CONTROL Surviving a product recall
By GARy JAMES
Note: Information in this article is intended
for general educational purposes.
Consult with your own legal counsel or
product safety adviser for specific
guidance related to your company.
| 26 BedTimes February 2012 www.bedtimesmagazine.com
When mattresses need to be pulled from
consumers’ homes and repaired or destroyed because
of safety concerns, the process is called a “recall.”
But for the companies involved, it’s an experience
they would rather forget.
A product recall can be an expensive, labor-intensive process, con-
suming staff and management time as companies scramble to deter-
mine exactly what products are affected, where they’ve been shipped
and how to contact all the consumers who are using them. The
process requires an “all-hands-on-deck” approach so that every
stakeholder—anyone involved with producing, selling or using the
product—is informed about the defect and the company’s plan to
remedy the situation.
In addition, the process of conducting a product recall exposes
a company to increased scrutiny from the U.S. Consumer Product
Safety Commission—the federal agency charged with protecting
the public from harm caused by certain consumer products—as
well as the media and consumers. Handled incorrectly, a recall
can result in damaged supplier and retailer relationships and a tar-
nished brand image that may be difficult to correct. And the legal
stakes of a misstep are higher than ever.
“With the enactment of the Consumer Product Safety Improve-
ment Act of 2008, the amount of penalties the CPSC is permitted to
seek has been raised substantially—to $100,000 per violation, with the
maximum penalties raised to $15 million for a related series of viola-
tions,” says Cheryl Possenti, an attorney with Goldberg Segalla in Buffalo,
N.Y., a civil litigation specialist for a number of Fortune 100 companies.
According to Possenti, the CPSC can pursue civil penalties, not only for the
sale of products that violate government safety standards, but also “when a compa-
ny fails to report immediately to the CPSC that a product contains a defect that could
create a substantial risk of injury to the public.”
In the mattress industry, there are two primary federal regulations under which bed sets
might be recalled: 16 CFR Part 1633, the open-flame standard that took effect in 2007; and 16
CFR Part 1632, the cigarette flammability standard issued in 1973. According to the CPSC website,
fewer than a dozen recalls involving mattresses or mattress pads have been conducted in the past 10
years, a relatively small number compared with many other industries. Baby mattresses and pads also
are occasionally recalled under different regulations.
Despite the low frequency of mattress-related recalls, manufacturers and their business partners—
everyone from component suppliers to distributors to retailers—must be vigilant to ensure that if
problems with product safety do occur, they are reported to the CPSC quickly and that any issues are
addressed and fixed.
www.bedtimesmagazine.com February 2012 BedTimes 27 |
eporting responsibility responsibility for making sure the products it sells in the
While U.S. manufacturers have the lead respon- United States comply with regulations and for conducting
sibility for reporting problems to the CPSC, a recall if they don’t.
distributors and retailers also must report if To confirm that manufacturers and importers have the
they are aware of a product defect or a company’s failure necessary safety programs in place, the CPSC conducts
to comply with a regulation. They can either contact the unannounced inspections of production plants and
CPSC directly or send a letter to the manufacturer or im- warehouses, examining products, records and procedures.
porter. Failure to report means distributors and retailers It also can pull products from retailers to test for compli-
also may be liable for any legal penalties that are assessed. ance.
In cases in which mattresses and foundations are be- The process of compliance starts with burn testing and
ing brought into the United States from other countries, confirmation burns of bedding prototypes and compo-
the importer of record—the U.S.-based company that nents by manufacturers, importers and suppliers before
takes possession of the goods after they clear customs—is new mattresses and foundations reach the market. All bed
responsible for informing the CPSC of potential prod- sets sold in the United States must bear a label showing
uct safety problems. This company ultimately bears the that products have been properly tested and comply with
The mattress recall process at a glance
Who must report a hazardous product? Any manufacturer, documenting all of the product and component tests
distributor, importer or retailer that has information about a required for a given product, companies should have a
potentially hazardous product must report it, according to system in place to make sure that product defect and
the U.S. Consumer Product Safety Commission. hazard information is captured and channeled to respon-
sible managers so that they can evaluate and report it to
What types of defects must be reported? Companies must the CPSC, if appropriate. A company also should assign
report to the CPSC if they obtain information that a prod- the responsibility of reporting product safety hazards to
uct fails to meet a consumer product safety rule, standard someone with knowledge of the product in question and of
or ban; contains a defect that could create a substantial the CPSC’s reporting requirements. The person should have
hazard; or creates an unreasonable risk of serious injury or the authority to report to the CPSC or to quickly raise the
death. This information may be in the form of quality con- reporting issue with appropriate decision-makers within the
trol data, product returns, warranty information, customer company.
