In a move that could well alter the fabric of the textile industry, the FTC is proposing changes to its Textile Labeling Rules.  The rules implement the Textile Fiber Products Identification Act, which taken together, require marketers to attach a label to each covered product disclosing certain fiber and manufacturer information.

In November 2011, the FTC sought public comment on the Rules as part of its regular review of all current FTC rules and guides.  In response to the comments received, the FTC has released its proposed changes designed to clarify and update the Rules. Overall, the amendments are supposed to make the Rules more flexible, giving businesses more compliance options without imposing significant new obligations.  Below are the highlights woven into the proposed changes:

1. Fiber Names

The Rules require that product labels identify manufactured fibers using the fiber’s generic names.  The proposed changes would ease barriers to international trade by permitting fiber names used in the revised International Organization for Standardization’s standard for man-made fiber names.

2. Hang-Tag Disclosures

Currently, the Rules require a full and complete fiber content disclosure on product hang-tags.  The FTC proposes revising this rule to allow truthful non-deceptive information about fibers on hang-tags, as long as the product has a label with full fiber content information as required by the Act and Rules.  To prevent any consumer confusion, unless the hang-tag discloses the product’s full fiber content or the product is entirely made of that fiber, the FTC would require a disclosure such as:  “This tag does not disclose the product’s full fiber content” or “See label for the product’s full fiber content.”

3. Country of Origin Disclosures

The Rules require labels to disclose the country where the product was processed or manufactured.  Recognizing differing views on how to determine the country of origin, FTC’s amendments would clarify that U.S. Customs law is the decisive factor.

4. Guaranties

The Act provides that a business can avoid liability for selling a misbranded textile product if it received a good faith guaranty from the supplier that the product is not misbranded.  The proposed amendment would require an annual certification in place of the current requirement that suppliers provide a guaranty signed under penalty of perjury.  The annual renewal process would ideally encourage guarantors to take steps to ensure they’re still in compliance over time and thereby increase the guaranties’ reliability.  Retailers could only get such guarantees from domestic manufacturers or domestic companies that import goods and could not take advantage of the safe harbour if the retailer imported goods itself.  As we noted before, earlier this year the FTC announced an enforcement policy under which the agency will not bring an enforcement action against a textile importing retailer as long as the retailer does not add to or embellish the claims of the manufacturer and the retailer does not sell the goods as private label unless the retailer knew or should have known the products do not comply with the Textile Act.  This policy is reiterated in the federal register notice.

The FTC is currently seeking comments on the costs and benefits of the proposed changes.  Comments must be received by July 8, 2013.