Digest 02.20.2020: Wendy’s: All the Goodness, But Hold the Alleged Child Labor Violations

Labor & Employment

Wendy’s: All the Goodness, But Hold the Alleged Child Labor Violations

  • Massachusetts AG Maura Healey reached a settlement with fast food restaurant chain Wendy’s International LLC (“Wendy’s”) to resolve allegations that Wendy’s labor practices violated Massachusetts child labor laws.
  • According to the AG’s office, Wendy’s allegedly incurred more than 2,100 violations in its Massachusetts restaurants, including minor employees working too late or too many hours per day.
  • Under the terms of the settlement, Wendy’s undertook changes to its labor practices, including modifying its scheduling system to flag the scheduling of minors, issuing all minor employees a red visor to alert managers of their age, instituting daily checklists, and undertaking training and auditing programs. Wendy’s also agreed to pay $200,000 to a fund administered by the AG’s office that creates education programs about child labor as well as provides training for young workers.
  • As previously reported, AG Healey also recently settled with Chipotle Mexican Grill, Inc. to resolve allegations of child labor laws violations in its Massachusetts restaurants.

Consumer Protection

FTC: No Scientific Proof that These Pills Can Grow Bones and Alleviate Joint Pain

  • The Federal Trade Commission (“FTC”) sued supplement company ZyCal Bioceuticals Healthcare company, Inc. and a related individual (collectively “ZyCal”), and separate a marketing company Excellent Marketing Results, Inc. and a related individual (“EMR”) for using deceptive marketing practices to promote pills for alleviating joint pain in violation of the FTC Act.
  • The FTC’s complaint alleges that the pills sold by both defendants included the active ingredient Cyplexinol, which defendants falsely claimed – without scientific evidence – relieves joint pain by growing new bone and cartilage. The complaint also alleges that the companies used deceptive testimonials about the benefits of the pills in their marketing materials.
  • In the pending suit against ZyCal, the FTC seeks injunctive relief, rescission or reformation of contracts, restitution, refund of monies paid and disgorgement. The FTC settled with EMR, and the proposed stipulated order enjoins EMR from making false health claims and imposes a $3.6 million judgment, which will be partially suspended upon payment of $145,000 to the FTC to be used for refunds for consumers.

Beware of “Trainings” That Promise to Make You Money in Any Market

  • The FTC sued an online investment training company OTA Franchise Corporation and related companies and individuals (collectively “OTA”) alleging that OTA ran a scheme which used false or unfounded earnings claims to sell investment training programs in violation of the FTC Act and the Consumer Review Fairness Act.
  • The complaint alleges that, among other things, OTA falsely claimed that it had a patented strategy to generate income by trading on the financial markets regardless of market conditions, that its sales people falsely held themselves out to be successful traders, that OTA targeted older consumers, charging them as much as $50,000 for its programs, and that OTA required consumers to sign non-disparagement agreements as a condition for issuing refunds. The complaint also alleges that OTA’s scheme has collected more than $370 million from consumers.
  • The complaint seeks injunctive relief, rescission or reformation of contracts, restitution, refund of monies paid, disgorgement, and the costs of bringing the action.

FTC: If Someone Promises to Make You Rich Online, Make Sure It Is Not a Scam

  • The FTC reached a settlement with an international online business coaching company MOBE Ltd. and its founder Matthew Lloyd McPhee (collectively “MOBE”) to resolve allegations that the company used deceptive marketing practices to sell coaching packages about online entrepreneurship in violation of the FTC Act.
  • The FTC’s complaint, which named other individuals and entities as defendants, alleged among other things, that MOBE used misleading online ads, social media, and live-event presentations that promised to teach consumers how to reach six-figure incomes as successful online entrepreneurs, then charged tens of thousands of dollars for worthless program upgrades.
  • Under the terms of the stipulated final order, MOBE is permanently enjoined from selling business coaching programs and investment opportunities, and McPhee is required to pay more than $16 million to the FTC. McPhee is also required to surrender his foreign real estate holdings to MOBE’s court-appointed receiver. Previously, the FTC settled with the estate of McPhee’s deceased cofounder, Russell Whitney, requiring the estate to surrender more than $1.3 million to the FTC.

2020 AG Elections

Missouri Attorney General Announces Campaign to Stay in Office

  • Incumbent Republican Missouri AG Eric Schmitt announced his bid for the AG’s office. AG Schmitt was appointed as AG by Governor Mike Parson in January 2019 to succeed Josh Howley, who vacated the AG’s office after winning the November 2018 race for the U.S. Senate.
  • AG Schmitt is being challenged by two Democratic candidates, Elad Gross, a former Missouri Assistant Attorney General, and Richard Finneran, a former federal prosecutor.


Democratic AGs Decry EPA’s Proposed Changes to the Lead and Copper Rule

  • A coalition of 10 Democratic AGs, led by California AG Xavier Becerra, sent a letter to the U.S. Environmental Protection Agency (“EPA”) commenting on the EPA’s proposed amendments to the National Primary Drinking Water Regulation (“NPDWR”) for lead and copper under the authority of the Safe Drinking Water Act, commonly referred to as the Lead and Copper Rule (“LCR”), which sets nationwide standards for drinking water.
  • In the letter, the AGs argue that some of the proposed revisions, including the proposed reduction in the annual replacement rate of lead service lines that connect homes to public water mains, would weaken existing protections against lead in drinking water and would disproportionately impact low-income communities.
  • The AGs further argue that the proposed amendments would include alternative compliance options for “small” water systems – systems that serve under 10,000 customers, which comprise more than 90% of water systems in the United States – that would enable them to continue exceeding the lead action level without undertaking lead service line replacement.