complaints, reports of deaths or injuries to consumers using
a product, lawsuits or any other input suggesting a product How will the CPSC evaluate a company’s handling of
safety problem. safety information? In evaluating when a report should
have been filed, the CPSC considers what a company actu-
When does a company need to report a hazardous prod- ally knew about the potential hazard posed by a product
uct? A company must report to the CPSC within 24 hours of and what a reasonable person or firm acting in those
obtaining reportable information. The CPSC considers that circumstances would have known. Companies that are not
a company has obtained knowledge of reportable informa- responsible and informed about the safety of their prod-
tion when that information is received by an employee or ucts run a “great risk of future civil penalty liability” should a
official of the company who may be reasonably expected product recall ever be necessary, according to the CPSC.
to be capable of appreciating its significance. Under ordi-
nary circumstances, five working days is the maximum time What is the Fast Track program? Fast Track is a CPSC
for information to reach the chief executive officer or the program designed for companies willing and able to
official assigned responsibility for complying with reporting move quickly with a voluntary recall of their products. The
requirements. However, if a company is uncertain whether program eliminates some of the procedural steps in the
information must be reported, it may spend “a reasonable traditional recall process, including the CPSC’s preliminary
amount of time” investigating the matter. The CPSC gener- determination that the product contains a defect that pres-
ally defines this period as 10 or fewer days. ents a substantial hazard.
Where should a report be filed? A company should file its What is a CAP? A CAP, or “corrective action plan,” is a re-
report with the CPSC’s Division of Recalls and Compliance. medial action taken by a company in response to a product
The report may be filed by mail (4330 East West Highway, defect or risk. Depending on the nature of the defect or risk,
Room 613, Bethesda, MD 20814), telephone CAPs could include the return of a product to the manufac-
(301-504-7913), fax (301-504-0359) or electronically turer or retailer for a cash refund or a replacement product,
through the CPSC website (www.cpsc.gov). the repair of a product or public notice of the hazard. The
goal of a CAP is to correct as many product defects or risks
What can a company do beforehand to prepare for a as possible in the most practical, cost-effective manner.
product recall? In addition to performing and thoroughly
Source: U.S. Consumer Product Safety Commission
| 28 BedTimes February 2012 www.bedtimesmagazine.com
federal regulations. an attorney with Goldberg Segalla. “One trigger is the
Accurate labeling is the first line of defense against subjective standard: a defect in the product that poses a
a potential product defect investigation, according to substantial risk of serious injury or death. The other is
Joanne E. Mattiace, a principal of the Law Offices of more objective: three lawsuits involving a product that
Accurate Joanne E. Mattiace, a Westbrook, Maine-based law firm have resulted in verdicts or settlements, no matter how
with a Washington, D.C., presence and focus. nominal, within a two-year period.”
“If a label doesn’t appear to be right, that may lead to a
product being singled out for inspection and testing,” she orking with the CPSC
the first line says. Reporting a product to the CPSC doesn’t
of defense To avoid problems, Mattiace recommends that all par-
ties in the distribution chain—manufacturers, importers,
automatically mean that the agency will
conclude that the product creates a sub-
against a distributors, retailers—make sure that the products they stantial hazard or that a recall or other corrective action
are selling carry up-to-date safety law labels and registra- is necessary. The CPSC staff works with the reporting
potential tion numbers. company to determine what’s appropriate. But since
When a company has reason to suspect a product 2008, the CPSC has taken a more active role in product
product may pose a risk to public safety, the law requires it to file safety inspection and enforcement.
a report with the CPSC within 24 hours of a responsible “Since the passage of the CPSIA, the CPSC has gotten
defect party—an official or employee capable of recognizing its a lot more sophisticated,” Mattiace says. “They are saying
significance—receiving the information. Prior to that to companies, ‘Don’t just tell us about a problem; take a
investigation. point, the company is allowed five days for that informa- look at the problem and determine what you can learn
tion to move up the chain of command. A maximum of from it.’ They want companies to constantly be fine-
10 days is permitted for investigating the situation prior tuning their systems and procedures so that future prob-
to filing a report. lems are minimized.”
