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$3.4 Million Penalty to Settle CPSC Charges on Defective Chairs

Tuesday, June 02, 2015
Sandler, Travis & Rosenberg Trade Report

The Consumer Product Safety Commission announced May 27 that a Florida company has agreed to pay a $3.4 million civil penalty and take other measures to settle charges that it knowingly failed to report defects and an unreasonable risk of serious injury concerning two models of office chairs. According to a CPSC press release, the seatbacks of both models failed, resulting in multiple back and other injuries. 

Federal law requires companies to report to the CPSC within 24 hours about a consumer product containing a defect that could create a substantial product hazard or presenting a risk of serious injury. In this case, however, the company received dozens of reports of seatback failures and related injuries but never reported the hazard with respect to one chair and reported the other chair hazard only after receiving a request from CPSC staff. By the time the chairs were recalled the company had received a total of 188 reports of seatback detachment and 39 reports of injuries, some requiring medical attention.

The CPSC notes that in addition to paying the penalty the company has agreed that it has and will maintain a compliance program designed to ensure compliance with the Consumer Product Safety Act and a related system of internal controls and procedures. The compliance program must include written standards and policies designed to convey information obtained from sources such as complaints, parts requests and incident reports to personnel responsible for CPSC compliance. The compliance program also must address confidential employee reporting of compliance concerns to a senior manager; effective communication of compliance policies and procedures, including training; senior management responsibility for, and general board oversight of, compliance; and requirements for record retention.

Sandler, Travis & Rosenberg will be conducting a webinar June 11 entitled "CPSC Certification and Testing:  How to Avoid the New Consumer Product Safety Traps."

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