Dear NRRDA Members, The NRRDA Employment Practices Committee Chair, Madeline Baio, is sharing Employment and Labor Alerts with the membership. Enjoy this benefit. Thank you! NRRDA Employment Practics Committee Food Labeling and the FDA: What Manufacturers Need to Know to Minimize Risk Walk the aisles of any grocery store, and the words will pop up before your eyes: “Natural!” “All-Natural!” “Gluten-Free!” The labels can be confusing for consumers, and their use can have major consequences for food and beverage manufacturers. The Food and Drug Administration (FDA) is paying close attention, and the result is a legal minefield. How does the FDA define these terms, and what do manufacturers need to know to mitigate their risk? We asked Josephine Belli, a partner in Goldberg Segalla’s Food and Beverage Practice Group, to take us through what can seem to be a confusing jumble of terms and issues. Jo, how does the FDA define terms like “natural” and “all-natural”? The FDA has not yet developed a definition for the term “natural,” and this has caused some uncertainty in the marketplace. According to the agency, defining the term would require an analysis of relevant science, consumer preferences, perceptions, beliefs, food production technologies, food processing methods, and First Amendment issues. The FDA has also noted that defining the term “natural” involves other agencies, including the United States Department of Agriculture. As such, we are left with a general definition to which the FDA has not objected: food that does not contain added color, artificial flavors, or synthetic substances. In addition, the agency will maintain its policy regarding the use of “natural” as meaning that nothing artificial or synthetic — including all color additives regardless of source — has been included in that food, or has been added to a food that would not normally be expected to be found in that food. From FDA warning letters and litigated matters, we have some guidance on what “natural” is not. For example, a food is not “natural” if it contains artificial-synthetic-genetically modified organism (GMO) ingredients like high-fructose corn syrup, xanthan gum, or GMO corn. How about “gluten-free”? There is more clarity with respect to “gluten-free” claims, as the FDA issued a final rule defining the term on August 2, 2013. (The compliance date for manufacturers was August 5, 2014.) The adverse health effects of gluten on people with celiac disease made the development of a standard definition imperative. An estimated 3 million people in the United States suffer from celiac disease. For individuals who have the disease, foods that contain gluten trigger production of antibodies that attack and damage the lining of the small intestine. Such damage limits the ability of celiac disease patients to absorb nutrients and puts them at risk of other very serious health problems, including nutritional deficiencies, osteoporosis, growth retardation, infertility, miscarriages, and even intestinal cancers. The only way to manage the disease is by not eating gluten. The FDA’s labeling requirements with respect to “gluten-free” will help consumers, especially those dealing with celiac disease, to be confident that items labeled “gluten-free” meet a defined FDA standard of gluten content. As one of the criteria for using the claim “gluten-free,” the FDA is setting a gluten limit of less than 20 ppm (parts per million) in foods that carry this label. This is the lowest level that can be consistently detected in foods using valid scientific analytical tools. Most people with celiac disease can tolerate foods with very small amounts of gluten. This level is consistent with those set by other countries and international bodies that set food safety standards. How do companies play with these terms? In other words, what kind of inappropriate uses of this terminology have you seen? Recently, we have seen lots of activity around “natural” and “all-natural” claims. FDA warning letters to companies shed light on what the FDA does not consider “natural.” In 2013, a cracker company claimed a product was “all-natural,” while the product contained artificial rye flavor. Again in 2013, a marketer of a “natural” seafood product contained imitation crab meat containing at least four synthetic ingredients. In 2011, two letters were sent over the use of “all-natural” claims on products containing disodium dihydrogen pyrophosphate and potassium sorbate, both synthetic chemical preservatives. In its warning letters, the FDA reiterated its current policy regarding use of the term “natural” on food labeling, which is that “nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in food.” It is not always clear whether certain ingredients are artificial, synthetic, or not normally expected to be in a food. Note that ingredients targeted as “unnatural” include high-fructose corn syrup, xanthan gum, hexane-processed soy ingredients, ascorbic acid, GMO corn, disodium phosphate, inulin, fibersol 2, evaporated cane juice, and maltodextrin, as well as synthetic preservatives. The lack of a clear, formal definition of “natural” or “all-natural” has resulted in litigation and a number of class action lawsuits attacking companies’ use of these claims. Consumer groups have also expressed their dissatisfaction with the level of uncertainty surrounding certain claims. We have seen labeling issues and litigation involving products such as juices, granola bars, soups, chips, salsas, yogurts, and ice creams. Class action activity has impacted manufacturers, suppliers, marketers,and retailers of food and beverages. While not admitting liability, there have been some noteworthy settlements involving the use of “natural” or “all-natural” claims by companies that are household names. What should food manufacturers pay particularly close attention to? How can they be proactive? The FDA is not adverse to claims like “natural,” “all-natural,” “non-GMO,” “organic,” and “gluten-free,” but food manufacturers and marketers must make sure that they can support the claims and that they are not confusing or deceiving consumers. Failure to have the proper support can result in regulatory action by the FDA (and in some cases the USDA) and even class action litigation. And since “gluten-free” has medical and health implications, it is vitally important for manufacturers to read and understand the FDA’s definition of “gluten-free” before making such a claim. Workers Not Entitled to Pay for Security Check Time Employers should be relieved to know that they are not required to pay employees for security check time. In a unanimous opinion issued Tuesday, the U.S. Supreme Court held that workers are not entitled to be paid for time spent waiting for and undergoing post-shift anti-theft screenings under the Fair Labor Standards Act (FLSA) as amended by the Portal to Portal Act. The case involved workers at an Amazon warehouse who were employed through a staffing agency, Integrity Staffing Solutions, Inc., to retrieve inventory and package it for shipment to customers. The workers argued that the time should be compensable because it was “to prevent employee theft” and thus occurred “solely for the benefit of the employers and their customers.” Rejecting this contention, the court found that a test that turns on whether the activity is for the benefit of the employer is overbroad. The court explained that under the FLSA an activity is compensable if it is integral and indispensable to the principal activities that an employee is employed to perform. In order to meet this test, the activity must be an intrinsic element of the activity and one with which the employee cannot dispense if he or she is to perform the principal activity. The integral and indispensable test is tied to the productive work that the employee is employed to perform. Because the productive work involved in this case involved retrieving inventory and packaging it for shipment, the court held that the post-shift screening was not an intrinsic element of that activity and therefore not compensable. The court’s ruling is consistent with prior precedent which distinguishes between activities that are essentially part of the ingress and egress process, on one hand, and activities that constitute the actual “work of consequence performed for an employer” on the other hand. Activities that are part of the ingress and egress process are referred to as “preliminary” or “postliminary” to the work to be performed and are not compensable. The Code of Federal Regulations explains that time spent clocking in and out of work, waiting in line to do so, changing clothes, washing up or showering, and waiting in line to receive pay checks constitute “preliminary” or “postliminary” activities and employees are not entitled to compensation for the time spent engaged in those activities. On the other hand, the court has held compensable time battery-plant employees spent showering and changing clothes because the chemicals in the plant were “toxic to human beings” and the employer conceded that the “the clothes-changing and showering activities of the employees were indispensable to the performance of their productive work and integrally related thereto.” Similarly, in another case, the court held compensable the time meatpacker employees spent sharpening their knives because dull knives would “slow down production” on the assembly line, “affect the appearance of the meat as well as the quality of the hides,” “cause waste,” and lead to “accidents.” As every situation is different, it is best to consult with counsel to ensure compliance with the FLSA and local labor and wage laws.
Posted on: Tue, 23 Dec 2014 19:07:18 +0000
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