Dive Brief:

• Macy’s is facing a class-action lawsuit, filed last month, that alleges “coercive collection practices” of minority shoppers.

• The suit is based on an incident described by one customer, who says she was detained in a holding cell at Macy’s in New York after a security guard accused her of stealing shirts, held and questioned for three hours by store employees, deprived of her phone, and forced to sign papers admitting to guilt and to pay a $100 fine. The class-action lawsuit alleges that thousands of other minority customers have been treated in a similar matter by Macy's. 

• Macy’s says it has followed the law in this case and others.

Dive Insight:

Macy’s may have greater leeway in New York in detaining customers it suspects of shoplifting because the state has codified the common law concept of “shopkeeper’s privilege,” which acknowledges the rights of store owners to detain people stealing from them, into actual law. 

That law also allows a retailer to levy fines against shoplifters, even if they’re not eventually found guilty of larceny, and thereby gives retailers a fairly strong defense against charges like these of unlawful detention.

But experts have noted that the law as written also depends heavily on the concept of “reasonableness,” noting that retail employees must have “reasonable” suspicion of theft and that shoppers can only be detained for a “reasonable” amount of time, for example.

While New York’s shopkeepers law appears weighted to the advantage of retailers, the courts have frowned on lengthy detentions of shoppers. And no “shopkeeper’s privilege” applies if a retailer is found to apply its actions more often to minorities than to white shoppers.

Indeed, last summer department store Barney’s paid a hefty fine and agreed to change its practices after an investigation by State Attorney General Eric Schneiderman’s office found a pattern of racial profiling in scrutinizing and detaining shoppers. That retailer still faces lawsuits over the matter.