Newsletter April 20, 2023

POLICY

• 2023 Legislative Session Update
• Health Data Privacy bill headed to Governor
• Joint letter from Attorney General, UFCW, and WR requests full funding of ORC Task Force 
• WR joins US Chamber opposing pending non-compete legislation
• Ambient Heat Exposure permanent rulemaking hearings scheduled 

ECONOMY

• Retail sales moderated in March, but positive growth expected for 2023
• Producer prices drop while inflation slowly rises

ON THE LOCAL FRONT

• Mayor Harrell announces actions to revive downtown Seattle

RETAIL THEFT & PUBLIC SAFETY

• ORC Report: An Assessment of a Persistent and Growing Threat

TRENDS

• Online reviews can impact a retailer’s bottom line
• Target's private labels: A 40-year success story

SAFETY

• Stay prepared and save lives: The importance of learning first aid in the workplace

2023 Legislative Session Update

Last Wednesday, April 12, was the last opportunity for bills to pass from the opposite House, except for initiatives, alternatives to initiatives, budgets, matters necessary to implement budgets, and differences between the houses. 

Just four days remain for the 2023 Legislative session, which is expected to finish on schedule. The WR government affairs team continues to work diligently, addressing issues on several bills of great importance as well as ORC Task Force funding which will hopefully be contained in the final operating budget.

SB 5352 — Concerning vehicular pursuits

Senate Bill 5352 addresses the 2021 legislation HB 1054, which increased the criteria for police pursuits from reasonable suspicion to probable cause that an individual has committed specific crimes before initiating a chase.

The bill left the Senate in March and was watered down significantly, excluding property crimes. The bill passed out of the House on Monday with amendments that modified the evidentiary threshold required for engaging in a vehicular pursuit. The amended version allows an officer to conduct the vehicular pursuit if the officer has reasonable suspicion—rather than probable cause—that a person has or is committing vehicular assault. Officers may also pursue in situations where the subject of the vehicular pursuit poses a serious risk of harm to others.

Early Tuesday morning, the House of Representatives passed a version of a bill that would lower the threshold for police to pursue a suspect from probable cause to reasonable suspicion. Pursuits would only be permitted for limited crimes, including a violent offense, sex offense, an escape, a DUI, vehicular assault, or domestic violence assault in the first, second, third, or fourth-degree offense.

Under existing legislation, pursuits are permitted solely when an individual presents an “immediate danger.” At the same time, the House’s proposal broadens the criteria to include cases where a person poses a “significant threat of harm to others.” The bill was voted out of the Senate after a vote to concur and is now off to the Governor for signing.

WR is disappointed that the legislation does not allow police to chase retail thieves. We will be back next session to ask for its inclusion.

HB 1068 — Injured workers’ rights during medical exams

House Bill 1068 addresses the issue of injured employees during independent medical evaluations. Within the workers’ compensation framework, a claims manager representing either a State Fund or self-insured employer can request that an injured worker undergo an independent medical evaluation (IME). An IME aims to determine whether a claim should be approved or reopened, address new medical concerns, support appeals, assess case progression, and evaluate the extent of a worker’s permanent disability or work limitations. IME assessments are conducted by licensed doctors authorized by the Department of Labor and Industries.

HB 1068 would allow an injured worker to record video of IMEs using their phone or any other recording device during an exam by one person of the worker’s choosing.

As amended, the bill: 1) specifies that the worker may not materially alter the recording, 2) prohibits the worker from posting the recording on social media, 3) requires the worker, no less than seven calendar days before the exam, to provide notice to the scheduling entity indicating that the exam will be recorded, and 4) requires the Department of Labor and Industries to adopt rules regarding the notification process.

WR opposes this bill as L&I predicts it may result in scheduling delays if a provider refuses to grant permission for audio or video recordings, particularly among mental health professionals. Moreover, the bill could contribute to escalating expenses, as any postponement in delivering services to injured employees could result in long-term disability and claim-related costs.

The bill was voted out of the House last month, out of the Senate the week before last, and returned to the House for concurrence. The House concurred, and the bill now goes to the Governor for consideration.

