Does Your Product Contain Chemicals That Require a Warning?

If you manufacture or sell consumer goods, chances are that your product contains at least one of 900 chemicals which require a written warning to consumers under California’s Proposition 65.

For example, products made of vinyl (purses, belts, zippers), leather or imitation leather (shoes, jackets), or brass (door knobs, key-chains, frames) may contain lead. Painted glassware, pottery, nail polish and hair products may contain cadmium or formaldehyde. Those are just a few examples.

Penalties for failure to warn are stiff often requiring companies to pay thousands of dollars and to do things not otherwise required under the law (e.g. stop selling the product).

And now California’s Proposition 65 has been amended to impose stricter requirements that will take effect on August 30, 2018 for all products manufactured after that date. The bounty hunters are already circling to catch unsuspecting, non-compliant companies. This article gives a general overview on the law and amendments as it relates to consumer products (excluding food and other specialized products). Businesses are encouraged to start complying with the new warning requirements as soon as possible.

WHAT IS THE LAW AND WHO MUST COMPLY?

Under Proposition 65, any person doing business in California must provide a “clear and reasonable” warning to consumers if any of the products they sell contains a certain amount of any one of the listed chemicals which are known to cause cancer or reproductive toxicity. For the (ever growing) list of Proposition 65 chemicals click here. If the product contains less than the allotted amount, then no warning is required (known as the “safe harbor” level). For a list of safe harbor levels click here.

Only businesses that employ 10 or more people are subject to Proposition 65.  If a company employs 9 or less people, then it is exempt and not required to warn.

However, even exempt, out-of-state companies may need to comply with Proposition 65 if they sell products to a larger retailer who is not exempt. Most large retailers (like Target) sell to consumers in California and must therefore comply with Proposition 65. These large retailers will often require its suppliers – regardless of size or location – to comply with Proposition 65 even if they are otherwise exempt since the larger retailer must comply. Suppliers should review their contracts with these retailers for compliance requirements. Likewise, non-exempt retailers should make sure their exempt or out-of-state manufacturers, distributors, or importers comply with Proposition 65.

Below are some key provisions of the new rules as applied to consumer products which go into effect for products manufactured after August 30, 2018.

WHAT SHOULD THE WARNING SAY?

Currently, the warning must advise that the product contains a chemical known to the State of California to cause cancer, or birth defects or other reproductive harm. It is not necessary to identify the chemical. The new law changes the requirements for the warning language. The requirements are as follows:

1. include the word “WARNING” in all capital letters and bold print;
2. include a yellow caution triangle with an exclamation point preceding the warning in a size no smaller than the height of the word “WARNING” (click here to download the symbol) (a black and white triangle may be used if the label or shelf tag is not printed using yellow);
3. state that the product “can expose” users to chemicals, including one or more chemicals listed by name, separately as to those causing cancer and those causing reproductive effects, unless the chemical is known to cause both cancer and reproductive harm;
4. include a link to www.p65warnings.ca.gov.

Examples of this “long form” warning are:     

Alternatively, this “short form” warning requires that the type-size for the warning may be no smaller than the largest type size used for other consumer information on the product label, and must be a minimum 6-point type. If the warning is placed directly on the product label (e.g., a label that is printed on or affixed to a product or its immediate container or wrapper), the warning may be shortened, and the name of the chemical omitted, as follows:

HOW SHOULD THE WARNING BE GIVEN?

Posting at the Retail Store: A retailer must conspicuously post Proposition 65 warnings to customers at a retail store using one of the following methods:

1. posting a “product specific,” long form warning on a posted sign, shelf tag, or shelf sign at each point of display at a retail store;
2. posting a “product specific,” long form warning via any electronic device that automatically provides the warning to a purchaser prior to the purchase of a product;
3. providing a long form warning on the label;
4. providing an on-product, short form warning on the label – either on the product itself or its immediate container or wrapper (using the appropriate type size).

