A new federal law will require food makers to disclose when foods contain genetically modified ingredients.

The law, which was recently signed by President Obama, will require such food products to be labeled with text, a symbol, or an electronic code readable by smartphone indicating the presence of GMOs. Small businesses will also have the option to label food products with a telephone number or Internet website directing customers to additional information.

The U.S. Department of Agriculture (USDA) has two years to draft regulations concerning which products require such disclosure, and additional details concerning what food makers must do to comply. After the regulations are finalized, food makers will have at least another year before the law takes effect.

Law preempts state and local GMO labeling laws.

The federal law preempts a similar Vermont law, Act 120, that took effect in July, as well as any other state or local GMO disclosure laws. The Vermont Attorney General’s office has announced it will suspend enforcement of Act 120.

Critics of the federal law, including Vermont’s congressional delegation, argued that it falls short compared with Vermont’s tougher labeling law requiring all foods with GMO ingredients to be labeled “produced with genetic engineering.”

Supporters of the federal law, including many in the food industry, say it avoids a state-by-state patchwork of laws in favor of a national disclosure solution.

Law will be federally enforced, but may fuel private lawsuits.

The law will be administered and enforced by the federal government, through the USDA. Although the law does not include a private right of action, it is likely to fuel lawsuits by private plaintiffs arguing that failure to comply constitutes false advertising under state laws. In recent years, such plaintiffs have challenged scores of products labeled as “natural” that contain processed or artificial ingredients, and even GMOs – causing the food industry to pay millions in class action lawsuits and scrutinize their product labels for potential liability risks.

Certain businesses and products are exempt from disclosure.

For small or very small packages, the USDA can provide alternative reasonable disclosure options. Food served in a restaurant or similar retail establishment, as well as very small food manufacturers, are excluded from the disclosure requirements. The law does not define “small food manufacturer,” “small or very small packages,” “very small food manufacturers,” or “similar retail food establishment,” which will be defined in accompanying regulations.

Significantly, the law does not require disclosure of any food derived from an animal solely because the animal’s feed was produced from, or contained, a bioengineered substance. Moreover, not all foods containing bioengineered substances will be subject to the disclosure requirement; the law gives the USDA authority to determine the amount of a bioengineered substance present before disclosure is required.

Open questions remain regarding Act 120, Vermont’s labeling law.

Although the Vermont Attorney General’s office has indicated that they will not enforce Act 120, questions still remain. First, Act 120 also contains standards regarding use of the term “natural.” The new federal GMO law does not address the term “natural,” and thus questions remain about whether that portion of Act 120 is preempted and still enforceable. Second, even absent state enforcement, private claimants had rights to assert actions under Act 120 beginning in July of 2017, and it is possible that a private claimant will challenge federal preemption or still seek to enforce the “natural” labeling rules of the state law.