challenges
e. Cost challenges
f. Other challenges
7. What technologies exist or are being developed that would assist a recalling company to acquire direct contact information or capabilities to contact purchasers and/or issue direct notice for recalls?
8. What methods do you use to collect direct contact information at the point of sale?
9. Does your attempt to collect direct contact information depend on the item(s) purchased? Is the cost of the item at all relevant?
10. Have you worked with a third-party entity (e.g., credit card or payment processing companies, product registries, data collection platforms, online retailers) to identify or contact consumers who previously purchased a product subject to a recall? If so, how, and with what types of companies did you work?
11. For retailers that have information on their customers (e.g., retail credit/debit cards, loyalty program, membership registration), can such information be accessed through purchase data to provide direct notice?
12. What would make direct notice more effective (e.g., notice type, number of touches)?
13. How can the CPSC help facilitate direct notice to consumers?
14. What can we learn from marketing efforts (e.g., needed resources, personnel qualifications, channels of communication, evaluating messaging effectiveness, etc.) to better reach consumers for recall purposes?

B. Product Registration

1. What product registration methods are used today to collect consumer information and track purchased/registered products?
2. Why do companies offer product registration? Are product registration programs due to mandatory requirements by CPSC or other agencies, or for other reasons?
3. What are participation rates in product registration? Do you see significant differences in the registration rates for different types of products?
4. What type of information is collected during product registration?
5. Is product registration more or less successful if marketing information is not collected at the same time? Why?
6. What methods are in use or are being developed to increase responses to product registration (e.g., warranties, incentives, voice assistant technology)?
7. When does the personal information collected for product registration get used for marketing purposes?
a. Are opt-in/opt-out choices provided to consumers for marketing? Describe.
8. What technologies exist or are being developed to advance product registration?
9. What would make product registration more effective?
10. How can the CPSC help facilitate or improve product registration rates?
11. Has the ability to register a product online or electronically had an effect on the volume of consumer response to product registration?

C. Targeted Notice

A targeted notice is a notice aimed at a particular group of likely affected consumers, but not at a known purchaser or consumer like direct notice (e.g., targeted search engine ads, paid social media, micro marketing, such as internet radio and targeted use of voice assistant technologies).
1. Have you used any of the targeted methods listed above or others to reach consumers? What success have you seen?
2. Do companies use the information previously collected to assist in issuing targeted recall notices when announcing recalls?
3. What costs are generally associated with targeted methods, including targeted search engine ads, paid social media, micro marketing, such as internet radio, and voice assistant technologies?
4. What challenges and barriers prevent companies from pursuing targeted notices for recalls? Please address:
a. Legal barriers
b. Technological challenges
c. Privacy challenges
d. Security challenges
e. Cost challenges
f. Other challenges
5. What technologies exist or are being developed that can improve the effectiveness of targeted notice?
6. How can the CPSC help facilitate new or improved targeted recall notice campaigns?
7. Are there other forms of recall notice that are worth exploring for more discussion?

D. For Consumers and Other Stakeholders

1. Would you be interested in working directly with the CPSC to explore best practices for implementing product registration, improving current direct notice capabilities, or developing targeted notices?
2. Are there data showing what forms, types, and frequency of messaging consumers are most likely to respond to in direct and targeted notices?
3. How can companies incentivize consumers to register their products or to provide the information needed for direct notice in the event of a recall?
4. What concerns do consumers have regarding the use of their personal information for recall notification purposes? What can firms do to overcome these concerns?

III. Confidentiality

All data submitted is subject to Section 6 of the Consumer Product Safety Act (15 U.S.C. Section 2055) and may be considered confidential, except to the extent otherwise provided by law. Please identify any portion of your submission that you believe is confidential.
Alberta E. Mills,
Secretary, Consumer Product Safety Commission.
[FR Doc. 2018-13388 Filed 6-21-18; 8:45 am]

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2013 Conditions of Use

February 9, 2018

In what may be the first "gig economy" case to be fully decided on the merits a California federal court finds that an independent contractor is not an employee [ Lawson v Grubhub Inc. Case No.15-cv-05128-JSC ]

The case involved Grubhub in a labor lawsuit filed by one of its former drivers (plaintiff Lawson) In a long and detailed court opinion released February 8, 2018 by US Magistrate Judge Jacqueline Scott Corley, who ruled: "the Court [found] that Grubhub [had] satisfied its burden of showing that Mr. Lawson was properly classified as an independent contractor." The plaintiff Lawson was an aspiring actor who made ends meet with various day jobs and sued Grubhub in 2015. He argued that he should have been classified as an employee, not a contractor. The case was originally filed as a proposed class-action lawsuit, but that class action status was never allowed by the court. It is important to note that this case was a judge (court) trial not a jury trial and was NOT a motion for summary judgment. Closing arguments in this trial were heard in October 2017.