“A lot of companies won’t recognize a triggering event If a recall is needed, the CPSC works with the com-
for a violation right away,” says David Osterman, also pany to put together an effective plan for public notifica-
One mattress maker’s recall experience
hen a bedding manufacturer discovered a 16 The company also made early contact with the U.S. Con-
CFR Part 1633 burn test failure during a routine sumer Product Safety Commission to alert officials about the
quality control check involving one of its popular problem and the steps being taken to address it.
mattresses several years ago, the company im- “The CPSC was very helpful,” the bedding executive says.
mediately initiated an investigation. “They worked closely with us every step of the way, approving
The company spoke with BedTimes about its experiences our plan for conducting a recall and providing other support
but asked not to be identified. as we moved forward.”
After conducting re-tests with similar products from multi- Using its existing product traceability systems, the com-
ple plants, it determined that a problem existed with a specific pany determined that the core-sock combination in ques-
core-FR sock combination used on one mattress model during tion had been used on nearly 6,000 beds already produced,
a limited time frame. The problem was sporadic—sometimes shipped or sold. The company’s records showed exactly
the mattress would fail a burn test and other times it would which stores had bought the beds, so contacting deal-
pass. It also was puzzling: Both the core and the sock were ers was straightforward. Identifying individual consumers,
being used separately on other mattress models without a however, was more of a challenge, since some stores had
problem. detailed records and others did not.
“It was very alarming,” says a company executive directly “Tracking down consumers isn’t easy, so we made sure
involved with the recall. “None of our records until that point to use redundant methods of communication to spread
had indicated a problem. And neither of the suppliers re- the word,” the bedding executive says. In addition to news
sponsible for these components claimed they had made any releases sent to the media and posted on the CPSC web-
changes. But there clearly was a danger when these two spe- site, the company asked retailers to post notices. Using an
cific components were combined. We knew we had to move outside specialist, a hotline was set up to field consumer
quickly to address the situation.” inquiries.
The company immediately stopped production of the For those consumers who could be identified as potentially
model with the troublesome core-sock combination. It also being affected, the company created a letter for retailers
started tracing how many of the mattresses already had been to send out explaining that the product “has a manufactur-
made and where they had been shipped. A team was cre- ing defect, does not meet our standards and qualifies for a
ated to determine what other corrective actions needed to be replacement.” The letter invited consumers to contact the
taken and which parties—from suppliers and employees to retailer for further information.
retailers and consumers—needed to be notified. The fact that the core-sock combination was designed to
| 30 BedTimes February 2012 www.bedtimesmagazine.com
tion and implementation of the recall. According to the companies maintain accurate records about the design, ‘At all times,
CPSC’s Recall Handbook, the objectives of a recall are: production, distribution and marketing of each product
1. to locate all defective products as quickly as possible for the duration of its expected life cycle. To make sure consumers,
2. to remove defective products from the distribution that these records are accurate and accessible at the time
chain and from the possession of consumers of a recall, the CPSC recommends companies appoint a the media
3. to communicate accurate and understandable in- recall coordinator, as well as a backup coordinator, before
formation in a timely manner to the public about the an event actually occurs.
product defect, the hazard and the corrective action.
