In the wake of the scandals over lead paint found in toys and other toy recalls, Congress passed the Consumer Product Safety Improvement Act of 2008 (“Improvement Act”), a broad set of amendments to the Consumer Product Safety Act. The Improvement Act, which was signed into law and became effective on August 14, 2008, provides for new whistleblower protections for employees.
A. What Whistleblowing Activities Are Protected?
The purpose of the Improvement Act’s whistleblower provision is to protect employees who do the right thing by speaking up when they believe their employer has violated a consumer product safety law. Specifically, if you are the employee of a manufacturer, private labeler, distributor, or retailer of consumer products, your employer may not retaliate against you for reporting potential violations of consumer product safety laws.
1. What Are U.S. Consumer Product Safety Laws?
The Consumer Product Safety Act (“CPSA”) created broad consumer product safety laws and established the U.S. Consumer Product Safety Commission (“the Commission”), which protects the public from unreasonable risks of serious injury or death from consumer products. Under the CPSA, “consumer products” are any articles produced or distributed for the personal use or sale to a consumer that are used in or around households or schools or in recreation. While more than 15,000 different products are covered by this definition, you should be aware that certain products have been expressly excluded, including food, cosmetics, medical devices, tobacco products, firearms and ammunition, motor vehicles, pesticides, aircrafts, and boats. Because these products are not considered consumer products, the Improvement Act’s new whistleblower protections will not protect you if you engage in a whistleblowing activity.
Under the CPSA, the Commission has power to develop safety standards and pursue recalls for consumer products that present unreasonable or substantial risks of injury or death to consumers. The Commission also has the power to ban a product if there is no feasible alternative. While the powers of the Commission are very broad, the Commission generally has the discretion to determine precisely what to regulate and/or how to regulate it. You should be aware, therefore, that not all dangers to consumer safety will be violations of consumer product safety laws because the Commission may have only enacted voluntary guidelines or weak regulations.
The CPSA, however, does require every manufacturer, distributor, and retailer of a consumer product to immediately inform the Commission if it obtains information that reasonably supports the conclusion that the consumer product: (1) fails to comply with an applicable consumer safety rule; (2) contains a defect that could create a substantial risk of injury to the public; or (3) creates an unreasonable risk of serious injury or death.
Notwithstanding the complicated nature of these consumer product safety laws, as long as you have a reasonable belief that a consumer product safety law has been violated, your whistleblowing activity should be protected.
2. Forms of Protected Activity
Four types of whistleblowing activities are protected by the Improvement Act. The first is when an employee provides, or is about to provide, information relating to any violation of consumer product safety laws enforced by the Commission. The employee is protected if he or she provides information to the employer, the Federal Government, or the attorney general of a state.
The second and third forms of protected whistleblowing activity protect employees who assist in proceedings. An employee is protected under the Act when he or she testified or is about to testify in a proceeding concerning a violation of consumer product safety laws enforced by the Commission. An employee is also protected if he or she assisted or participated, or is about to assist or participate in, such a proceeding.
The final form of protected whistleblower activity under the Act protects internal whistleblowers, or in other words employees who report violations to their employer. This form of protected activity includes when employees object to or refuse to participate in an activity, policy, practice, or assigned task that they reasonably believed to be in violation of consumer product safety laws enforced by the Commission.
Importantly, an employee who engages in one or more of these four forms of protected activity is protected regardless of whether the whistleblowing act was at the employee’s independent initiative or in the ordinary course of the employee’s duties.
B. What Employers Are Covered?
If your employer is a manufacturer, private labeler, distributor, or retailer of consumer products, the Consumer Product Safety Improvement Act makes it unlawful for it to retaliate against you for engaging in protected whistleblowing activities. A manufacturer is any person who manufactures or imports a consumer product. A distributor is a person to whom a consumer product is delivered or sold for purposes of distribution in commerce. A retailer is a person to whom a consumer product is delivered or sold for purposes of sale or distribution by such person to a consumer. Lastly, a private labeler is an owner of a brand or trademark on the label of a consumer product which bears a private label.
C. What Retaliation Is Prohibited?
Covered employers are prohibited from discriminating against an employee with respect to compensation, terms, conditions, or privileges of employment. Examples of discriminatory actions that would qualify are:
- Termination of employment;
- Denial of promotion;
- Unwarranted discipline;
- Unwarranted negative performance review;
- Suspension or other forced leave;
- Reduction in pay or hours;
- Denial of benefits;
- Reassignment that negatively impacts promotion prospects, seniority, or other benefits; or
- Alteration of job duties.
D. How Do I Vindicate My New Rights?
If your employer retaliates against you for blowing the whistle on unsafe consumer products, you’ll need to file a complaint with the Occupational Safety and Health Administration (OSHA) within 180 days of the retaliatory action. The OSHA Whistleblower Protection web page tells you how and where to file such a complaint. OSHA will conduct an investigation if it determines that the complaint contains the necessary elements of a claim, and will eventually issue a preliminary determination. If OSHA comes down on the side of the employer at this preliminary stage of the proceedings, you can request a hearing before a Department of Labor (“DOL”) administrative law judge. In addition, if the case remains undecided by DOL for 210 days, you can withdraw the complaint and re-file it in federal court, where you are entitled to a jury trial, a protection that is not available to whistleblowers in many other contexts.
E. What Are The Available Remedies?
If the Secretary finds that the evidence supports your whistleblower claim under the Act, you may be entitled to remedies that include:
- Reinstatement with previous seniority and benefits
- Back pay
- Compensatory damages, including attorneys’ fees.
F. How Do I Decide Whether To Report My Concerns, And What If I’m Retaliated Against?
Whether to report product-safety concerns — and, if so, when, how and to whom — can be a very difficult decision for an employee, as blowing the whistle on an employer’s unlawful practices can be a career-ending move. However, the new Consumer Product Safety Improvement Act provides strong legal protections, and employees who raise product-safety concerns can look to a number of resources for assistance. If you are thinking about reporting such concerns, or if you already have and are facing retaliation, contact the experienced whistleblower lawyers at Katz, Marshall & Banks, LLP for an evaluation of your whistleblower case with no further obligation.