I highly recommend reading the full decision here as it's a good road map to follow in making the independent contractor employee determination. However part of why it's important not to read too much into individual cases was the judges finding that the Plaintiff was fundamentally "not credible.". Lawson, by his own admission, "gamed the Grubhub driver app". This credibility finding may have hurt the plaintiff in many ways.
On the other hand the judge ruled "Grubhub did control some aspects of Mr. Lawson's work," by "determin[ing] the rates Mr. Lawson would be paid and the fee customers would pay for delivery services. While the Agreement states that a driver may negotiate his own rate, this right is hypothetical rather than real. The Court finds that Mr. Lawson could not negotiate his pay in any meaningful way and therefore this fact weighs in favor of an employment relationship."

This is a good example of the uncertainty involved in trying to determine employment status which is governed in California by the multi-factor test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations, 48 Cal.3d 341 (1989). 

The Grubhub case likely has limited precedential value as each employee vs independent contractor determination relies heavily on the specific facts unique to the relationship between the worker and the employer/company. This is what makes these cases so difficult. They literally must all be decided by a trier of fact making the process very expensive and very uncertain for any employer who quite frankly has the deck stacked against it as well as large financial disincentives for litigating these matters.

Plaintiff's counsel did indicate there would be an appeal and was surprised that the federal court did not wait for the California Supreme Court in its anticipated decision in Dynamex Operations West, Inc. v. Superior Court. There the California Supreme Court has agreed to review a Court of Appeal decision that expanded the definition of “employee.” The lower Court of Appeal in Dynamex adopted the much-broader definition of “employ,” meaning “to engage, suffer or permit to work.” expanding the meaning of the term “employee,” to nearly every labor relationship a company would be likely to have.

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2013 Conditions of Use

August 17, 2017

California Proposition 65 regulations amended to require more specificity on warnings

On August 30, 2016, (yes a year ago) the California Office of Administrative Law approved the adoption of amendments to Article 6, "Clear and Reasonable Warnings", of the California Code of Regulations.  This was a regulatory "repeal and replace" and not a legislative one so as a result it was further off the news "radar". The new regulations provide, among other things, methods of transmission and content of warnings deemed to be compliant with the Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop. 65). Prop 65 regulations are promulgated by the Office of Environmental Health Hazard Assessment (OEHHA) which also maintains the Prop 65 chemical list and is one of 6 agencies under the California Environmental Protection Agency (CalEPA).

Most companies already know that any consumer product sold in California must comply with Proposition 65, meaning that their products sold in California cannot contain harmful amounts of the chemicals on its notorious 800 chemical list (and growing). Its important to keep in mind that this list continues to grow and is much more extensive than the EU REACH law/regulation (which currently lists only about 200 chemicals). Its also much more extensive that the US Consumer Product Safety Commission's (CPSC) regulations which are mostly confined to lead and Phthalates. There has been quite a bit of publicity surrounding Monsanto's futile legal efforts to keep RoundUp weed killer off the Prop 65 list.

The difficulty with the new warning requirement (which does not go into effect until August 30, 2018) is that if you test and if you find something on the list in your product you must now have specific "safe harbor" warnings that include any of the 800 chemicals on the list that might be in your product in harmful amounts. Under the old abolished regulations you could utilize a "safe harbor" (provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule) warning that did not need to specify which of the 800 chemicals on the list might exist in the product. Now of course one can debate the merits of warnings generally, especially the efficacy of one that lists the offending complex chemical name over one that does not, but we don't have enough space on this post to have that debate. The point is this is now the current state of the law and my advice is to try to steer clear of Prop. 65 suits (just like ADA suits and host of others). Also these warnings cannot exist solely in user's manuals unless you are a vehicle manufacturer who got special dispensation under the new regulations (but even they still must have stand alone warnings)

The other interesting issue is that if your company was part of a settlement of a Prop 65 suit. Under the new law a company that is a party to a court-ordered settlement or final judgment establishing a warning method or content, is deemed to be providing a “clear and reasonable” warning for that exposure for purposes of the new law, if the warning fully complies with the order or judgment. This covers a few companies in the bicycle arena. It's not known how many total companies are exempted by this as that would depend a lot on the terms of the settlement and (I assume) the chemicals ("the exposure") involved in that particular suit.

Clearly there is going to be lots of work ahead in the next year for all consumer product manufacturers, brands, distributors, resellers, and retailers (on line and off). You can be sure Amazon, Walmart and all the big retailers are well aware of these issues and they will surely come up in contract negotiations with sellers to most large retailers.

Law Offices of Steven W. Hansen | www.swhlaw.com | 562 866 6228 © Copyright 1996-2013 Conditions of Use