California Proposition 65 Compliance for Retailers and Their Supply Chain Partners: Are You Up-to-Date on the Revised Warning Requirements?
by Melissa Proctor (Miller Proctor Law PLLC)
Proposition 65 was adopted by the state of California as part of the Safe Drinking Water and Toxic Enforcement Act of 1986. The law prohibits certain chemical discharges into California drinking water, requires warnings about chemicals in certain workplace settings, and requires companies to provide clear and reasonable warnings on certain products. Although Proposition 65 is very well known in California, many companies located outside of California are still not aware of the state law’s broad reach and potential for liability. The law prohibits companies (regardless of whether they are located in California or elsewhere) from knowingly or intentionally selling a product in California that could expose consumers there to a chemical that is identified on the Proposition 65 List of Chemicals—those that are known to cause cancer or reproductive harm. This mandate applies to all companies in the supply chain of the products, from raw material suppliers, manufacturers, distributors and retailers. There are a few exemptions from this broad prohibition, however. For example, the Proposition prohibition on products does not extend to, among other, government agencies and utilities, companies that have ten (10) employees or less, and entities that use chemicals but their exposures do not pose any significant risks of cancer or reproductive harm.
Proposition 65’s List of Chemicals currently contains over 900 naturally occurring and synthetic chemicals, and new chemicals are added yearly. If a product that is sold in California contains a listed chemical, a consumer product warning may be required. However, some chemicals have an established daily exposure level (i.e., safe harbor level). Safe harbor levels have been established for roughly 300 products. Consumer product warnings are not required if a product contains a listed chemical with an exposure level below the specified safe harbor level. The Proposition 65 list of chemicals can be found on the website of CA's Office of Environmental Health Hazard Assessment or OEHHA.
In August 2016, the California legislature revised the Proposition 65 mandates –those new requirements took effect on August 30, 2018. As part of the revision, the legislature clarified the roles and responsibilities of product supply chain partners and held that it is the manufacturer, distributor, importer and supplier that is required to take steps to comply with the law. The primary responsibility for providing Proposition 65 product warnings falls on the manufacturers, producers, packagers, importers, suppliers and/or distributors. Proposition 65 generally provides manufacturers (and others in the supply chain) with 2 options for compliance with the warning requirements. They can either affix an appropriate warning to the product, or they can provide written notice to the retailer regarding the required warning for the product and provide the actual warning materials that will be used.
The retailer must issue an acknowledgment that it received the notice and materials, and is thereafter responsible for placement and maintenance of the warning materials they have received. If the retailer fails to post the warning or obscures it, only then will liability fall on the retailer for failing to warn consumers. However, retailers will retain primary responsibility for providing a warning when they sell a product under its own brand or trademark owned or licensed by the retailer or an affiliated entity, or if the retailer adds the listed chemical to the product.
New warning language requirements also took effect on August 30, 2018. Previously, the product warnings were informative only and many companies adopted a compliance strategy whereby they labeled and marked everything with a Proposition 65 warning—even when they did not know whether the products actually contained any listed chemicals or not. These warnings were found to no longer be effective, and the California legislature decided to make the warnings more useful. The new warning requirement applies to products that were made or manufactured on or after August 31, 2018. So, if there are products currently sitting on store shelves that contain the old Proposition 65 warning language, they can continue to be sold as long as the original warning was compliant with the previous rules.
The new warning format for products that contain listed chemicals that cause cancer requires the placement of a black and yellow (or black and white) triangle containing an exclamation point. The triangle symbol can be downloaded directly from the OEHHA’s website. The symbol must be followed by the following legend:
WARNING: This product can expose you to chemicals including lead which is known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.
As shown above, the warning language must name at least one chemical. If the product contains multiple cancer-causing listed chemicals, there is no guidance provided under the new rules as to which chemical you should disclose in the warning – there is no requirement that you list the most prevalent of the listed chemical when selecting the one to identify.
Where a product contains listed chemicals that cause reproductive harm, the new warning format must also contain the triangle symbol noted above followed by:
WARNING: This product can expose you to chemicals including Bisphenol A (BPA) which is known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.
Again, the warning language must name at least one chemical.
If a product contains listed chemicals that both cause cancer and are reproductive toxins, then at least one of those chemicals must be listed for both reasons of concern. For example, the triangle symbol noted above must be followed by:
WARNNG: This product can expose you to chemicals including Lead which known to the State of California to cause cancer, and Bisphenol A (BPA) which is known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.
An alternative short form warning option is available for smaller products, as follows—
If you use the alternative short form, the font size must be at least 6pt but cannot be smaller than other customer information provided on the product, such as other warnings, directions and ingredient list.
