Tag: shopfloor

The CPSC’s Defective New Complaints Database

We are told constantly that government can play a beneficial role in the marketplace by taking steps to make sure consumers are more fully informed about the risks of the goods and services they use. But what happens when the government itself helps spread health and safety information that is false or misleading? That question came up recently in the controversy over New York City’s misleading nutrition-scare ad campaign, and it now comes up again in a controversy over a new database of complaints about consumer products sponsored by the federal Consumer Product Safety Commission (CPSC).

As part of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Congress mandated that the CPSC create a “publicly available consumer product safety information database” compiling consumer complaints about the safety of products. Last week, by a 3-2 majority, the commission voted to adopt regulations that have dismayed many in the business community by ensuring that the database will needlessly include a wide range of secondhand, false, unfounded or tactical reports. The Washington Times editorializes:

…[Under the regulations as adopted last week] anybody who wants to trash a product, for whatever reason, can do so. The commission can leave a complaint on the database indefinitely without investigating its merits “even if a manufacturer has already provided evidence the claim is inaccurate,” as noted by Carter Wood of the National Association of Manufacturers’ “Shopfloor” blog….

Trial lawyers pushing class-action suits could gin up hundreds of anonymous complaints, then point the jurors to those complaints at the “official” CPSC website as [support for] their theories that a product in question caused vast harm. “The agency does not appear to be concerned about fairness and does not care that unfounded complaints could damage the reputation of a company,” said [Commissioner Nancy] Nord.

Commissioners Nord and Anne Northup introduced an alternative proposal (PDF) aimed at making the contents of the database more reliable and accurate but were outvoted by the Democratic commission majority led by Chairman Inez Tenenbaum. Nord: “under the majority’s approach, the database will not differentiate between complaints entered by lawyers, competitors, labor unions and advocacy groups who may have their own reasons to ‘salt’ the database, from those of actual consumers with firsthand experience with a product.” Commissioner Northup has published posts criticizing the regulations for their definitions of who can submit a report, who counts as a consumer, and who counts as a public safety entity.

For those interested in reading further, Rick Woldenberg, a leading private critic of the law who blogs at AmendTheCPSIA.com, has critically commented on the politics of the proposal here, here, here, here, and here. More coverage: ShopFloor with followups here and here, New York Times, Sean Wajert/Mass Tort Defense. I’ve been blogging for the past two years at my website Overlawyered about the wider problems with the CPSIA law, including its effects on books published before 1985, thrift stores, natural wooden toys, ballpoint pens, bicycles, plush animals, Irish dance costumes, rocks used in science class and many more. Most of these problems remain unresolved thanks to the inflexible wording of the law as well as, sometimes, the unsympathetic attitude of the commission majority. I’ve heard that bringing overdue investigative oversight to the ongoing CPSIA disaster is shaping up as a priority for many incoming lawmakers on the (newly Republican-led) House Energy and Commerce Committee, whose outgoing chair, California Democrat Henry Waxman, is closely identified with the law and its consumer-group backers.

“… this only applies to big business …”

The union- and trial-lawyer-backed Paycheck Fairness Act, which would greatly expand the scope of lawsuits against private employers alleging gender pay inequality, has run into considerable resistance in Congress. The Bangor Daily News, for example, notes that middle-of-the-road Maine Sens. Olympia Snowe and Susan Collins, known for their willingness to support some Democratic initiatives, have criticized the PFA as “broad,” “unprecedented,” and costly to employers (Snowe) and as likely to “impose excessive litigation on the small-business community” (Collins).

Democratic Rep. Chellie Pingree (D-Maine), on the other hand, is impatient with all such objections:

“If there is litigation in the future, that is minor compared to making sure that people get fair pay for the work that they do,” Pingree said. “It is also important to say that this only applies to big business, this does not apply to the sandwich shop around the corner.”

What do you think she means by “only applies to big business” and not “the sandwich shop around the corner”? Keith Smith at ShopFloor checked out the language of the bill, which by its own terms would affect employers subject to the federal Fair Labor Standards Act of 1938. Does the FLSA apply “only … to big business”? No; according to the U.S. Department of Labor, it covers “almost every employee working in the United States.” To begin with, the law covers all employers that have two or more employees and do at least $500,000 a year in business. But that’s just the start, as Smith explains:

Even if a business meets these thresholds, the only employees who would not be covered by the FLSA would be the ones who do not produce goods for interstate commerce, or closely-related process or occupation directly essential to such production, who are not involved in domestic service and are not engaged in interstate commerce. So that means if an employee makes a phone call to another state, sends mail to another state, travels to other states or even processes credit card transaction [he or she] is engaged in “interstate commerce”.

It sounds as if Rep. Pingree has a distinctive, not to say eccentric, understanding of what constitutes “only … big business”.