Hunton & Williams Retail-CPG RADAR€¦ · DOL Overtime Rule December 1, 2016 The DOL’s final...

Hunton & Williams Retail-CPG RADARAbout our Retail Industry Practice Group

The retail industry practice group at Hunton & Williams delivers objective-driven counsel in the areas of labor and employment, commercial litigation, e-commerce, privacy and data security, advertising and marketing, M&A, outsourcing, intellectual property, real estate, international trade, antitrust, employee benefits and corporate governance. Our team is composed of more than 100 attorneys who represent retailers in the Fortune 500® and virtually every retail sector.

[Read our 2016 Retail Industry Year in Review](https://www.hunton.com/files/Publication/6937780a-4835-4f6c-8e24-204bd9300d51/Presentation/PublicationAttachment/2fc8ef1d-39e3-486f-8dbe-2323ffa0fe38/Retail-YIR-2016.pdf)

ADVERTISING / CONSUMER PROTECTION

Pending FDA Regulations re “natural” labeling on food productsApril 15, 2016

The FDA in November 2015 announced that it would begin taking public comments on how “natural” is and should be used on food labels, the first time the agency’s done so since the 1990s. The public comment period closed on May 10, 2016, with the FDA allegedly receiving roughly 7,500 comments. View submitted comments in docket folder FDA-2014-N-1207 on Regulations.gov. The FDA’s forthcoming guidance may shed light on the issues.

Contact:[Phyllis Marcus]( https://www.hunton.com/en/people/phyllis-marcus.html): Counsel, Washington, DC

+1 202 955 1810 | [[email protected]](mailto:[email protected])

ADVERTISING / CONSUMER PROTECTION

CFPB Rule on Class Action WaiversMay 5, 2016

On May 5, 2016, the CFPB issued its proposed rule prohibiting class action waiver clauses in consumer finance contracts. The podcast discusses the genesis of the rule, the requirements of the rule, the status of the rule, and what companies are doing to prepare. The new rule, if finalized, will lead to an increase in class actions against providers of consumer financial products and services, including credit card providers, student loan companies, and other consumer finance companies.

Podcasts and Client Alert:Podcasts: [Part 1](https://www.hunton.com/Media/CFPB/CFPB-Part1.m4a), [Part 2](https://www.hunton.com/Media/CFPB/CFPB-Part2.m4a) and [Part 3](https://www.hunton.com/Media/CFPB/CFPB-Part3.m4a)

Client Alert: [CFPB Rule Would Prohibit Arbitration Clauses in Many Consumer Financial Contracts](https://www.hunton.com/images/content/1/8/v2/1893/cfpb-rule-would-prohibit-

arbitration-clauses-in-many-consumer-fi.pdf)

Contact:[Eric Hail](https://www.hunton.com/en/people/eric-hail.html): Partner, Dallas


What Should I Do Next?Call Eric Hail for additional information.

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SUPPLY CHAIN / SOURCING

Lautenberg Act ImplementationJuly 13, 2016

The Lautenberg Act amends the Toxic Substance Control Act, exposing businesses that manufacture, process, distribute, use or dispose of certain chemical substances. The act poses a very real risk to the stability of the current retail supply chain, but also provides retail product manufacturers, distributors and sellers the opportunity to evaluate the chemicals used in their products, opt for safer and more sustainable alternatives if EPA classifies them as hazardous, and more effectively mitigate long-term costs and risks.