The CPSC advises companies to design all informa-
A company’s recall coordinator should be responsible
for receiving and processing all information regarding
tional material “to motivate retailers and the media to get the safety of the company’s products, including quality need to see
the word out and consumers to act on the recall.” Typical control records, engineering analyses, test results, con-
forms of communication include a joint press release sumer complaints, warranty returns or claims, lawsuits that the
from the CPSC and the company; a dedicated toll-free and insurance claims. Ideally, the recall coordinator has
number for consumers to call to respond to the recall no- full authority to take the steps necessary to initiate and company has
tice; postings on company websites; video news releases; implement all recalls, with the approval and support of
notices to distributors, dealers, sales representatives, the president or chief executive officer. a clear plan
retailers and other parties involved with the product; and
other notices to consumers. etting help
in place and
“Companies need to communicate clearly and com-
pletely,” Mattiace says. “It’s important that messages be
When faced with a recall, company execu-
tives have two choices: They can do the work
consistent so that consumers understand the nature of themselves, following the steps outlined in everything it
the problem and what their options are.” the CPSC’s online Recall Handbook, or they can hire an at-
Because the goal of any recall is to retrieve and then torney or other adviser, such as ExpertRECALL. Based in can to make
repair or replace products already in consumers’ hands, Indianapolis, ExpertRECALL handles everything involved
as well as those in the distribution chain, it’s essential that in a recall, from setting up a call center and managing things right.’
be easily zipped on or off the mattress made the recall easier up to repair or replace it all. Thankfully, we weren’t required
than it might have been. For those products still in factory or to start taking back product right away so we had time to
store warehouses, the company was able to simply swap out build up a stock of replacement covers.”
the core-sock combination with another approved sock. It took about four months between the time the com-
The company offered consumers three, free-of-charge op- pany discovered the problem and when it started replacing
tions: They could get a replacement kit mailed directly to them product.
for self-installation, they could arrange for a technician to Reflecting on the recall experience, the executive says
come to their home to install the kit for them or the company everything went smoothly. For that, he credits good organi-
zation, teamwork and clear communication with the CPSC
and other outside parties.
‘Consumers ended up with a “The CPSC was very complimentary about our attitude
and attention to detail in dealing with this recall,” the com-
positive attitude about our company pany official says.
In addition, he says, “consumers ended up with a posi-
because we offered to customize tive attitude about our company because we offered to
the corrective action.’ customize the corrective action for them and make it as
painless and easy as possible.”
For other companies faced with a possible recall, the ex-
would take back their mattress and give them a new version. ecutive says his best advice is “to follow the law, keep good
During the first week the recall was made public, the records and bring in consultants when it’s appropriate.”
company received 202 contacts from consumers. After a In this case, the company hired Gordon Damant, former
year, a total of 1,222 consumers called or wrote the com- head of the California Bureau of Home Furnishings and
pany to inquire whether the recall affected them. Serial Thermal Insulation and an expert on the mattress industry’s
numbers were used to determine if particular products were fire safety issues, “because we wanted an outside source to
part of the recall. make sure we were analyzing the problem correctly. Having
In the end, the company received fewer than 600 verified him involved also gave us more credibility with the CPSC.”
consumer claims under the recall. Of those, 285 were sent “We also would suggest, in addition to the required
a kit for self-installation, 260 were sent a kit for installation prototype and confirmation burns, that companies do
by a technician and 26 received a replacement mattress. random burns on all their models periodically to make sure
“The CPSC says that about 20% of the product affected everything is still in compliance,” the executive says. “That’s
by a typical recall comes back and gets changed out,” says how we discovered this problem and were able to correct it
the company representative. “But you have to be geared before it became much larger.”
www.bedtimesmagazine.com February 2012 BedTimes 31 |
claims to collecting and destroying products after they’re product safety compliance as a “moving target” that
returned. Since its formation in 2003, the company has requires daily attention.
handled more than 2,500 recalls. “A compliance program needs to be more than a
With any recall, there are four key goals, says Mike binder on a shelf collecting dust,” he says. “It has to be
Rozembajgier, ExpertRECALL vice president of recalls: something that the whole company understands and puts
“Protect the public, protect the brand, remove and de- into practice so that all rules and standards are met.”
stroy the product, if necessary, and complete the process To help companies ensure that they have the proper
as efficiently as possible. And, at all times, consumers, the systems in place, firms such as Lilly Management Group
media and regulators need to see that the company has a in St. Charles, Ill., conduct mock CPSC plant inspections
clear plan in place and is doing everything it can to make and reviews of flammability compliance programs.
