phil&teds USA Agrees to Pay $3.5 Million Civil Penalty, Implement Internal Compliance Program for Failure to Report Defective Clip-On High Chairs

http://www.cpsc.gov/en/Newsroom/News-Releases/2015/phil-and-teds-Agrees-to-Pay-3-Point-5-Million-Dollar-Civil-Penalty-for-Failure-to-Report-Defective-Clip-On-High-Chairs/

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U.S. Consumer Product Safety Commission

Sep 10, 2015, 03:33 ET

WASHINGTON, Sept. 10, 2015 /PRNewswire-USNewswire/ -- The U.S. Consumer Product Safety Commission (CPSC) is announcing that phil&teds USA, of Fort Collins, Colo., has agreed to a $3.5 million civil penalty to settle charges that the company knowingly failed to report to CPSC, as required by federal law, a defect and an unreasonable risk of serious injury concerning their MeToo high chair. In addition, the penalty settles CPSC's claim that phil&teds knowingly made material misrepresentations to agency staff during an investigation of the high chair in 2011.

CPSC has agreed to suspend all but $200,000 of the penalty based on phil&teds USA's sworn representations that the company cannot pay more than that amount without ceasing business operations.

The clamps of the MeToo high chairs can detach from the table and cause a child to fall to the ground. If only one side of the high chair detaches, a child's fingers can become crushed between the bar and the clamping mechanism, resulting in amputation. Between September 2009 and October 2010, phil&teds USA received multiple reports of one or both sides of the high chair detaching, including two incidents where children's fingertips were amputated. Despite these reports and two design changes to fix the problem, phil&teds USA failed to immediately report the defect, consumer incidents or the design changes.

When phil&teds USA finally reported the MeToo high chair to CPSC in January 2011, the company failed to disclose that the high chair posed an amputation hazard, and withheld from CPSC staff that the sample high chair provided for analysis had been redesigned and was not the "representative sample" characterized by phil&teds.

The MeToo high chair was recalled in August 2011, after phil&teds USA had imported and sold more than 13,000 units nationwide. The firm sold the high chairs from May 2009 through January 2011 for between $40 and $50 each.

In addition to agreeing to the civil penalty, phil&teds USA has agreed that the company will implement and maintain a compliance program to ensure compliance with the Consumer Product Safety Act (CPSA) and a related system of internal controls and procedures.

The compliance program requires written standards, policies and procedures to ensure that all information regarding the company's compliance with the CPSA, including reports and complaints, is conveyed to the company's responsible employees. 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 board oversight of compliance; and
requirements for record retention.

phil&teds USA does not admit to CPSC staff's charges.

The penalty agreement has been accepted provisionally by the Commission by a 4 to 1 vote.

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SOURCE U.S. Consumer Product Safety Commission