Retailers are finding that as their business expands to encompass new stores, food-service options and consumer-specific data base programs, the potential for lawsuits grows as well.
think there's cause to be very careful in how one deals with information that at least the public might consider confidential, whether the courts are recognizing any right of privacy or not," said David Rutstein, senior vice president and general counsel for Giant Food.
"We've taken a lot of steps here to avoid programs where there might be some question in the consumers' minds that their legal rights have been violated," he said.
Currently, no laws prohibiting the compiling or sale of consumer-specific data exist but several attempts have been made at the state and national level to regulate data base programs. Most recently, a bill was introduced in the House of Representatives that would let consumers determine what information is being collected on them and prohibit it from being gathered or sold.
Other retailers are concerned that the increased use of in-store restaurants and other food-service options could expose a retailer to a greater risk of food contamination lawsuits.
"Those cases are becoming more common as supermarkets offer a greater selection of takeout and prepared foods," said Michael Barrett, director of risk management and benefits for Raley's, West Sacramento, Calif.
Any supermarket planning to get into the prepared foods area must involve its lawyers and risk management department in the planning stages, said Steve Radcliff, director of risk management for Dierbergs Markets, Chesterfield, Mo.
"Any time you deal with perishable items, whether it's deli, bakery or produce, it increases the risk" of lawsuits, he said. "It's important that the risk management department's involved in assessing those risks early on and making sure there are reasonable controls on product" quality.
Lawsuits are even threatening new store openings in some areas. Many new supermarket proposals in northern New Jersey, for example, wind up contested in the courts by competing retailers.
"A type of lawsuit that was probably nonexistent seven or eight years ago but is pretty prevalent today is supermarkets hiring attorneys and other legal experts to oppose one another's applications for new stores," said Frank Sauro, general counsel for Village Super Market, Springfield, N.J.
"In northern New Jersey practically every new supermarket application that's proposed has competing supermarkets hire lawyers to oppose it," he added. "It is now totally widespread."