In addition, if the product’s label provides information in more than one language, then the Proposition 65 warning is must also be provided in those languages as well.
Companies can also choose to add more information to the warning language (e.g., how to lessen or avoid exposure, etc.), but that additional language should not dilute or lessen the effect of the warning.
For internet purchases, warnings must be provided by including the warning statement itself or a clearly marked hyperlink using the word “WARNING” on the website product display page. In the alternative, the warning can be prominently displayed to the purchaser prior to the completion of the purchase. In addition to ensuring that the warnings are posted on their website, the retailers must also ensure that the customers receive the warning through the traditional methods related to the sale of consumer products. Further, for catalogues, the warnings should be placed near the description of the item.
In terms of Proposition 65 compliance programs, there is no prescribed method for designing and implementing compliance processes for the Proposition 65 requirements. For example, companies can test for all listed chemicals that may be contained in their products, which may be impractical as it would be very costly and time consuming given the number of chemicals currently on the list and the fact that other chemicals are added every year. As a result, many companies test their products selectively, looking for the common listed chemicals are used in their types of products (e.g., lead, cadmium, phthalates, etc. in textile apparel and footwear, BPA in plastic bottles and accessories, etc.). Other companies choose to look closely at Proposition 65 settlement cases involving products that are similar to their won, formulating their products based on those agreed-upon chemical limits or issuing warnings based on testing performed to those agreed-upon settlement levels.
For retailers, compliance strategies may include:
- Requiring suppliers to indemnify and hold them harmless for Proposition 65 violations.
- Confirming that their existing insurance existing policies cover them for Proposition 65 lawsuits.
- Assigning Proposition 65 responsibilities to company stakeholders.
- Implementing an internal Restricted Substances List or adopting a third-party created list.
- Requiring suppliers to provide documentation evidencing testing and compliance.
- Conducting regular risk assessments and internal audits, which can be performed by third parties.
- Verifying and tracking supplier compliance.
- Integrating supplier compliance into sourcing decisions.
- Incorporating compliance and certification requirements into new supplier vetting process.
- Establishing processes for working with supply chain partners on providing warnings.
- Establishing a process for issuing acknowledgments to suppliers.
- Providing regular training for company personnel.
- Rolling out record retention processes specific to Proposition 65 supporting documentation.
- Documenting all Proposition 65 policies and procedures in writing.
For suppliers, manufacturers and distributors, compliance practices may include:
- If feasible, negotiating language in their terms of sale or supplier agreements that requires retailers to notify the supplier of the receipt of any non-marked products that trigger Proposition 65 warning requirements—in this case, the supplier may accept the return of the products and replace them with marked products or provide labels to the retailer to apply to them directly.
- Requesting retailers to provide certifications confirming that they have received the warning notices and marking materials, and have marked or displayed those warnings.
- If feasible, negotiating with the retailer the assignment of separate SKU’s for products that trigger Proposition 65 warning requirements and having them segregate orders placed with the suppliers so that only products marked with the required warnings are delivered into California.
- If feasible, having the retailer agree to indemnify the supplier in the case of Proposition 65 claims.
- Implementing an internal Restricted Substances List or adopting a third-party created list.
- Assigning a dedicated person to assume responsibility for managing chemicals used in products, reviewing them prior to purchase, and managing them in the workplace.
- Rolling out testing protocols and providing compliance documentation relating to downstream supply chain partners upon request.
- Performing regular risk assessments and audits.
- Adopting process for providing warnings and notifying California retailers.
- Establishing formal record retention processes.
- Providing regular training for personnel, suppliers and subcontractors.
- Documenting all policies and procedures in writing.
Above all, in order to stay updated on developments in the Proposition 65 arena, retailers and their supply chain partners should read and review proposed rules, as well as proposed amendments to the legislation and regulations. They should also work to identify listed chemicals commonly used in their types of products. They can review 60-day notices that are filed with the California’s Attorney General and settlements that affect products that are similar to their own to identify what kinds of products are being targeted and what chemical limits have been agreed upon by the parties.
Melissa Proctor is the founder of Miller Proctor Law PLLC, an international trade law firm located in Scottsdale, Arizona. For more than twenty years, she has advised companies on the full of array of international trade issues, imports, exports, embargoes and economic sanctions, anti-corruption compliance, and other agency requirements that impact the cross-border movement of goods, information and services. She may be reached at 480-447-8986 or firstname.lastname@example.org.
 To access the list, see: https://oehha.ca.gov/proposition-65/proposition-65-list.