SB 5217 Ergonomics – This bill repeals the voter-approved ban on rulemaking on musculoskeletal injuries. It authorizes the Dept. of Labor and Industries to promulgate one rule per year for an industry or sector with more than twice the rate of musculoskeletal injuries compared to the state’s overall rate. The bill includes WR-supported amendments to delay rule implementation for three years and to exclude sub-sectors of an industry that are not meeting the threshold rate of injuries. The intent is to focus on those sectors and businesses incurring high rates of injuries and not include those operating safely.

As passed, the bill only allows for one rule per year. With somewhat ambiguous language, it will not impact most of the businesses because few have a claim performance of twice the state's rate. The bill was delivered to the Governor for his consideration. WR opposed this bill because musculoskeletal injury rates have been trending down, and rulemaking will yield limited results.

Health Data Privacy bill headed to Governor

House Bill 1155 – the My Health, My Data Act has passed the legislature and is headed to the Governor’s Office for consideration. Governor Inslee has until May 16 to take action and has indicated he intends to sign it into law.

WR continues to have significant concerns with the implementation inconsistencies and timeline for compliance.

WR and members are working with the Attorney General's office seeking “guidance” on implementation and compliance. In addition, WR will present its letter to the Governor outlining the discrepancies on the implementation dates and signing a broader letter from several industry associations. 

HB 1155 has both state and national ramifications as the first privacy bill allowing a private right of action and Attorney General enforcement.

Joint letter from Attorney General, UFCW, and WR requests full funding of ORC Task Force 

WR, in collaboration with the office of the Attorney General, United Food and Commercial Workers International Union (UFCW) jointly signed a budget request letter urging the full funding of the Attorney General-led Organized Retail Crime (ORC) Task Force. Addressed to Timm Ormsby, the Chair of the House Appropriations Committee, the correspondence urged the House to fully endorse the ORC Task Force's funding, aligning with the Senate and Governor's proposals of $2.65 million. 

WR joins US Chamber opposing pending non-compete legislation

Non-compete clauses, which determine where employees can work after leaving a company, have become a contentious issue, with widespread use and an uncertain future. In January, the Federal Trade Commission (FTC) proposed prohibiting employers from enforcing non-compete agreements and invalidating existing ones.

The FTC invited public input on the potential ban until yesterday, April 19. WR signed on to the U.S. Chamber’s coalition comment letter to the FTC on Monday, along with the support of nearly 300 organizations representing 45 states.

Eliminating non-compete agreements would significantly impact numerous industries, such as healthcare, technology, beauty services, manufacturing, and broadcasting.

Non-compete clauses differ in their stipulations, but they typically restrict former employees from joining or establishing competing businesses within specific regions and for specific durations. For instance, executives moving to a rival company might be prohibited from doing so for six months after leaving their previous employer.

Supporters of non-compete agreements argue that such restrictions are crucial for safeguarding proprietary information and justifying investments in employee development. The U.S. Chamber of Commerce threatened to take legal action against the FTC following the introduction of the proposed ban.

Many organizations maintain that non-compete agreements serve essential business and employee interests, fostering greater investment in employee training. The U.S. Chamber of Commerce contends that the FTC lacks the legal jurisdiction to implement the proposed rule.

Ambient Heat Exposure permanent rulemaking hearings scheduled

Labor and Industries (L&I) is in the process of creating permanent heat exposure rules rather than issuing emergency heat rules as they have the past two years. Currently, they are actively in the CR-102 rulemaking process. The goal is to update the Outdoor Heat Exposure rules before the summer heat arrives.

WR is pleased that L&I incorporated our suggestion to exempt intermittent exposure to heat, which is defined as less than 15 minutes per hour. Our concerns remain in the proposed permanent rules because L&I is suggesting lowering the high outdoor action level temperature from 89º to 80º F. Additionally, they are incorporating new and imprecise terminology that necessitates employers to observe an "acclimatization" expectation for their employees.

A rulemaking fact sheet and additional information and resources can be found on the Rulemaking Activity Page.

