[Federal Register Volume 73, Number 83 (Tuesday, April 29, 2008)]
[Notices]
[Pages 23198-23200]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9263]


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CONSUMER PRODUCT SAFETY COMMISSION

[CPSC Docket No. 08-COO12]


Gildan Activewear SRL, a corporation, Provisional Acceptance of a 
Settlement Agreement and Order

AGENCY: Consumer Product Safety Commission.

ACTION: Notice.

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SUMMARY: It is the policy of the Commission to publish settlements 
which it provisionally accepts under the Consumer Product Safety Act in 
the Federal Register in accordance with the terms of 16 CFR 1118.20(e). 
Published below is a provisionally-accepted Settlement Agreement with 
Gildan Activewear SRL, containing a civil penalty of $35,000.00.

DATES: Any interested person may ask the Commission not to accept this 
agreement or otherwise comment on its contents by filing a written 
request with the Office of the Secretary by May 14, 2008.

ADDRESSES: Persons wishing to comment on this Settlement Agreement 
should send written comments to the Comment 08-COO12, Office of the 
Secretary, Consumer Product Safety Commission, 4330 East West Highway, 
Room 502, Bethesda, Maryland 20814-4408.

FOR FURTHER INFORMATION CONTACT: Dennis C. Kacoyanis, Trial Attorney, 
Legal Division, Office of Compliance and Field Operations, Consumer 
Product Safety Commission, 4330 East West Highway, Bethesda, Maryland 
20814-4408; telephone (301) 504-7587.

SUPPLEMENTARY INFORMATION: The text of the Agreement and Order appears 
below.

    Dated: April 23, 2008.
Todd A. Stevenson,
Secretary.

In the Matter of Gildan Activewear SRL, a Corporation.; CPSC DOCKET NO. 
08-C0012

Settlement Agreement

    1. In accordance with 16 CFR 1118.20, Gildan Activewear SRL 
(``Gildan'') and the staff (``Staff'') of the United States Consumer 
Product Safety Commission (``Commission'') enter into this Settlement 
Agreement (``Agreement''). The Agreement and the incorporated attached 
Order (``Order'') settle the Staff's allegations set forth below.

Parties

    2. The Commission is an independent federal regulatory agency 
established

[[Page 23199]]

pursuant to, and responsible for the enforcement of, the Consumer 
Product Safety Act, 15 U.S.C. 2051-2084 (``CPSA'').
    3. Gildan is a corporation organized and existing under the laws of 
Barbados, with its principal offices located in St. Michael, Barbados. 
At all times relevant hereto, Gildan sold apparel and accessories.

Staff Allegations

    4. Between January 2006 and September 2006, Gildan manufactured 
146,466 youth hooded sweatshirts with drawstrings through the hoods for 
sale in the United States (``Drawstring Sweatshirts'').
    5. Wholesale distributors sold the Drawstring Sweatshirts to 
consumers.
    6. The Drawstring Sweatshirts are ``consumer product[s],'' and, at 
all times relevant hereto, Gildan was a ``manufacturer'' of those 
consumer products, which were ``distributed in commerce,'' as those 
terms are defined in CPSA sections 3(a)(1), (4), (11), and (12), 15 
U.S.C. 2052(a)(1), (4), (11), and (12).
    7. In February 1996, the Staff issued the Guidelines for 
Drawstrings on Children's Upper Outerwear (``Guidelines'') to help 
prevent children from strangling or entangling on neck and waist 
drawstrings. The Guidelines state that drawstrings can cause, and have 
caused, injuries and deaths when they catch on items such as playground 
equipment, bus doors, or cribs. In the Guidelines, the Staff recommends 
that there be no hood and neck drawstrings in children's upper 
outerwear sized 2T to 12.
    8. In June 1997, ASTM adopted a voluntary standard, ASTM F1816-97, 
that incorporated the Guidelines. The Guidelines state that firms 
should be aware of the hazards and should be sure garments they sell 
conform to the voluntary standard.
    9. On May 19, 2006, the Commission posted on its Web site a letter 
from the Commission's Director of the Office of Compliance to 
manufacturers, importers, and retailers of children's upper outerwear. 
The letter urges them to make certain that all children's upper 
outerwear sold in the United States complies with ASTM F1816-97. The 
letter states that the Staff considers children's upper outerwear with 
drawstrings at the hood or neck area to be defective and to present a 
substantial risk of injury to young children under Federal Hazardous 
Substances Act (``FHSA'') section 15(c), 15 U.S.C. 1274(c). The letter 
also notes the CPSA's section 15(b) reporting requirements.
    10. Gildan reported to the Commission that there had been no 
incidents or injuries from the Drawstring Sweatshirts.
    11. Gildan's manufacture and distribution in commerce of the 
Drawstring Sweatshirts did not meet the Guidelines or ASTM F1816-97, 
failed to comport with the Staff's May 2006 defect notice, and posed a 
strangulation hazard to children.
    12. On September 20, 2006, the Commission, in cooperation with 
Gildan, announced a recall of Drawstring Sweatshirts, informing 
consumers that they should immediately remove the drawstrings to 
eliminate the hazard.
    13. Gildan had presumed and actual knowledge that the Drawstring 
Sweatshirts distributed in commerce posed a strangulation hazard and 
presented a substantial risk of injury to children under FHSA section 
15(c)(1), 15 U.S.C. 1274(c)(1). Gildan had obtained information that 
reasonably supported the conclusion that the Drawstring Sweatshirts 
contained a defect that could create a substantial product hazard or 
that they created an unreasonable risk of serious injury or death. CPSA 
sections 15(b)(2) and (3), 15 U.S.C. 2064(b)(2) and (3), required 
Gildan to immediately inform the Commission of the defect and risk.
    14. Gildan knowingly failed to inform the Commission about the 
Drawstring Sweatshirts immediately as required by CPSA sections 
15(b)(2) and (3), 15 U.S.C. 2064(b)(2) and (3), and as the term 
``knowingly'' is defined in CPSA section 20(d), 15 U.S.C. 2069(d). This 
failure violated CPSA section 19(a)(4), 15 U.S.C. 2068(a)(4). Pursuant 
to CPSA section 20, 15 U.S.C. 2069, this failure subjected Gildan to 
civil penalties.

