Written by Brian A. Cafritz, Esq.
With the looming FDA deadline requiring restaurants to make nutritional data on food products available, restaurateurs wondering about its impact need only look to the recent headlines to see the latest trend in litigation. This month alone, Subway settled a class action lawsuit for selling “foot-long subs” that were only 11 inches. Peet’s Coffee has been sued for selling less coffee in cups that are charged as 12 and 32 oz. Indeed, restaurants are now learning what retailers and manufacturers of goods learned long ago…that the public can be very demanding and even more unforgiving. But what has spurred this attack on restaurants?
The world is changing faster than most of us can keep up. Access to information instantly streams to the palm of our hand. Social media has connected millions to observations and experiences thousands of miles away. In addition, society has evolved to a point where large verdicts and class actions against corporate giants are not unthinkable outliers but are embedded in the culture of our society. To be certain, easy access to information has created a consumer base that demands immediate and accurate information, and has created an expectation that a selected product be served as promised without error.
Whether it is intended or not, the language used in a restaurant’s description of a product can create an express warranty to the consumer. Typically quantifiable, provable, or measurable descriptions in a product’s ingredients, (Organic, Vegan, or Gluten Free), or in the product’s size (Quarter Pounder, Foot Long, or 32 oz.) create consumer expectations that may be misleading if the product does not fit its description.
At a time where awareness of allergies, obesity, and the health impacts of ingredients are at an all-time high, consumers rely on the representations made by restaurants as to what is being served. And as the ability to communicate on social media grows, consumer advocates are becoming more mobilized and more influential. For example, advocate groups for Clean Eating are levying more influence on what foods are being served and how they are prepared.[1] As a result, the need for transparency is growing for restaurants, and the public’s expectations in that transparency are more and more uncompromising.
This trend will only increase when the new food labeling laws go into effect. When the Affordable Care Act was passed in 2010, it forced the FDA to amend its requirements on nutritional information. As such, the demand for consistency in food labeling was codified. Under the new legislation, calorie labeling on menus or menu boards will be required for restaurants and retail food establishments that do business under the same name or are part of a chain of 20 or more locations who offer for sale substantially the same menu items.[2] The law specifically exempts the Calories requirements for condiments, daily specials, custom orders, or temporary/seasonal menu items. Food Establishments that are likely to fall under the act include chain restaurants, fast-food restaurants, grocery stores, convenience stores, coffee shops and some entertainment venues like movie theaters or theme parks. While calorie information is the only content required on the menu or menu boards, upon consumer request, covered restaurants must also provide written nutrition information about total calories, total fat, calories from fat, saturated fat, trans fat, cholesterol, sodium, total carbohydrates, fiber, sugars and protein. The deadline to implement this law has now been extended to December 2016, in order to allow for guidance on questions; for example, how to accurately label multi serving foods such as pizzas, popcorn buckets, or loaves of bread that are meant to be shared was uncertain.
Violations of the Act can result in criminal prosecution and civil penalties from the FDA.[3] However, what about private rights of action? As Subway and Peet’s have learned, class action lawsuits are no small affair, as the financial cost of a class action is extreme. Separate and apart from the direct financial cost, the lost consumer trust in the company’s brand that follows can be catastrophic. Even where class actions are not appropriate, the majority of states have enacted some version of a consumer protection statute that prohibits the misbranding or mislabeling of products, and in severe or egregious cases, may include treble damages and attorney’s fees. Still further, there is strong authority in many jurisdictions that a food purchase in restaurants is a “sale of goods” as contemplated by the UCC.
Accordingly, whether or not a particular restaurant or establishment falls under the new FDA guidelines, there is no shortage of theories under which a restaurant can be sued for misbranding or mislabeling its food products.
So what types of restaurants or establishments should be wary?
- Those with multiple locations – when the same mistake is repeated in multiple locations, it becomes easier to show (or at least allow an inference) that a misbranding or falsehood in food product is widespread, intentional, or at the very least, not an isolated incident.
- Those who attempt to replicate the same food product repeatedly – when particular dishes roll off menus with regularity, it is more difficult to establish full continuity in the product. However, menu items that are regular attractions and are repeated over time or across different locations heightens expectations of consistency and allows a greater opportunity to show repeated discrepancies.
- Those that describe menu items with quantifiable and measurable descriptors – this allows a simple measurable test to validate or disprove the accuracy of the representation.
What steps can be taken to minimize problems?
- Avoid naming products with measurable descriptors.
- For long term menu items that require consistency, incorporate dedicated tools into the preparation and/or cooking process to remove human error or guesswork and allow for certainty in measurements.
- Institute protocols for labeling and storage of ingredients to avoid potential confusion or mistakes.
- Proper training of staff to understand the importance of quality control so that all representations in the product are met.
- Institute a plan where all nutritional content can be delivered without dependency on temporary or low level employees (web or phone based applications controlled from a corporate level, pre-printed materials, etc.).
While the potential for exposure can be daunting, restaurants should realize that properly preparing food items to meet consumer expectations can be an opportunity to strengthen trust and respect in its consumer base.
If you have any questions on how your company can best protect itself, or what may be required of it, KPM’s retail and restaurant team are ready to discuss them with you.
[1] “Clean eaters’ wield influence on restaurant industry” Fern Glazer, National Restaurant News (November 2015)
[2] 21 U.S.C. §343(q)(5)(H) et seq.
[3] 21 U.S.C. §333