Legally Bombed: Reese Witherspoon’s Clothing Company Earns Failing Grade on ‘Free Dress’ Giveaway

Advertising Law

As it turns out, Elle Woods apparently skipped taking that elective course in advertising law while she was attending Harvard Law School because, in real life, Reese Witherspoon’s Draper James clothing company failed to disclose to teachers hoping for a free dress that it was offering a sweepstakes and not a giveaway.

Back in April, Draper James—the clothing line of my favorite Hollywood actress, Reese Witherspoon (I have a daughter named Reese, in case you need proof)—conducted a promotion on Instagram offering teachers a free dress, which has resulted in a real-world legal problem by way of a class action lawsuit alleging the dress offer was bogus.

In an Instagram post, Draper James thanked teachers for their work during the COVID-19 pandemic and explained that, to show their gratitude, Draper James “would like to give teachers a free dress.” Media outlets including The Today Show and Good Morning America helped publicize the promotion, reporting that the brand was “giving free dresses to teachers.” In fact, the brand had only 250 dresses to give away, so not every teacher would be getting a dress. Teachers were instructed to apply by the stated deadline, and the application process required that teachers provide their personal contact information, as well as a copy of their employee badge and work email address.

Most teachers believed that they would receive a free dress provided they applied, but after receiving close to 1 million requests, Draper James decided there would instead be a random drawing to give away the 250 dresses they had planned to award as part of their original “while supplies last” offer. While the structure for giving away the dresses ended up being a pretty straightforward sweepstakes, Draper James messed up from the get-go by not posting official rules or otherwise including in the call to action advertising disclosures advising teachers that not every single teacher would receive a dress and that the dresses would be awarded through a random drawing. Although the Instagram post contained caveats that the “offer [was] valid while supplies last[ed]” and that the “winners” would be notified, the advertising for the offer did not disclose that only 250 teachers would receive a free dress. In order to legally offer a “while supplies last” promotion, advertisers should have enough of the promised item to meet the expected demand for the offer. Clearly 250 dresses to give away was not enough to meet the expected demand for the dresses given that the company received close to a million requests.

After Draper James realized it had messed up, and with a clear public relations disaster on its hands (see https://pagesix.com/2020/04/15/reese-witherspoons-draper-james-slammed-for-dress-giveaway-gone-wrong/), the company announced that the offer was actually a sweepstakes and provided all entrants with a coupon for 20% to 30% off a future purchase. Of course, the inevitable resulted: teacher backlash in the way of complaints, angry comments on social media, and most recently a class action alleging, among other things, breach of contract and violation of the California Consumer Legal Remedies Act and Unfair Competition Law.

The complaint, initially filed in Los Angeles County Superior Court but removed recently to the U.S. District Court, Central District of California, alleges that Draper James made an offer, promising new dresses in exchange for entrants providing their personal contact and employment information, and then breached that promise. That entrants, even if they did not receive a free dress, were added to the brand’s email marketing database only added fuel to the class action fire. The plaintiffs seek restitution and disgorgement, as well as injunctive relief.

Why it matters: In addition to complying with sweepstakes laws, brands must be cognizant of how consumers will perceive their offers and promotions. On its face, Draper James had good intentions of trying to do something special for teachers while we all struggle through the ongoing pandemic. However, by not involving a lawyer familiar with promotional law early on in the process and certainly before going live with the Instagram post, Draper James received considerable consumer backlash and now faces a consumer class action that could have very easily been avoided by structuring the offer as a sweepstakes from the beginning and by posting official rules and including legally required advertising disclosures on the initial Instagram post. It is crucial that all offers and promotions, including sweepstakes, have a comprehensive set of official rules and very clear and conspicuous abbreviated disclosures that accompany both promotional marketing copy and the entry registration flow.

When running a promotion where products will be given away or awarded to consumers, it is important that you be clear about the details of the promotion in the call to action and advertising copy, even if it is being promoted only on social platforms. Many consumers will not read the details provided in the official rules, so make sure they have all the information they need in the advertising copy or social media post so they can easily understand the structure of the promotion. It is usually very easy to make it clear that not everyone will win with phrases like “random drawing” or “enter for a chance to win.” Additionally, be sure to include abbreviated disclosures in all advertising and entry materials, including on social media calls to action, that link to the full official rules for the promotion. Also, don’t forget that there are social media platform promotion guidelines that must be complied with, and you may need to register and/or bond your sweepstakes in certain states prior to public announcement.

Additionally, one interesting issue that sweepstakes nerds like me may finally get an answer to in the Draper James class action (provided it doesn’t settle) is whether the provision of personal information for marketing purposes constitutes consideration, thereby transforming a legal sweepstakes into an illegal lottery. To the extent that the provision of marketing data by a consumer clearly becomes the equivalent of monetary consideration (paying money to enter) in a case decision, it will be a game changer for the promotional marketing industry.

Thus, before launching a promotion that contains any offer involving a promise of free items or the collection of consumer data, consider whether sweepstakes or contest laws are applicable, whether an alternative method of entry is necessary, and whether a different promotional structure is possible to meet the campaign’s goals. To help with structuring a promotion in compliance with applicable legal requirements, we recommend engaging specialized legal counsel, such as your Manatt Advertising, Marketing and Media team member, as we have decades of experience in complying with the patchwork of international, federal and state laws that regulate advertising and promotional activities like the program offered by Draper James.

manatt-black

ATTORNEY ADVERTISING

pursuant to New York DR 2-101(f)

© 2020 Manatt, Phelps & Phillips, LLP.

All rights reserved