Posting Online: Retailers selling a product online must also place a long form warning online either:

1. on the product’s display page;
2. in a hyperlink using the word “WARNING” on the product display page; or
3. by prominently displaying the warning to the purchaser prior to completing the purchase (e.g. on the checkout page).

(Alternatively, a short form warning may be used online instead of a long form if the product label also contains a short form warning label.)

Posting in a Catalogue: Retailers selling a product in a catalog must also provide a long form warning in a manner that clearly associates it with the product being sold. A short form warning may be used instead of a long form if the product label also contains a short form warning.

WHAT LANGUAGE SHOULD BE USED FOR THE WARNING?

If a product’s warning sign or label includes consumer information about the product in a language other than English, the warning must also be provided in that other language in addition to English.

WHO IS RESPONSIBLE FOR PROVIDING THE WARNING?

Under the new law, manufacturers, packagers, importers, suppliers, and distributors (together referred to as “Suppliers”) are given the lion’s share of responsibility for providing Proposition 65 warnings to retailers (or middlemen), who in turn, pass the warnings along to the consumer. Suppliers meet their obligations by either:

• providing a Proposition 65 warning on the product label, or
• providing written notice to the “authorized agent” for the retailer (or middleman) which:
• states that the product may result in exposure to one or more listed chemical;
• includes the exact name or identifier of the product;
• includes all warning materials, such as labels and shelf signs for stores and warning language for use online; and
• receipt is confirmed electronically or in writing by the retailer’s authorized agent.

Under the written notice scenario, the retailer is then responsible for placement and maintenance of the warning received from Suppliers. Manufacturers who do not sell directly to the retailer (but to a middleman) must take appropriate measures (e.g. enter into contracts) to make sure the warning is passed along to the retailer and then the consumer.

Under the new law, retailers also bear responsibility for providing their own warning when they:  

1. sell their own branded product;
2. introduce a listed chemical into a product;
3. have covered up or altered a warning label previously affixed to the product;
4. have received notice and warning materials from a Supplier but fail to post them;
5. have actual knowledge that the product requires a warning, and there is no Supplier who is doing business in the State of California and has designated an agent for service of process or has a place of business in California.

WHAT ARE THE PENALTIES FOR NON-COMPLIANCE?

Penalties for failing to provide a Proposition 65 warning can be as high as $2,500 per violation per day.

Private bounty hunters have made searching for Proposition 65 violations a cottage industry. They can find violators by simply purchasing a product and inexpensively testing it. If the test yields a result showing the product contains an excess of the amount allowed by law, they send out a Notice of Violation demanding large sums to settle the claim. If the claim is not settled within two months, the plaintiff will file a lawsuit often seeking damages in excess of the amount originally demanded and often demanding that the company change the wording or the warning that is more onerous than required.

WHAT IS THE PROCESS FOR DETERMINING CHEMICAL COMPOSITION?

Under the new law, businesses will need to specifically identify one or more listed chemicals in their product (if over the limit). Businesses can determine chemical composition by, among other ways: analyzing material spec sheets, testing the product (and all components) at a U.S. certified lab, and/or conducting preliminary tests using an X-ray Fluorescence analyzer (for lead, cadmium), among other ways. The results of the tests and how they are applied to Proposition 65 requirements are often very complicated and often require expert analysis.

WHAT TO DO NOW?

It is important that businesses get a Proposition 65 compliance plan in place both internally and with their affiliates. Companies should take the following steps:

1. review their current inventory and determine if a warning is required;
2. review their contracts with affiliates (e.g. Retailers and Suppliers) to determine if there is a Proposition 65 compliance clause, and take appropriate action;
3. review the chemical composition of products scheduled to be manufactured after August 30, 2018 and take appropriate steps for necessary warnings.

This article is for information purposes only and does not constitute legal advice. Please contact an attorney for more information about this subject matter.

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