Blog Post:[Major Implications for Retail Industry Following Overhaul of Toxic Substance Control Act](https://www.huntonretailindustryblog.com/2016/07/articles/environmental/major-implications-for-retail-industry-following-overhaul-of-toxic-substance-control-act/)

Contacts:[Lori Elliott Jarvis]( https://www.hunton.com/lori_jarvis/): Partner, Richmond

+1 804 788 8639| [[email protected]](mailto:[email protected])

[Elizabeth Reese]( https://www.hunton.com/elizabeth_reese/): Associate, Richmond


DISPUTES

Bristol-Myers Squibb’s Cert PetitionOctober 7, 2016

(petition for writ of certiorari filed)

In Daimler AG v. Bauman, 571 U.S. __ (2014), the Supreme Court held that courts can only exercise general jurisdiction over defendants that are essentially “at home” in the forum state. That ruling significantly limited plaintiffs’ choice of forum (and curtailed forum shopping). But the California Supreme Court, along with courts in some other states, has circumvented Daimler by holding that courts can exercise specific jurisdiction even where the plaintiff’s claims arising from a product have no connection to the forum state, as long as the defendant sells the same product in the forum state. That would vitiate the protections offered by Daimler. In its petition, Bristol-Myers Squibb asks the Supreme Court to vacate the California Supreme Court’s ruling and limit the application of specific jurisdiction.

[View Related Briefs](http://www.scotusblog.com/case-files/cases/bristol-myers-squibb-co-v-superior-court-of-california-san-francisco-county/)

Contact:[Tom Waskom](https://www.hunton.com/en/people/thomas-waskom.html): Counsel, Richmond


Bristol-Myers Squibb’s Cert Petition

INSURANCE

Cyber InsuranceNovember 10, 2016

of 14Hunton & Williams Retail-CPG RADAR

Retailer Tesco Plc’s banking branch suffered the loss of £2.5 million (approximately $3 million) from 9,000 customer bank accounts in what cyber experts said was the first mass hacking of accounts at a western bank.

The reported loss believed to have occurred through the bank’s online banking system. The loss serves as a strong reminder that cyber-related losses are a real threat to retailers and other industries. According to reports, Tesco Bank spent £500 million (approximately $618 million) building up its technology platform over the past seven years. Even that very substantial expenditure was not enough, however, to prevent the recent hack, further illustrating the need for robust cyber insurance as a component of any comprehensive cyber protection program.

Blog post:[Tesco Bank Hack Illustrates The Need For Robust Cyber Insurance](https://www.huntoninsurancerecoveryblog.com/2016/11/articles/cyber/tesco-bank-hack-illustrates-the-need-for-robust-cyber-insurance/)

Contact:[Michael Levine](https://www.hunton.com/en/people/michael-levine.html): Partner, Washington, DC


What Should I Do Next?Retailers and other businesses should determine what, if any, “cyber” coverage may be available under their insurance portfolio. More and more, traditional (legacy) policies are being modified to specifically exclude cyber-related liabilities, making it necessary for policyholders to obtain cyber-specific coverages. However, even those cyber coverages are limited and varied in scope from one company to the next. A thorough review of both legacy and cyber coverages by an experienced insurance coverage lawyer is recommended.

DISPUTES

Bristol-Myers Squibb’s Cert PetitionNovember 10, 2016

(amicus curiae briefs filed)







INTELLECTUAL PROPERTY

Covered Business Method Review is Scaled BackNovember 21, 2016

On November 21, 2016, the Federal Circuit issued its Unwired Planet v. Google decision, which defined more narrowly the types of patents eligible for Covered Business Method review at the US Patent and Trademark Office (USPTO).

Covered Business Method (CBM) review at the US Patent and Trademark Office can be an important option for retailers in patent litigation. Among other things, it allows the defendant to allege that the patent claims only an “abstract idea” and is therefore invalid under 35 USC 101. The Federal Circuit recently issued the Unwired Planet v. Google decision whichtook a narrower view of the types of patents eligible for CBM review. This may impact retailersseeking to invalidate patents asserted against them.

Contact:[Tyler Maddry](https://www.hunton.com/en/people/tyler-maddry.html): Partner, Washington, DC


LABOR / EMPLOYMENT / OSHA

DOL Overtime RuleDecember 1, 2016

The DOL’s final rule requiring that exempt employees receive salary increases to $913 per week was set to take effect December 1, 2016. That rule was preliminarily enjoined on November 22, 2016. Those employers who already implemented changes have tough choices to make – maintain the changes even though not currently required or retract the changes and face potential employee relations issues? Those employers who had not already implemented changes should not assume that the rule is completely dead and should therefore keep their plans at the ready. While the litigation over the rule is winding itself through the appeals process, President-Elect Trump will take office and may ultimately have the last word on the rule.

