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From Products Liability Law Daily, May 28, 2015

Office Depot agrees to $3.4 million civil penalty for failure to report defective office chairs

By John Dumoulin

Office Depot Inc., of Boca Raton, Florida, has agreed to pay a civil penalty of $3.4 million to settle allegations by the Consumer Product Safety Commission that the company knowingly failed to report to CPSC, as required by federal law, defects and an unreasonable risk of serious injury concerning two models of office chairs—the Quantum and the Gibson. In agreeing to the settlement, which was provisionally accepted by the Commission, Office Depot did not admit to violating the law (CPSC Recall Notice, No. 15-150, May 27, 2015).

Background. Office Depot sold the Quantum chairs nationwide between May 2006 and August 2009, and it sold the Gibson chairs nationwide between 2003 and 2012. Office Depot received dozens of reports of seatback failures and related injuries involving both the Quantum chairs and the Gibson chairs. Office Depot never reported the Quantum chair hazard to CPSC, and it reported the Gibson chair hazard only after receiving a request from CPSC staff. By the time the Quantum chair (CPSC Release, No. 10-013, October 16, 2009) and the Gibson chair (CPSC Recall Notice, No. 14-188, May 22, 2014) were recalled, Office Depot had received 33 and 153 reports, respectively, of seatback detachment from the chairs, and 14 and 25 reports, respectively, of injuries.

CPSC’s response. Regarding the settlement, CPSC Chairman Elliot F. Kaye stressed that there must be accountability for Office Depot since the company had received information about nearly 200 incident reports and more than 35 injuries regarding the chairs, but did not report the information to CPSC as required by law. Kaye said that “Office Depot failed to take responsibility and care for the safety of their customers. While this well-deserved civil penalty is not even close to the level Congress authorized and expected when enacting the Consumer Product Safety Improvement Act, I have put violators on notice that we will seek much higher penalties, as appropriate.”

Commissioner Joseph P. Mohorovic voted against the settlement, saying he had concerns with the penalty amount and how that figure was determined. Mohorovic said that the Gibson Chair case was the “primary driver” of the settlement amount and that the agency’s “statutory factors would suggest this should result in a low penalty.” He contended that the likelihood of injury, the potential for serious injury, and the number and nature of the injuries were not sufficient to warrant such a high penalty. He also noted that the population at risk was not a vulnerable population, such as children or the elderly.

Compliance program. In addition to paying the $3.4 million civil penalty, Office Depot has agreed to maintain an internal compliance program to ensure that the company complies 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 must also 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.

Companies: Office Depot Inc.

MainStory: TopStory IndustrialCommercialEquipNews

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