Three California residents have filed a proposed class-action lawsuit charging New Balance with misrepresenting advertising claims around its “Made in the USA” footwear.
The suit alleges that the company used buyers’ willingness to pay higher prices for products they believe to be made in the U.S. although the products weren’t fully produced in the U.S. New Balance’s “Made in the USA” sneakers carry retail prices in the range of $164.99 to $399.99.
The suit asserts California laws are stricter than the rest of the country on this kind of labeling. California law prohibits products from featuring ‘Made in the USA’ or similar labels if any single component is foreign-made rather than made in the USA, according to the lawsuit. According to federal law, parts of the assembly process can also take place elsewhere, as long as the final stage of assembly occurs in the U.S.
“New Balance publicly acknowledges it advertises that its shoes are Made in the USA, when domestic value is at least 70 percent,” the lawsuit states. “Put differently, New Balance admits that it has a common policy of advertising that its shoes are Made in the USA, even when up to 30 percent of the value of the shoes is attributable to foreign-made components and/or labor.”
The sales violate California laws including those governing false advertising and unfair competition, according to the complaint filed in U.S. District Court in California. Other consumers who have purchased New Balance shoes in California with a ‘Made in the USA’ label sometime in the last two years are being encouraged to join the lawsuit.
In a statement to the Boston Herald, New Balance said it has “worked diligently to be transparent in its consumer communications, including advertising, packaging and on its website, that where domestic content is at least 70 percent, the brand’s footwear is labeled Made in the USA.”
“The complaint brought forward today by the plaintiffs actually acknowledges New Balance’s extensive efforts in transparency,” the company said.
New Balance also noted its five New England factories employ 1,300-plus workers.
“Some of New Balance’s factories are located in historically industrial areas that have struggled with rising unemployment after the footwear industry and manufacturing moved overseas,” New Balance said. “Although we cannot comment further on the specifics of the case, we will vigorously defend our brand against this lawsuit.”