Collateral Materials:[DOL Overtime Rule Preliminarily Enjoined; No Employer Action Required By December 1st](https://www.huntonlaborblog.com/2016/11/articles/employment-policies/dol-overtime-rule-preliminarily-enjoined-no-employer-action-required-december-1st/)

[Trump faces tough decision on overtime rule](http://thehill.com/regulation/307458-trump-faces-tough-decision-on-overtime-rule)

[This is What You Need to Do in the Wake of the Overtime Injunction](https://www.entrepreneur.com/article/285954)

Contact:[Ryan Glasgow](https://www.hunton.com/en/people/ryan-glasgow.html): Partner, Richmond



OSHA Anti-Retaliation Restrictions on Safety Incentive Programs and Post-Accident Drug TestingDecember 1, 2016


OSHA published a final rule amending the regulation requiring Recording and Reporting Occupational Injuries and Illnesses. This rule contains, through enforcement guidance, restrictions on safety incentive programs and post-accident drug testing. Legal challenges to these anti-retaliation provisions were unsuccessful and the obligations went into effect on December 1, 2016.

Collateral Materials:[Occupational Safety and Health Administration](https://www.osha.gov/recordkeeping/modernization_guidance.html)

Contact:[Susan Wiltsie](https://www.hunton.com/en/people/susan-wiltsie.html): Partner, Washington, DC


INTELLECTUAL PROPERTY

Patent Exhaustion at the Supreme CourtDecember 2, 2016

The Supreme Court granted cert December 2, 2016 for the Lexmark v. Impression Products case

Patent exhaustion, also known as the “first sale” doctrine, governs whether a patent holder can impose use restrictions on the products it sells. It also relates to whether sales overseas affect US patent enforcement. The Supreme Court will consider whether the Federal Circuit gave too much influence to patent holders by allowing post-sale use restrictions and holding that sales overseas do not exhaust US patents absent an express or implied license. The ability of patent holders to enforce post-sale restrictions (e.g., “single use only” or geographical restrictions) may be affected.

Contact:[Tyler Maddry](https://www.hunton.com/en/people/tyler-maddry.html): Partner, Washington, DC


DISPUTES

Bristol-Myers Squibb’s Cert PetitionDecember 9, 2016

(response to petition for writ due)








TSCA ReformDecember 22, 2016

Initial risk evaluation of 10 substances.



Contacts:[Lori Elliott Jarvis]( https://www.hunton.com/en/people/lori-jarvis.html): Partner, Richmond


[Elizabeth Reese]( https://www.hunton.com/en/people/elizabeth-reese.html): Associate, Richmond



2016 Retail Industry YIRDecember 31, 2016

We are working in exciting and turbulent times for the retail industry. After a lag during the first half of the year, merger and acquisition activity has taken off. Venture-capital investments in the retail sector are at a near-record pace, and after the 2016 US election, the new administration is expected to focus on job growth, which will squarely impact the retail industry.

[Download our 2016 Retail Industry Year in Review](https://www.hunton.com/images/content/2/7/v2/27538/Retail-YIR-2016.pdf)

INSURANCE

Recall InsuranceJanuary 11, 2017

The Third Circuit Court of Appeal affirmed the rescission of an accidental contamination and government recall insurance policy issued to the H.J. Heinz Company after Heinz sought $25 million from its insurer for its business interruption losses sustained due to lead in its baby cereal. The district court based the rescission on findings that Heinz materially misrepresented its claim history when it purchased the policy.

