When it Comes to Small Business, Don’t Look at What We Say; Look at What We Do

We have all heard talk around the agency about the need to address the particular concerns of small business as we implement the regulations mandated by the CPSIA.  Well-intentioned talk means nothing if the agency’s actions don’t match the words.  Recently, I talked with an individual who ran a very small business making sling-type infant carriers.  The company is now out of business.  Here is the story I was told. 

Several years ago, a child died after being carried in the company’s product.  The agency did an in-depth investigation of the incident but did not find a causal link or a reason to take further action and so notified the company.  In 2010, the company was re-contacted by a representative of the agency who stated that we were reinvestigating all infant deaths in slings.  According to the business owner, the CPSC representative told her that a recall of her product was likely but we needed to do an investigation first.  In the meantime, she was told to immediately stop sale of the product until the investigation was completed.  In response, the company pulled down its website (it being primarily a web-based business) and immediately stopped sale of all its sling products.  A date was scheduled for a CPSC representative to come to the company to observe the destruction of the company’s product but the agency backed off until the recall became official.  Weeks went by with no further word from the agency.  The website remained shut down.  The company finally received an email stating that no recall would, in fact, be done.  The time between the initial contact and the email closing the investigation was approximately 8 months. 

Because this was a very small internet-based business with one type of product, it was not able to last with no sales through the prolonged investigation and was forced to close.  The employees lost their jobs and the company owner was forced to default on an SBA loan which she had obtained to expand her business. 

This incident raises a number of important issues.  For example, if we have not determined that a product contains a defect or is a substantial product hazard, are we justified in recalling it, based only on the fact that it is associated with a death or serious injury?  When is it appropriate to “require” a stop sale during an investigation?  Obviously, the answers to these questions need to be made on the basis of the facts in each individual case.  As the circumstances of this case demonstrate, an across-the-board inflexible rule does not make the most sense.  This incident also illustrates the need for the agency, once it opens an investigation, to manage that investigation to conclusion in an efficient manner. 

At the end of the day we did not find a problem warranting a recall with this particular product.  I suspect this small business person did find a problem with our work product. 

Consumer safety is not advanced by such a result.  And all the words about wanting to help small business will not give these people back their jobs.

11 Responses to “When it Comes to Small Business, Don’t Look at What We Say; Look at What We Do”

  1. 1 logic101 June 18, 2011 at 11:30 pm

    I hope every person involved in the above case has not only lost their jobs, but also their qualified immuntiy so they can be sued for damages. All unaccountable people become tyrants. No one in a position of power over anyone else for any reason must be accountable for their failures.
    The above story is exactly why this agency was opposed by anyone that has ever dealt with a gov’t bureaucrat. No accountability = poor work. Period. No exceptions.

  2. 2 DensityDuck June 17, 2011 at 7:48 pm

    So…what happened to the CPSC staff invoked in this situation? Did they get fired, too? Or did they just get a Very Stern Warning to Not Do That Again?

  3. 3 Molly June 17, 2011 at 6:49 am

    Don’t forget about the other small businesses your actions affected. My small business sold these slings in question and I lost out of the sales and revenue as well. My second son spent the first 6 months of his life held closely to me and his father with the use of this sling…. a time that I cherish and a time that helped me not only bond with my child but helped me CONTINUE my small business because I was able to keep my son close. The CPSC’s broad sweeping actions affected me and all those babies who never got to enjoy the pure joy of this company’s product.

  4. 4 AMcA June 16, 2011 at 12:33 pm

    Shouldn’t the government have to have some reasonable basis – how about something like a probable cause standard? – before it can invoke a shut-down? It sounds like there would be no way they could have met it here, given the prior clearing of this product.

    This wouldn’t have to slow down consumer protection activities. The various agencies could continue to develop theories about how dangerous products are – but they’d have to meet some kind of burden before they could shut anyone down.

  5. 5 Difster June 16, 2011 at 12:31 pm

    And of course, the company cannot sue because of qualified immunity. Oh well, more jobs destroyed, no big deal. All done because it MIGHT BE for the children even if there was no tangible risk.

  6. 6 Mannie June 16, 2011 at 10:30 am

    I’m from the Government. I’m here to help you.

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