Last week, the Federal Trade Commission (FTC) took action against Utah-based Lions Not Sheep Products LLC and its owner Sean Whalen for falsely claiming that its imported apparel is made in the United States.

According to the FTC’s complaint, the company added false Made-in-USA labels to clothing and accessories imported from China and other countries. The company, which sells T-shirts, sweatshirts, and other clothing, promotes through social media that “it’s possible to live your life as a LION, Not a sheep” according to a press release shared by the FTC. While that seems innocent enough, it’s what comes next that landed them in hot water.

The complaint alleges that on Oct. 8, 2020, Whalen published a video of himself to his social media accounts in which he said he could hide the fact that his shirts are made in China by removing the origin tags and replacing them with tags stating that the merchandise was made in the United States.

Additionally, according to the FTC complaint, between the dates of May 10 and Oct. 21, 2021, Whalen and the company acted on the claim and physically removed tags denoting the clothing was made in a foreign country and printed “Made in the USA” on them instead.

Thus, the FTC intervened. According to the press release, the proposed order requires both the brand and Whalen to stop making bogus made-in-the-USA claims, come clean about foreign production, and pay a monetary judgment. More specifically:

  • The payment comes to a grand total of $211,335
  • They must stop claiming that products are made in the United States unless they can prove that the product’s final assembly or processing — and all significant processing — takes place stateside and that all or virtually all ingredients or components of the product are made and sourced here
  • To claim that a product is assembled in the United States, Whalen and Lions Not Sheep must ensure that it is substantially transformed in the United States, its principal assembly takes place in the United States, and U.S. assembly operations are substantial.

In addition, when the FTC issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $46,517.

Whalen has responded to the FTC’s claims, addressing the topic head-on in a Facebook post that was shared on May 13. In the post, the company claims, “Over the last two years that we have been in business, 90% of the apparel we’ve delivered has had the original tags on them.” It goes on to elaborate on its buying processes and practices, refuting the claims made by the FTC.

It seems that it’s coming down to the language that has been used, something that has been an issue before. The Lions Not Sheep Facebook post claims that in August 2021, the FTC changed its guidelines — forcing them out of compliance — but that up until then, they were in compliance.

The new rule did, in fact, go into effect in August of 2021 and is called the Made in USA Labeling Rule. It prohibits claims that a product was made in the U.S. unless final assembly or processing of the product occurs in the U.S., all significant processing that goes into the product occurs domestically, and all or virtually all ingredients or components of the product are made and sourced in the U.S.

Relabeling products is not a new practice to the world of decorated apparel, there are just certain rules to be aware of. While they are intricate and require studying, in a nutshell, the FTC requires labeling that shows what the garment is made of (fiber content), where it was made (country of origin), and company identification.

You can watch the original video here.