things right.” “Our program is designed to help companies evaluate
Finally, Rozembajgier urges company leaders to regard their compliance status, identify shortcomings or gaps
Crisis planning requires good communication
hen faced with a possible product recall, too 5. Use all available communication channels It is “absolutely
many company executives “play ostrich” rather essential,” Bernstein says, for companies to establish notifica-
than take decisive action and communicate with tion systems that will allow them to rapidly reach stakeholders
all stakeholders, says Jonathan Bernstein, presi- using multiple channels, including phone, email and fax. This
dent of Bernstein Crisis Management in Sierra Madre, Calif. increases the odds that a message will get through. “It’s better
“They wait until the recall is required and then try to figure to over-communicate than take the risk that important stake-
out what to do, resulting in additional risk for consumers and holders miss the message,” he says.
the company’s reputation,” Bernstein says.
6. Consider the use of “virtual” incident management There
The author of the new book, Manager’s Guide to Crisis
are a number of Internet-based systems that allow recall team
Management, Bernstein has handled communications for a
members to exchange real-time information, access current
number of major product recalls. He offers these 10 tips for
communications documents and keep team leaders updated,
effective crisis communications:
even if they are geographically scattered.
1. Be prepared The best time to prepare for a negative event
7. Identify backups for critical people and systems “Assume
is before it happens. Bernstein recommends that companies
that some recall-related lead personnel will not be available
conduct brainstorming sessions about potential recalls and
when you need them,” Bernstein says. “Assume that the com-
then develop a clear plan of response that addresses key
puter system where you maintain your stakeholder contact lists
operational, legal and public relations issues.
might crash. Assume other similar worst-case scenarios and
2. Appoint and train a team A small team of senior execu- make backup plans accordingly.”
tives should be formed and trained to manage communica-
8. Make decisions based on protecting the brand, not just
tions in the event of a crisis. Ideally, the team is led by the
the legal risks The infamous Bridgestone-Firestone tire recall
president or chief executive officer, along with the company’s
in 2000 started “far too late because the company’s lead-
top PR executive and legal counsel as advisers. If the in-house
ership was considering risks other than the most important
PR executive doesn’t have sufficient crisis communications
one—the risk of aggravating the court of public opinion,”
expertise, the company may need to retain an agency or
independent consultant. Other team members should be the
heads of all major divisions, such as finance, human resources 9. Focus communications A few angry people can make
and operations. waves completely disproportionate to their numbers or even
to the injury suffered. The recall process should include an
3. Create contact lists Who are the stakeholders—employees,
“escalated cases” team to focus on such complaints.
suppliers, distributors, retailers, etc.—who would be affected
by a recall? Company leaders must ensure that a system is in 10. Take responsibility Public backlash over a recall can
place so that all stakeholders can be reached quickly in the occur for two reasons, Bernstein says: Distress that a prod-
event of a recall. uct is defective and distress over the manner in which the
recall was—or wasn’t—communicated. “you minimize public
4. Empower all employees with accurate information During
backlash by being proactive and transparent,” he says. And
a crisis, employees are PR representatives—whether a com-
don’t wait for regulating agencies, such as the CPSC (U.S.
pany wants them to be or not. “Don’t try to control damage
Consumer Product Safety Commission), to get involved before
by restricting the flow of information internally,” Bernstein says.
communicating. “Bureaucratic processes can often delay
“Be sure every member of your organization is equipped with
how much time passes before distributors and consumers are
the information necessary to represent the situation accurate-
notified—a delay which, in worst-case scenarios, can cause
ly to anyone who asks.”
injuries or deaths,” Bernstein says.
| 32 BedTimes February 2012 www.bedtimesmagazine.com
n RESOURCES in their program and then resolve those issues,” says Bob CPSC and will be in a position to remedy the situation
Sabalaskey, Lilly Management Group vice president of with minimal impact,” she says. “You may end up recall-
manufacturing and product engineering. “It provides ing just one out of 10 products, say just the queen-size
mattress manufacturers with a ‘real-world’ inspection models, rather than 10 out of 10.”