See meeting dates and comment options

Retail sales moderated in March, but positive growth expected for 2023

Federal Reserve chair Jerome Powell has been increasingly hinting at the possibility of a recession due to the central bank's monetary tightening. The Fed staff now anticipates a "mild recession" later this year, followed by two years of recovery, according to the minutes of the last policy meeting. Policymakers projected that the unemployment rate will rise by a full percentage point by the end of the year, an event historically associated with a recession. Despite these concerns, the Fed raised interest rates at that meeting and is likely to do so again in early May.

The possibility of an "immaculate disinflation" has been a topic of debate among economic commentators and Fed officials. However, the combination of persistent inflation and troubles in the banking sector make it a more remote possibility. The official stance is that inflation is coming down too slowly, and backing off the tightening campaign could worsen the economic outlook.

Meanwhile, the National Retail Federation (NRF) reported that retail sales slowed in March, but spending remained higher than the same time last year. Easing inflation and the strength of the job market and wages should support consumer spending through 2023. Retailers are prioritizing product mix, competitive pricing, and convenience to help consumers stretch their budgets.

While March spending was slower, there is still a lot of spending in the economy. The NRF forecasts that 2023 retail sales will grow between 4% and 6% over 2022. Despite concerns about a recession, the White House press secretary, Karine Jean-Pierre, stated that recent economic indicators are not consistent with a recession or a pre-recession.

Producer prices drop while inflation slowly rises

In March, inflation increased at a slower pace than in previous months, according to the latest consumer pricing data from the U.S. Bureau of Labor Statistics (BLS). The Consumer Price Index rose 0.1%, contributing to a 5% increase over the last 12 months, approximately double the rate economists consider healthy. Price changes varied across different goods and services, with the food at home index experiencing its first decline since September 2020.

Economists are uncertain whether the downward trend in inflation will continue. Jason Furman, an economist and Harvard professor, suggests that while there are reasons to expect a slowdown, assuming it will continue in the coming months would be a mistake. He advises thinking of inflation at a roughly 4% pace.

The U.S. Treasury has given lawmakers a deadline to raise the debt ceiling or risk defaulting on the national debt. President Joe Biden has faced criticism for the price increases during his administration, which some argue were fueled by trillions of dollars in federal debt spending. Republicans also point to elevated debt levels and the need for spending cuts ahead of the debt limit deadline.

Experts are uncertain how inflation will affect the Federal Reserve's rate hike decisions. Charlie Ripley, Senior Investment Strategist for Allianz Investment Management, said the latest CPI data does not provide much room for the Fed to continue raising policy rates after the May meeting, suggesting that the peak in Fed policy rates may be approaching.

The latest economic data also shows that producer prices saw their most significant drop since the pandemic began, with the index for final demand decreasing by 0.5% in March. Despite this, it has increased by 2.7% over the last year.

The National Federation of Independent Businesses reported that their small business optimism index decreased in March, continuing a trend of lower optimism that has persisted for over a year.

Mayor Harrell announces actions to revive downtown Seattle

In a significant announcement Monday, Mayor Bruce Harrell announced new action to bring vitality back to downtown Seattle, focusing on public safety and business activity.

Mayor Harrell acknowledged the impact of the fentanyl crisis on slowing the return of vitality downtown:

“Essential to any long-term neighborhood revitalization is safety and health: The fentanyl crisis on our streets is causing death and disorder — we have an obligation to do more for those suffering from substance use issues and for all neighbors.”

The Mayor’s executive order will direct the Seattle Police Department to focus on stopping the distribution of fentanyl and other street drugs by working more closely with other local and federal law enforcement agencies. The order also expands substance abuse treatment resources by creating a pilot overdose response unit in the Seattle Fire Department’s Health One program and using gift cards to incentivize people experiencing substance abuse to join a 12-week treatment program.

Read the entire article

ORC Report: An Assessment of a Persistent and Growing Threat

The National Retail Federation (NRF) commissioned a report from K2Integrity, an international investigative, compliance, and cyber defense services firm.

