Clothing Store Fined $3.9 Million by Feds Over Drawstrings

CPSC levied fine to send a ‘message’

August 26, 2013

The U.S. Consumer Product Safety Commission (CPSC) wanted to send a "message" by fining a department store almost $4 million after they failed to "report immediately" to the federal government that they were selling children’s clothing with drawstrings.

Ross Stores, Inc. settled with the agency in June, agreeing to pay a $3.9 million civil penalty after they "knowingly failed to report to CPSC immediately, as required by federal law, that it sold or held for sale, about 23,000 children’s upper outerwear garments with drawstrings at the neck or waist."

The company said it settled to avoid costly litigation and denies violating a guideline to report children’s clothing with drawstrings to the CPSC, which the commission contends is hazardous. According to the commission, drawstrings have been responsible for 26 deaths.

Children’s garments with drawstrings are not banned, but retailers can face substantial fines for not reporting the apparel to the agency.

The fine was the largest the commission has handed down in recent years for violating the policy, on top of the millions the agency has collected from big-name retailers for failing to notify the government that it had garments with drawstrings in children’s sizes in stock.

A host of major retail stores have been hit with the violation, totaling at least $9,650,000 since August 2008. That includes Burlington Coat Factory, which paid a $1.5 million fine last year, Macy’s ($750,000), Bon-Ton ($450,000), Kohl’s ($425,000), and Nordstrom ($60,000).

The penalties are based on a 1997 voluntary guideline from the agency that recommends that children’s clothing sized 2T to 12 be made with no neck or waist drawstrings.

Additionally, a 2006 letter from the "Commission’s Director of the Office of Compliance" urges retailers to comply with the guideline, though it is not mandatory. However, retailers are required to report to the CPSC if they are selling children’s garments with drawstrings.

A final 2011 rule designated clothing sized 2T to 16 with drawstrings as a "substantial product hazard."

"A manufacturer who fails to report a substantial product hazard to the commission is subject to civil penalties," the rule stated.

Customs and Border Protection even has the authority to stop "potentially hazardous shipments of children's outerwear with drawstrings from entering the United States," due to the regulation. The CPSC also can issue recalls for garments that violate the policy.

When asked about the number of children fatalities associated with drawstrings, the CPSC alerted the Washington Free Beacon to a May 2012 blog post entitled, "Drawstrings Not Allowed."

"CPSC has received 26 reports of children who have died when drawstrings in their clothes got tangled on playground slides, school bus doors and other objects," the agency said, though it does not specify when these deaths were reported.

"Waist and bottom drawstrings that were caught in cars and buses resulted in dragging incidents," they said in the article.

Other requests for comment by the Free Beacon regarding the policy were not returned.

Under the rule, Ross was cited by the commission for selling 12 styles of clothing with drawstrings to children, including a Puma training jacket, a "Hot Chocolate Athletic set jacket with waist drawstrings," and a "fur hood fleece with waist drawstring."

The garments were procured or sold between January 2009 and February 2012. Ross said it processed 57 million units of children’s apparel alone in 2011.

Since the store did not immediately report that it had the drawstring garments in its inventory—which totaled 23,000 items—they were hit with a $3.9 million fine. The penalty comes to $169.56 per item.

In the settlement, Ross denied the charges that they "failed to timely report" the sales of the clothing and said they merely wanted to avoid a costly court battle.

"Ross enters into the agreement to settle this matter without the expense of litigation," the document stated.

According to the settlement, the company "informed the commission that there have been no reported incidents or injuries associated with the garments" they sold.

Ross also said they did not notify the government because they believed the agency was aware of the "alleged defect," since the CPSC itself had already issued a recall of the drawstring items.

CPSC chairman Inez Tenenbaum, who was nominated by President Barack Obama on June 9, 2009, said high fines serve as a deterrent to prevent retailers from selling children’s clothing with drawstrings in the first place.

"It is my hope and expectation that the message we are sending with the substantial fine and the compliance requirements in this agreement will increase the likelihood that Ross—and other firms—will not only make the right decision next time they are confronted with whether to report a safety issue but also—and more importantly for consumer safety—will take all necessary steps to ensure they produce and market only compliant products, thus obviating the need for any reporting at all," she said in a statement following the settlement on June 21.

"During my tenure as chairman of the CPSC, my colleague commissioner Robert S. Adler and I have written together and separately regarding the need for civil penalties to truly serve the policy objectives of deterring violations and promoting compliance with the law, particularly in light of the increased penalty amounts Congress authorized in the Consumer Product Safety Improvement Act of 2008," Tenenbaum said.

"This settlement reflects the goals and importance of our enhanced authorities, and I commend the CPSC staff for this result."

Published under: Federal Bureaucracy