Before the government shutdown threw so many plans up in the air, the Commissioners were scheduled to meet on October 23rd to deliberate and vote on whether to issue for comment an interpretive rule setting out guidelines for voluntary recalls. While I have discussed my concerns about the overall approach outlined in the draft rule (see my post here), I am especially concerned about the impact it will have on our fast track recall program.
My concern flows from the provision in the proposed rule that gives the staff the authority to insist on implementation of a corporate compliance program as a part of the corrective action plan (CAP) being negotiated. Normally, a CAP is limited to a refund, a repair, and/or a return. The direction to the staff here is somewhat vague but the proposed rule states that a company’s history of recalls could trigger such a demand.
The fast track recall program is an innovative procedure put in place a number of years ago to get recalls conducted as efficiently and quickly as possible. Under the fast track approach, a company can bring a potential recall to our attention, the staff will agree with the recall without making any finding that the product violates a rule or has a defect and the whole matter will be resolved within 20 days of the first notice to the agency (in the majority of cases). This approach benefits the agency in that it resolves safety problems with minimum resources, it benefits the company in that it gets the recall out efficiently, and most importantly, it benefits consumers by getting product issues quickly resolved. Consequently, the fast track option is used frequently, especially for those recalls where hazards are speculative or inconclusive. (I am reminded of the recalls of beaded curtains that took place several years ago, when one company, seeing that another had recalled these left-overs of an earlier hippie era, also recalled its beaded curtains without any incidents or other data to justify such a recall.)
All of us hear anecdotal comments on a regular basis of companies that use the fast track program when quality control (as opposed to safety) issues have been discovered and we readily agree with such recalls. We also hear that the fast track program is used when there is concern that there may be a potential safety issue but that has not been determined and the company, out of an abundance of caution, decides that it will do a recall early rather than wait for more evidence of the existence (or not) of a safety issue. We have even heard of companies who have integrated the fast track concept into their compliance programs, making the default a fast track report to the agency.
These are generally positive developments. But the incentives to use the fast track may be curtailed if using fast track could be the basis for a demand that a company supply information about its compliance program. The incentives would be further undermined if the agency treats the mere fact of past recalls as proof that a compliance program needs to be scrapped or reworked under the watchful eye of the CPSC. I am not suggesting that products with real safety problems are not recalled under the fast track program. Of course they are. But the staff has not made any finding of the existence of the hazard. It would be a very bad result if this provision in the proposed rule made companies either reconsider or forego taking advantage of the benefits of the fast track option in marginal cases because that decision could come back to haunt them later.
And the time of our hard-working (and often over-worked) compliance officers is best spent getting unsafe products out of the hands of consumers. Their expertise is in negotiating recalls, not designing corporate compliance programs.