Blog post and decision available here:


[Third Circuit Pours Salt In The Wound, Holds Heinz Policy Void Due To Application Misrepresentations](https://www.huntoninsurancerecoveryblog.com/2017/01/articles/first-party-property/third-circuit-pours-salt-in-the-wound-holds-heinz-policy-void-due-to-application-misrepresentations/)

What Should I Do Next?Companies need to make sure they understand their exposures from potential recalls and related changes to product lines, and confirm that the coverage purchased comports with company expectations. In addition, companies should be diligent during the renewal stage to ensure that the insurer is provided accurate and up-to-date information in the application to minimize the risk of the insurer seeking to rescind the policy. Contact members of the firm’s Insurance Coverage team for more information and assistance.

Contact:[Syed Ahmad](https://www.hunton.com/en/people/syed-ahmad.html): Partner, Washington, DC


[Jenn White](https://www.hunton.com/en/people/jennifer-white.html): Associate, Washington, DC



OSHA Statute of LimitationsJanuary 18, 2017

Enter story info here

The OSH Act has a six month statute of limitations. On January 18, 2017, new OSHA regulations went into effect changing the statute of limitations for recordkeeping violations to five years. That rule was entitled “Clarification of Employer’s Continuing Obligation to Make and Maintain Accurate Records of Each Recordable Injury and Illness.” It was designed to overturn, by regulation, two DC Court of Appeals cases (“Volks I” and “Volks II”) which held that the statute of limitations for recordkeeping violations could not be stretched to five years under a “continuing violation” theory. Congress applied the Congressional Review Act to overturn the new rule. The House passed the bill (H.J.Res. 83) on March 1. The Senate passed it on March 27. President Trump now has signed this bill into law and the OSHA statute of limitations has returned to six months for all purposes.

Contact:[Susan Wiltsie](https://www.hunton.com/en/people/susan-wiltsie.html): Partner, Washington, DC


What Should I Do Next?All employers should continue to be vigilant about maintaining accurate OSHA records. However, employers no longer are at risk of citations for recordkeeping violations more than six months old.

DISPUTES

Circuit Split on Standing in Data Breach Class ActionsMarch 3, 2017

Applying Clapper v. Amnesty International USA, 133 S. Ct. 1138 (2013), which requires that any alleged “future harm” be “certainly impending” and that “allegations of possible future


injury are not sufficient” the circuits are split regarding whether alleged future injuries satisfy Article III. Previously, in 2012, the Supreme Court denied a petition for writ of certiorari to address the question of standing in data breach cases, Reilly v. Ceridian Corp., 664 F.3d 38 (3d Cir. 2011), cert. denied, 132 S. Ct. 2395 (2012).

On September 17, 2015 the Seventh Circuit Court of Appeals in Remijas v. Neiman Marcus Group, LLC, No. 14-3122 (7th Cir. July 20, 2015) denied a retailer’s petition for rehearing en banc of a three-judge panel opinion holding that plaintiffs whose credit card information was stolen in a data breach had standing to sue under Article III of the United States Constitution based on alleged fear of future identity theft. See also Lewert v. P.F. Chang’s China Bistro, Inc., 819 F.3d 963 (7th Cir. 2016)( held that plaintiffs have standing where hackers have accessed their sensitive private information). Similarly, in Galaria et al. v. Nationwide Mutual Insurance Co., No. 15-3386/3387, 2016 U.S. App. LEXIS 16840(6th Cir. Sep. 12, 2016).,the Sixth Circuit reversed a trial court and found standing based onclaims of plaintiffs being exposed to “a substantial risk of harm” and have “incurred mitigationcosts.”

To the contrary, the Third Circuit in Reilly v. Ceridian Corp., 664 F.3d 38 (3d Cir. 2011), dismissed breach claims for lack of standing when plaintiffs alleged various claims related to increased risk of identity theft after an unknown hacker infiltrated Ceridian’s computer system and potentially gained access to the personal and financial information of 1,900 companies and 27,000 employees.