An Assessment of a Persistent and Growing Threat, is a comprehensive analysis that delves into the intricate world of US-based Organized Retail Crime (ORC) groups, exploring their strategies, methodologies, and connections to wider ORC networks and related criminal activities. The report aims to shine a light on the current understanding of ORC and expose the knowledge gaps that remain. By raising awareness of ORC threats and activities, it strives to assist media coverage and promote advocacy for federal legislation that tackles ORC, including the Combating Organized Retail Crime Act of 2023 (S. 140/H.R. 895).

Read the key findings

Online reviews can impact retailer’s bottom line

Consumers view online reviews of brands and retailers as a two-way dialogue and want brands to participate. Shoppers also view ChatGPT and the Metaverse as opportunities for retail innovation.

Those are top findings from a Chatmeter survey that polled 1,369 consumers, according to a press release.

Additional findings include:

• Over 89% of respondents use online reviews to evaluate quality, and over 67% see it as an important part of deciding what to buy and want specific details such as pricing, features, options and quality.
• More than 56% of respondents feel reviews need to be posted within the past month to be trusted as relevant; only 6% believe that when a review is posted doesn't matter.
• 25% of respondents want to see more than 20 reviews in the last two-months in order to build trust and have influence; another 20% want to see at least 11 reviews.
• 39% of respondents like the idea of using technology like ChatGPT for review information, and more than 30% of respondents like the idea of brand reviews through an engaging Metaverse experience.
• Almost 13% of respondents use gaming platforms like Roblox or games like Fortnite for reviews, and more than 20% use chat tools.

Read the full article

Target's private labels: A 40-year success story

For the past 40 years, Target has successfully cultivated a loyal customer base, partly due to its innovative private-label offerings. Target's owned-brand strategy is considered a gold standard in retail, with its private products garnering a following through social media platforms like Pinterest, Instagram, and TikTok.

Target's private brands, which account for a third of its merchandise, generated over $30 billion in sales last year, growing faster than its overall sales. As consumers have dealt with high inflation, they have sought-out affordable yet stylish options, making private brands even more crucial. Retail consultants and analysts suggest that Target has an opportunity to capture more market share in 2023, as long as they avoid pitfalls like copying other brands too closely or replacing beloved brands too hastily.

Since launching its first owned brand, Honors, in 1984, Target has developed more than 45 brands across all product categories. The company's largest owned brand, Good & Gather, generated more than $3 billion in sales last year, with around 60% of its products priced under $5. Target differentiates itself by gathering customer feedback and crafting unique concepts with its in-house design teams, rather than replicating national brands.

As Target continues to expand its private label offerings, it remains focused on providing customers with stylish, high-quality products at affordable price points.

A history of Target-branded offerings includes:

Read the entire article

Stay prepared and save lives: The importance of learning first aid in the workplace

Accidents and emergencies can happen at any time. Whether it’s a minor cut or a life-threatening situation, knowing first aid can make a significant difference in ensuring the safety and well-being of those around us. Employees must learn basic first-aid skills to create a safer workplace.

According to WAC 296-800, Washington businesses must have certified first aid personnel on hand as it helps ensure the safety and well-being of employees, customers, and visitors in the workplace.

This requirement may seem like a well-kept secret to employers because it is the seventh most cited item by L&I’s safety inspection. Providing first-aid training to ensure that at least one is on-site during all hours of operation could help “stop the bleeding,” financially and physically.

Compliance should not be the sole motivation, however. Management’s commitment to safety preparedness motivates employees to take proactive steps in preventing accidents and knowing what to do in emergencies. This can help improve morale, which leads to higher job satisfaction and increased productivity.

First-aid training equips employees with the skills and knowledge to respond to and treat injuries such as falls, cuts, and other accidents in the workplace or at home. Providing immediate care before professional medical help arrives can significantly reduce the severity of injuries and save lives.

Our safety team is available to help members elevate their safety practices from simply meeting requirements to implementing quality safety measures. To learn more, contact us at 360-200-6454, or safety@waretailservices.com.

WR diversity statement

WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.

We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.