California Apparel News

At a product safety and chemical management seminar organized by the American Apparel and Footwear Association in Los Angeles, representatives from companies including Splendid/Ella Moss, Marc Jacobs International, Pacific Sunwear of California, Jerry Leigh, VF Corp., The Walt Disney Co., Kellwood and Volcom met to learn more about two laws that have been plaguing the garment industry.

Both the Consumer Product Safety Improvement Act, a federal regulation, and Proposition 65, a California state regulation also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, seek to limit consumers’ exposure to harmful substances and chemicals. Manufacturers argue that the laws are too complicated, vague, costly and, in the case of Prop. 65, misguided.

Kevin Burke, the AAFA’s president and chief executive, speaking at the May 25 seminar, said government regulators don’t understand the costs companies incur to comply with these regulations. “The problem is that the people regulating us have no idea the process that you have to go through to get it there. A lot of government regulators think you’re the bad guys. You’re not the bad guys,” he said.

The two laws approach chemical management and consumer product safety in unique ways.

The CPSIA implemented strict nationwide requirements and staggered deadlines for new lead and phthalate bans in children’s products. Manufacturers are responsible for submitting all children’s products to third parties for testing to certify that the lead content in their products does not exceed Consumer Product Safety Commission standards.

Prop. 65 requires companies to issue warnings before people are exposed to chemicals known to cause cancer or reproductive toxicity. According to the AAFA, Prop. 65 requires that all products in the state carry a “clear and reasonable” warning label for all products containing one or more chemicals known to the state to cause cancer or reproductive toxicity. Labeling requirements are dependent on consumer exposure to the chemical, not the concentration in the product.

To comply with the law, manufacturers must either ensure that consumer exposure to chemicals in their products does not exceed the established safe harbor levels or label their products.

Prop. 65 gaining momentumSeveral points make Prop. 65 particularly prickly.

The list of chemicals regulated under the law is vast and includes items from alcohol, aspirin and environmental tobacco smoke to obscure chemicals such as 2-Ethylhexanoic acid and Fluticasone propionate. Apparel manufacturers bristle at the thought of putting labels that say: “Warning: This Product Contains Chemicals Known to the State of California to Cause Cancer or Birth Defects or Other Reproductive Harm” on products that comply with federal and state product-safety standards.

Most critics, however, focus on the law’s “bounty hunter” provision, which allows citizens, lawyers or organizations to provide notice to the California Attorney General’s office to bring action against a manufacturer, brand or retailer that sells or makes items containing levels of the regulated chemicals but without proper labeling. If the attorney general fails to take action on a Prop. 65 notice in 60 days, the private party may file a lawsuit.

In the first five months of 2011, there have been a record-breaking 241 Prop. 65 notices. In the last year, Prop. 65 notices have been issued to companies such as La Jolla Group, Nike, Hurley, Apple Bottoms and DSW. There were 208 Prop. 65 notices issued to apparel retailers and manufacturers in 2010. The notices, which often lead to pricy settlements, are costing the industry dearly.

According to the AAFA, in the past 10 years there have been 241 Prop. 65 notices in the apparel industry—with more than $141 million in settlements, 10 percent in 2010 alone. And #8232;60 percent of those settlements end up in the pockets of lawyers.“I don’t call them settlements, folks,” Burke said. “I call them akin to having somebody stick a gun to your back and say, ’Hand me your wallet.’ hellip; It’s a glorified stickup. hellip; When 60 percent of the proceeds are going to the lawyers who are representing the, quote, citizens who are bringing suit—it’s an untenable situation.”

And unfortunately, Burke said, there’s not a lot people receiving Prop. 65 notices can do—even as the rate of notices increases. “Personally, I don’t know how you fix it other than to completely get rid of it. But that’s not going to happen. hellip; In its original form, it was there to protect the public good, but it has gotten way out of hand. I don’t know what to do about it—other than have a good lawyer.”

CPSIA updateThe CPSIA has cost apparel makers millions in unnecessary testing, sent factories scrambling to reconfigure compliance programs to meet constantly changing rules and resulted in the destruction of “perfectly good” products that met previous safety standards, Burke said. “It has been probably one of the most challenging issues this association has ever faced because of the impact it has across all sectors—not just apparel or footwear but all of our suppliers.”

The CPSIA is a moving target, Burke acknowledged.

A new bill has the AAFA hopeful for some positive changes in the CPSIA regulation. The Enhancing CPSC Authority and Discretion Act of 2011—which, among other things, narrows lead limitations to only those products that can be placed in the mouth and are intended for children under 6 and exempts the sale of used children’s products other than metal jewelry and products the donator or seller specifically knows to violate the lead standard—was the topic of a House of Representatives committee meeting on #8232;May 25. Results of the meeting were not available at press time. “We’re going to probably get 40 percent of what we wanted. So it’s a process,” Burke said.

More deadlines and confusion loom. On Aug. 14, the CPSIA’s lead-content limit is scheduled to drop from 300 parts per million to 100 parts per million—a level that the CPSC has yet to establish is technologically feasible for children’s products to meet.