Beck v. McDonald, 848 F.3d 262 (4th Cir. 2017) (Affirmed the district court’s order dismissing the plaintiffs’ putative class for lack of Article III Standing. The court recognized the circuit split between its sister courts, explaining that the Sixth, Seventh, and Ninth Circuits recognize that plaintiffs can establish such an injury in fact at the pleading stage, but that the First and Third Circuits have rejected mere allegations of future identity theft.)

Contact:[Corey Lee](https://www.hunton.com/en/people/corey-lee.html): Partner, Miami



Expanded Joint Employer Liability for Wage/Hour ViolationsMarch 23, 2017

The Fourth Circuit Court of Appeals recently issued a new and incredibly broad joint employment standard under the Fair Labor Standards Act, the federal law that obligates employers to pay overtime and minimum wage to non-exempt employees. Under the Fourth Circuit’s new test, two business entities engaged jointly in a project are presumed to be joint employers of each other’s employees unless the two entities are “completely disassociated” from one another vis-à-vis the terms and conditions of the employees’ employment. Among other arrangements, the new test presents a grave threat to the franchising model.

Blog Post:[4th Circuit Joint Employer Test Is Incredibly Broad ](https://www.huntonlaborblog.com/2017/03/articles/nlrb/4th-circuit-joint-employer-test-incredibly-broad/)

Contact:[Ryan Glasgow](https://www.hunton.com/en/people/ryan-glasgow.html): Partner, Richmond


What Should I Do Next?Business entities who rely on third party service providers and/or the franchise model must take steps to increase the likelihood that they are “completely disassociated” from their service providers/franchisees. If such steps are impractical (and many times they are), entities should contractually obligate the service provider/franchisee to comply with all wage and hour


laws and require that the service provider/franchisee provide indemnification for violations of those laws and/or for violations premised on a joint employer finding.

COMPETITION / ANTITRUST

Delrahim Nominated for Antitrust DivisionMarch 27, 2017

President Trump has announced his intention to nominate Makan Delrahim as the Assistant Attorney General in charge of the DOJ’s Antitrust Division.

[Click here for the White House Press Release](https://www.whitehouse.gov/the-press-office/2017/03/27/president-donald-j-trump-announces-intent-nominate-makan-delrahim)

Contact:[Amanda Wait](https://www.hunton.com/en/people/amanda-wait.html): Partner, Washington, DC


What Should I Do Next?Stay tuned! Senate confirmation is pending. We will update this tracker once Mr. Delrahim is confirmed.

PRIVACY / SECURITY / TECHNOLOGY

China’s New Cybersecurity LawJune 1, 2017

China’s new Cybersecurity Law will impose new restrictions on flows of personal and critical information from operators of key information infrastructure, and will become effective in June 2017. Under the new law, critical network products and services purchased by operators of key information infrastructure will be subject to a security evaluation if they may affect national security. Key aspects of the new law include data localization, a potential local technology procurement requirement, the handling of personal information, cybersecurity compliance requirements and an obligation to support government law enforcement and investigative agencies.

Blog posts:[China Publishes Draft Measures for Security Review of Network Products and Services](https://www.huntonprivacyblog.com/2017/02/16/china-publishes-draft-measures-security-review-network-products-services/)

[Final Cybersecurity Law Enacted in China](https://www.huntonprivacyblog.com/2016/11/08/final-cybersecurity-law-enacted-china/)

[China’s Cybersecurity Law Undergoes Third Reading](https://www.huntonprivacyblog.com/2016/11/02/chinas-cybersecurity-law-undergoes-third-reading/)

Event:[March 7 Webinar on China’s New Cybersecurity Law](https://www.hunton.com/en/insights/chinas-new-cybersecurity-law.html)

What Should I Do Next?Companies need to prepare for the implementing rules and regulations, and they should start now to understand what enterprises would fall within the key categories of ‘operators of key information infrastructure’ and ‘network operators.’ Companies also should consider


undertaking data mapping exercises, under which they identify what information they have flowing into and out of China, and what information flows may be isolated from others.

