For manufacturers wanting to be in compliance with the California Transparency in Supply Chains Act, the devil is in the "where-to-disclose" details.
Back to Basics: So What is a Homepage Under the California Act?
The California Act unfortunately fails to define what it means by "homepage." True, the term "homepage" may seem too obvious to necessitate definition. But what to do about a mobile app, a flash introductory page, or different entry-points for different divisions?
Even if a company's homepage is obvious, moreover, its marketing or web design department may closely guard it, making changes -- even those prompted by black & white legal requirements -- a challenge.
To begin our hunt for guidance, we first look to other California statutes. The word "homepage" is, indeed, scattered throughout the California Code. More specifically, at least three statutes provide some clarification as to what California considers to be a "homepage":
- Requiring a company to link to privacy rights refers to "the homepage or the first significant page after entering the website" (California Business and Professional Code § 22577);
- Requiring a company to post medical product recall notices on "the homepage or first point of entry of its website" (California Health and Safety Code § 1368.015);
- Requiring a link to a grievance form describes a homepage as "the first page or welcome page of an Internet website that serves as a starting point for navigation of the Internet website" (California Health and Safety Code § 108046).
Distilling the above into practical guidance -- always a challenge -- we believe that any webpage that is the gateway to a subject company's website must include a conspicuous link to its Act disclosures. This, moreover, includes all platforms, from a consumer's desktop to his or her mobile device.
If a consumer is using a webpage screen, no matter the size or nature of the screen, as a gateway to access the rest of the site, that first point of entry must include a link to the company's disclosures.
What Does it Take for a Link to be "Conspicuous and Clearly Understood"?
As with the term "homepage," the Act does not define "conspicuously and easily understood." In search of an answer, we return to California's privacy rights disclosure law. Under this law, a company must "conspicuously post" its privacy policy on its website, either on the homepage or linked from the homepage. California's privacy rights disclosure law provides that linking icons or text must:
- Include the word "privacy";
- Use a color contrasting with the background color or is otherwise distinguishable;
- Be in capital letters equal to or greater in size than surrounding text;
- Be so displayed that a reasonable person would notice it.
Although the language is not identical, the intent appears to be on all fours. Best-practice compliance with the California Act, therefore, likely requires a company to include on its homepage (1) a clearly labeled link, (2) in contrasting colors, (3) in a reasonable location, and (4) of approximately the same size as other links surrounding it. The subject company, moreover, need not use the complete name of the law, but should shorten the link in a way that is easily understood (e.g., "CA Supply Chains Act" or "Transparency in Supply Chains" instead of an acronym "CTSCA").
What's the Rush?
To date, the California Attorney General has not opted to seek injunctive relief under the Act against any company. But change is clearly in the air.
No later than November 30, 2012, the California Franchise Tax Board was required to finalize and transmit to the Attorney General its working list of companies subject to review. With this (non-public) list now complete and turned over, and given how much of a compliance "hot topic" human trafficking and force labor have become, the smart money is on enforcement starting sooner rather than later.
Of course, comprehensive compliance with the California Act cannot be achieved by simply putting the appropriate link in the appropriate place. But, for starters at least, this is certainly a first step in the right direction.
Elizabeth Breakstone is an associate in the Corporate Governance and Transactions and Emerging Companies groups at Perkins Coie and a member of the firm's Corporate Social Responsibility and Supply Chain Compliance Practice.
T. Markus Funk is a White Collar Defense and Internal Investigations partner at Perkins Coie, where he co-heads the firm's Corporate Social Responsibility and Supply Chain Compliance Practice. He is also the co-author of Child Exploitation and Trafficking: Examining the Global Challenges and U.S. Responses (2012, co-authored with Chicago U.S. District Judge Virginia M. Kendall), serves on the ABA's Presidential Anti-Trafficking Task Force, and is the co-chair of the ABA's Corporate Social Responsibility and Forced Labor Task Force. From 2000-2010, Markus was a federal prosecutor in Chicago, and from 2004-06 he lived in Pristina, Kosovo where he led USDOJ and State Department efforts to combat human trafficking and corruption.
Paul Hirose is senior counsel with Perkins Coie's Business Litigation practice, where he possesses extensive experience representing clients in a variety of industries. He is also a member of the firm's Corporate Social Responsibility and Supply Chain Compliance Practice.