experience and the opportunity to assess their FR compli- Unlike toys and other smaller, less expensive
ance readiness prior to an inspection by the CPSC.” items, a bedding set is a relatively pricey item that’s
To download the
As part of that readiness, it’s critical that mattress typically difficult to fix.
manufacturers “keep complete, organized records that “That makes the cost of a recall higher, since
show they meet federal standards,” Sabalaskey says. “And the product typically has to move quickly out of
when they modify a product’s materials or construction, the distribution chain and a replacement needs to
they need to provide ‘reasonable criteria’ data that dem- be made,” Possenti says. “A mattress also has a long
onstrate changes made to that model will not affect FR life span, which means there’s a longer period of
database for reporting
performance of that model.” liability.”
A company with a consistent, well-designed program In the end, a company with a strong compliance
of testing, monitoring and record keeping is in the best program will be in the best position to ensure prod-
position to deal with any complaints that may arise, Pos- uct safety and avoid a possible recall.
Goldberg Segalla senti says. As Possenti concludes, “The best-managed recall
Law firm with offices “That company will have the most credibility with the is the one that never occurs.” n
in Connecticut, New
Jersey, New York
that specializes in
litigation and serves
as trial attorneys for a
Consumer website bears watching
Companies should monitor reports their about products
number of Fortune 100
companies. hile formal recalls of mattresses and foundations are rare, a new government website
www.goldberg launched in 2011 invites any consumers who believe they were harmed by a consumer
segalla.com product regulated by the U.S. Consumer Product Safety Commission to report their com-
plaints for posting on the site.
The Law Offices of
Required as part of the Consumer Product Safety Improvement Act of 2008, the website,
www.saferproducts.gov, provides a publicly accessible, searchable database of all such incident reports.
Law firm based in
Among the consumer product categories listed are mattresses, covers and pillows.
Westbrook, Maine, that
Consumers submitting reports are not required to provide any proof to support the alleged inci-
specializes in helping
dents. Instead, consumers are asked to “click” on a button verifying that the information is accurate to
the best of their knowledge. Consumers are asked to disclose their identities to the CPSC, but they can
meet product safety
choose whether the CPSC, in turn, may disclose their identity to the company that made, imported or
sold the product.
Manufacturers, importers and private-labelers mentioned in these reports receive copies of the claims
prior to posting. They then have 10 days to challenge the accuracy of the report, after which time the report
will be posted on saferproducts.gov unless the CPSC finds it contains confidential or inaccurate informa-
ExpertRECALL tion. If a decision is made to post the report, it is accompanied by the manufacturer’s written response.
Indianapolis-based “Producers must be prepared to respond quickly to these notifications,” says Cheryl Possenti, an attorney
company that helps with Goldberg Segalla in Buffalo, N.y. “Otherwise, they risk an untrue or misleading accusation being posted
businesses manage for all to see.”
the various aspects of Though reported in news media, including BedTimes, many companies are unaware that this database
a product recall. exists, Possenti says.
www.expertrecall.com “They find out only after a complaint has already been posted and the damage to their image has been
done,” she says.
Lilly Management Possenti says it’s critical that all producers take the time to register on the site so that the CPSC has cur-
Group rent contact information in the event of a complaint. Without that information, the CPSC’s notification may
Consulting firm based not reach a company in time for it to respond to the complaint prior to its public posting.
in St. Charles, Ill., that, The seriousness with which companies treat these claims varies greatly, says attorney David Osterman,
among other things, also with Goldberg Segalla.
helps mattress makers “Brand-sensitive companies with strong consumer recognition will want to be very engaged so that er-
comply with federal roneous claims aren’t put into the public domain,” he says. “And, if the claim is legitimate, it’s important to
safety standards. file a timely response so that the public knows how you’ve handled the problem and can be assured that it’s
www.lilly no longer an issue.”
management.com At the very least, companies need to be aware that a report has been received by the CPSC, he says:
“That way, they can consider its merits and decide whether they want to respond or not.”
| 34 BedTimes February 2012 www.bedtimesmagazine.com