Contact:[Bing Maisog](https://www.hunton.com/en/people/manuel-maisog.html): Partner, Beijing



First Annual Review of Privacy ShieldJuly 1, 2017

The Shield was formally approved by the European Commission on July 12, 2016 and replaced the Safe Harbor as a mechanism in support of cross-border data transfers from the EU to the U.S. The Article 29 Working Party in the EU has expressed some skepticism about the Shield, and will raise its concerns during the first annual review meeting to discuss the Shield in July 2017.

Blog Posts:[European Commission Adopts Privacy Shield](https://www.huntonprivacyblog.com/2016/07/12/european-commission-adopts-privacy-shield)

[EU Regulators Will Not Challenge Adequacy of Privacy Shield for at Least One Year](https://www.huntonprivacyblog.com/2016/07/26/eu-regulators-will-not-challenge-adequacy-of-privacy-shield-for-at-least-one-year)

Contact:[Aaron Simpson](https://www.hunton.com/en/people/aaron-simpson.html): Partner, London

+44 (0) 20 7220 5612| [[email protected]](mailto:[email protected])


TSCA ReformJuly 1, 2017

Final rule-making re: risk evaluation; Science Advisory Committee on Chemicals established.



Contacts:[Lori Elliott Jarvis]( https://www.hunton.com/en/people/lori-jarvis.html): Partner, Richmond


[Elizabeth Reese]( https://www.hunton.com/en/people/elizabeth-reese.html): Associate, Richmond




Sexual Orientation Discrimination Claims Under Title VIIJuly 3, 2017

In a landmark ruling on April 4, 2017, the United States Court of Appeals for the Seventh Circuit, sitting en banc, became the first federal appellate court to officially recognize a discrimination claim under Title VII based solely on the plaintiff’s sexual orientation. See Hively v. Ivy Tech Community College of Indiana, Case No. 15-1720 (7th Cir. Apr. 4, 2017). The Seventh Circuit’s decision comes on the heels of two other cases from the Second and Eleventh Circuit Courts of Appeals. See Evan v. Georgia Reg’l Hosp., No. 15-15234, 2017 WL 943925 (11th Cir. Mar. 10, 2017); Christiansen v. Omnicom Group, Inc., No. 16-748 (2d Cir. Mar. 27, 2017). It remains to be seen whether these decisions will be appealed to the full court or whether any decision will be appealed to the United States Supreme Court.

Blog Post:[Circuit Courts Reevaluate Sexual Orientation Discrimination Claims Under Title VII](https://www.huntonlaborblog.com/2017/04/articles/title-vii/circuit-courts-reevaluate-sexual-orientation-discrimination-claims-title-vii/)

Contact:[Kurt Larkin](https://www.hunton.com/en/people/kurt-larkin.html): Partner, Richmond


[Ryan Glasgow](https://www.hunton.com/en/people/ryan-glasgow.html): Partner, Richmond


[Tyler Laughinghouse](https://www.hunton.com/en/people/tyler-laughinghouse.html): Associate, Richmond


What Should I Do Next?The legal landscape regarding workplace protections for LGBT employees is evolving rapidly. Retailers should keep an eye on key case developments to ensure that they update their EEO policies and practices to protect against sexual orientation discrimination. Retailers should take immediate action in the Seventh Circuit and keep abreast of developments in other Circuits. The Supreme Court is likely to ultimately decide this issue.

CORPORATE / SECURITIES / M&A / TREASURY / RESTRUCTURING

Sustainability and Corporate Clean PowerSeptember 17, 2017

Climate Week NYC, September 2017

Based on a number of factors (including shareholder pressure, corporate responsibility initiatives, declining renewable energy equipment prices, etc.) corporate entities (retailers, manufacturers and technology companies) are entering the renewable energy arena for the first time or, in some cases, bolstering their current positions. Although this creates a number of new opportunities (e.g., positive publicity and possible tax benefits and fixed, or lower, electricity prices), such renewable energy transactions introduce new legal and regulatory issues that corporations need to consider carefully.

