Ross Stores Agrees to $3.9 Million Civil Penalty, Internal Compliance Improvements for Failure to Report Drawstrings in Children's Upper Outerwear
In addition to paying a monetary penalty, Ross Stores has agreed to implement and maintain a compliance program designed to ensure compliance with the reporting requirements of Section 15(b) of the Consumer Product Safety Act and the Final Rule. Ross Stores also agreed to enhance its existing compliance policies by ensuring that its ongoing program contains written standards and policies, a mechanism for confidential employee reporting of compliance related questions or concerns, and appropriate communication of company compliance policies to all employees through training programs. Ross Stores has designed and implemented a system of internal controls and procedures to ensure that the firm's reporting to the commission is timely, truthful, complete, accurate and in accordance with applicable law. The company will also take steps to ensure that prompt disclosure is made to management of any significant deficiencies or material weaknesses in the design or operation of such internal controls.
"Ross is a repeat violator," Tenenbaum said. "In 2009, it paid a civil penalty of $500,000 for violating the same law, Section 15 of the Consumer Product Safety Act (CPSA). Neither the fine nor the supposed remedial measures Ross implemented on its own initiative following that settlement was sufficient to prevent the continued sale of defective garments. Vendors who were contractually obligated to provide compliant products continuously failed to do so; internal policies prohibiting the purchase, inventory, and sale of garments with drawstrings were equally ineffective. Regardless of what Ross's management may have wanted to believe about the effectiveness of their policies, they clearly did not work. Moreover, the fact that Ross did not design, manufacture, or import the garments did not relieve it of the obligation to ensure that they comply with all applicable safety statutes and regulations."
Federal law requires manufacturers, distributors, and retailers to report to CPSC immediately (within 24 hours) after obtaining information reasonably supporting the conclusion that a product contains a defect which could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.