Good Guys and Bad Guys

It would be nice if you could choose to do business only with people you like. Through the years of working in different industries, and certainly now in the promotional products industry, if I only bought from or sold to nice people, I’d be out of work pretty quickly. I’m sure you don’t make all your business decisions by whether or not your vendor or customer is a saint or scoundrel. For 30 years, Joe Nocera has written behind-the-scenes articles on business leaders, as he says, “for better or worse.” His book, Good Guys and Bad Guys: Behind The Scenes with the Saints and Scoundrels of American Business, is a good read. Chances are good you’ll see someone’s attitude you recognize!

With that in mind, an article from former Consumer Product Safety Commission chair (and frequent critic) Nancy Nord caught my eye.  Nord suggests that the “good guys” get a better shake from the CPSC when it comes to penalties for failed products. She suggests that while on her watch civil penalties were assessed only after an honest negotiation between lawyers for the agency and the company and that “only with the most intransigent company did the negotiation break down so that the agency was forced to refer the case to the Department of Justice for resolution.”

But now she says, that’s changed. Not only do agency lawyers consider failure little more than standard procedure, but negotiations with manufacturers are formed and presented in propositions that are of the “take it or leave it” kind. Nord went on to say that the CPSC is looking for ways to publicize when they refer cases to the DOJ, and compare them to “grand jury indictments.” Again, according to Nord, agency officials state that “penalties are justified because they always are imposed on the ‘bad guys’ and not in instances where good guys made honest mistakes...”.

Whether or not Ms. Nord’s characterization of the CPSC’s treatment as being weighted against the “bad guys” is correct, current agency chairman Elliott Kaye’s call this month for “eight-figure penalties” seem to indicate the way of the future, and certainly didn’t take long to materialize. Just this past week, the CPSC levied the largest fine ever, to the tune of $15.45 million, against dehumidifier manufacturer Gree Electric Appliances. Kaye said “If there's any confusion about what this civil penalty means, let's be very clear about it. It's not going to be tolerated for these companies to write these penalties off as the cost of doing business.” Gree manufactured dehumidifiers under the names GE, Frigidaire, Kenmore, and others. According to the agency, Gree both lied and covered up defects they were aware of that could cause the dehumidifiers to catch fire.

We’ve talked frequently in this space about the issues facing the promotional products industry concerning rare earth magnets. Whether or not the last man standing, Zen Magnets’ CEO Shihan Qu, will now end up being the good guy or the bad guy depends on which day in his fight with the CPSC you pick. First, on March 22, a U.S. District Court judge confirmed a permanent injunction that meant Zen couldn’t sell a million units they had purchased from Star Magnets right before they agreed with the CPSC for a recall. But then, just three days later, an administrative law judge in a federal proceeding, handed Zen a reversal by ruling that the agency had NOT proved that ALL rare earth magnets are dangerous. Judge Dean Metry said “proper use of Zen Magnets… creates no exposure to danger whatsoever.” His ruling did note, however, that the magnets should be sold with warnings. There is no question that the rare earth magnets, when swallowed by children, can cause serious injury or death. But this is an intended use issue, like so many other products that can turn dangerous when not used as initially intended by the manufacturer. Can you say “laundry pods"?

At Quality Certification Alliance, we think delivering safe promotional products is an exercise best done collaboratively between suppliers and distributors. When you are sourcing with your suppliers, QCA-accredited or not, is a complete risk assessment one of your first steps of product selection? If it isn’t, it should be.

Jon Levine, president of The Image Group, and a distributor member of QCA’s marketing committee, weaves product safety into every business day. “I am committed to helping our industry understand the benefits we all derive from working with QCA-accredited suppliers, and why that is important to our organizations and our clients. We all know there are risks associated with product that has been manufactured by suppliers without a focus on compliance. We need the whole industry to see the value proposition of compliant goods, and quickly move every organization to adopt standards that mitigate the risk of a catastrophic incident.”

Jeff Jacobs has been an expert in building brands and brand stewardship for more than 30 years. He’s a staunch advocate of consumer product safety and has a deep passion and belief regarding the issues surrounding compliance and corporate social responsibility. He is the executive director of Quality Certification Alliance, the industry’s only non-profit dedicated to helping suppliers provide safe and compliant products. When he's not working, you can find him traveling the world with his lovely wife, working as a volunteer Guardian ad Litem, or sometimes even enjoying a cigar at his favorite local cigar shop. Follow Jeff on Twitter, or reach out to him at jeff@qcalliance.org.