Contacts:[Scott Kimpel](https://www.hunton.com/en/people/scott-kimpel.html): Partner, Washington, DC



[Eric Pogue](https://www.hunton.com/en/people/eric-pogue.html): Partner, Washington, DC



Implementation of EU General Data Protection Regulation (“GDPR”)May 25, 2018

As of May, 2018 companies handling personal data will have to be fully compliant with the provisions of the GDPR. The territorial scope of the GDPR is significantly wider than under the Directive, and it will apply to all companies that offer goods or services to individuals located in the EU, or that monitor the behaviour of EU-based individuals. Enhanced compliance obligations and increased financial sanctions are likely to be a challenge for retail companies operating worldwide.

Blog Post:[EU General Data Protection Regulation Finally Adopted](https://www.huntonprivacyblog.com/2016/04/14/eu-general-data-protection-regulation-finally-adopted)

Contact:[Aaron Simpson](https://www.hunton.com/en/people/aaron-simpson.html): Partner, London

+44 (0) 20 7220 5612| [[email protected]](mailto:[email protected])


Sustainability and Corporate Clean PowerSeptember 1, 2018

Climate Week NYC, September 2018






REAL ESTATE

Impact of New FASB Leasing StandardDecember 15, 2018


Public Company transition period beginning for fiscal years after December 15, 2018 (calendar year 2019); all other companies effective for fiscal years beginning after December 15, 2019 (calendar year 2020)

On February 25, 2016, FASB issued a new Accounting Standards Update. The new rule makes significant changes to the FASB standards for lease accounting by requiring tenants and other lessees to recognize assets and liabilities for certain operating leases, which were traditionally kept off-balance sheet.

These changes in balance sheet reporting will have dramatic effects on how companies hold real estate and may present significant operating challenges upon implementation.

The FASB changes will impact whether companies decide to lease real property or purchase it. While historically many companies chose to lease real estate assets in order to keep significant long-term obligations off their balance sheets, the new accounting standards will cause companies to rethink that decision.

Companies that enter into leases may want to change how those leases are negotiated. Companies with existing operating leases may face implementation costs arising from the need to keep a more detailed database of their leases. Additionally, the inclusion of operating leases as liabilities may also upset companies' debt-to-equity ratio, which might require the renegotiation of existing financing covenants to avoid being in breach.

Contact:[Shaswat Das](https://www.hunton.com/en/people/shaswat-das.html): Senior Attorney, Washington, DC


REAL ESTATE

R-22 Phase-Out in Retail LeasesJanuary 1, 2020

January 1, 2020 is the date R-22, a hydrochlorofluorocarbon (HCFC) based refrigerant being used in roughly 50% of all HVAC equipment, is set to phased out.

Most triple-net commercial retail leases provide that tenants are responsible for the maintenance of their HVAC systems, and as the deadline approaches, R-22 will be in short supply and prices will quickly become the highest line item in most repairs, likely to be hundreds of dollars per pound. For those who are not prepared, HVAC repairs of R-22 based units may quickly get out of hand and availability issues may cause interruptions in service.

PDF:[Phasing Out HCFC Refrigerants To Protect The Ozone Layer](https://www.epa.gov/sites/production/files/2015-07/documents/phasing_out_hcfc_refrigerants_to_protect_the_ozone_layer.pdf)

Blog Post:[R-22 Refrigerant Phase Out Will Impact Most Retail Leases](https://www.huntonretailindustryblog.com/2017/01/articles/real-estate/r-22-refrigerant-phase-will-impact-retail-leases/)

Contact:[Freddy Chang](https://www.hunton.com/en/people/frederic-chang.html): Associate, Dallas



Sustainability and Corporate Clean Power


January 1, 2020

Step down dates for federal PTCs (production tax credits for wind) and ITCs (investment tax credits for solar), including January 1, 2020 which is the current cut-off date for PTCs and the beginning of the step-down for ITCs







Hunton & Williams Retail-CPG RADAR€¦ · DOL Overtime Rule December 1, 2016 The DOL’s final...

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