In 2010, the California legislature passed the California Transparency in Supply Chains Act (the “Act,” codified in California Civil Code section 1714.43). The law aims to assist consumers in making ethical and informed choices about the products they buy. To this end, this law mandates that large California businesses publish information on their “efforts to eradicate slavery and human trafficking from [their] direct supply chain for tangible goods offered for sale” on their website.

This law applies only to businesses that have annual worldwide gross receipts of more than $100 million and identify themselves as a retail seller or manufacturer on its California income tax return. Furthermore, the law requires disclosures in respect to five areas: verification, audits, certification, internal accountability, and training. Attorney General Kamala Harris released a resource guide on April 13, 2015, that provides recommendations for developing these disclosures. However, while the Act requires disclosure of such information, it does not mandate the company to implement new measures to ensure their product supply chains are free from human trafficking and slavery.

Previously, this Act was not enforced aggressively. However, in late May 2015, the California Attorney General’s Office sent final warning letters to companies not in compliance with the Act. These letters state noncompliance could result in an enforcement action by the Attorney General’s Office.

For any questions regarding the Act, please contact Steve Churchwell at (916) 468-0945 or steve@whitebrennerllp.com.