Gildan's Response

    15. Gildan denies the Staff's allegations; specifically, as 
follows:
    (a) Gildan did not knowingly violate the CPSA;
    (b) Gildan sold the Drawstring Sweatshirts to wholesale 
distributors, who then, directly or indirectly, sold less than 70,000 
to consumers;
    (c) Gildan, in cooperation with the Commission, announced the 
recall of Drawstring Sweatshirts and recovered all Drawstring 
Sweatshirts still in the possession of wholesale distributors;
    (d) Gildan had access to information that could support the 
conclusion that the Drawstring Sweatshirts were a potential hazard;
    (e) Gildan reported the existence of the potential hazard to the 
Commission immediately upon having actual knowledge of the potential 
hazard; and
    (f) Gildan has reported to the Commission that it had received no 
reports of any injuries from the Drawstring Sweatshirts.

Agreement of the Parties

    16. Under the CPSA, the Commission has jurisdiction over this 
matter and over Gildan.
    17. The parties enter into the Agreement for settlement purposes 
only. The Agreement does not constitute an admission by Gildan, or a 
determination by the Commission, that Gildan knowingly violated the 
CPSA.
    18. In settlement of the Staff's allegations, Gildan shall pay a 
civil penalty in the amount of thirty-five thousand dollars 
($35,000.00) within twenty (20) calendar days of service of the 
Commission's final Order accepting the Agreement. This payment shall be 
by check payable to the order of the United States Treasury.
    19. Upon provisional acceptance of the Agreement, the Agreement 
shall be placed on the public record and published in the Federal 
Register in accordance with the procedures set forth in 16 CFR 
1118.20(e). In accordance with 16 CFR 1118.20(f), if the Commission 
does not receive any written request not to accept the Agreement within 
fifteen (15) calendar days, the Agreement shall be deemed finally 
accepted on the sixteenth (16th) calendar day after the date it is 
published in the Federal Register.
    20. Upon the Commission's final acceptance of the Agreement and 
issuance of the final Order, Gildan knowingly, voluntarily, and 
completely waives any rights it may have in this matter to the 
following: (1) An administrative or judicial hearing; (2) judicial 
review or other challenge or contest of the validity of the Order or of 
the Commission's actions; (3) a determination by the Commission of 
whether Gildan failed to comply with the CPSA and its underlying 
regulations; (4) a statement of findings of fact and conclusions of 
law; and (5) any claims under the Equal Access to Justice Act. Upon 
issuance of, and Gildan's compliance with, the final Order, the 
Commission agrees not to bring a civil penalty action against Gildan 
and each of its successors and assigns based upon the Staff's 
allegations contained herein regarding the Drawstring Sweatshirts.
    21. The Commission may publicize the terms of the Agreement and the 
Order.
    22. The Agreement and Order shall apply to, and be binding upon, 
Gildan and each of its successors and assigns.

[[Page 23200]]

    23. The Commission issues the Order under the provisions of the 
CPSA, and violation of the Order subjects Gildan to appropriate legal 
action in any United States District Court. For purposes of any such 
action, counsel of record agrees to accept service of process.
    24. This Agreement may be used in interpreting the Order.
    Understandings, agreements, representations, or interpretations 
apart from those contained in the Agreement and the Order may not be 
used to vary or contradict their terms. The Agreement shall not be 
waived, amended, modified, or otherwise altered without written 
agreement thereto executed by the party against whom such waiver, 
amendment, modification, or alteration is sought to be enforced.
    25. If any provision of the Agreement and the Order is held to be 
illegal, invalid, or unenforceable under present or future laws 
effective during the terms of the Agreement and the Order, such 
provision shall be fully severable. The balance of the Agreement and 
the Order shall remain in full force and effect, unless the Commission 
and Gildan agree that severing the provision materially affects the 
purpose of the Agreement and the Order.
    26. Pursuant to section 6(d) of the Interim Delegation of Authority 
ordered by the Commission on February 1, 2008, the Commission delegated 
to the Assistant Executive Director for Compliance and Field Operations 
the authority to act, with the concurrence of the General Counsel, for 
the Commission under 16 CFR 1118.20 with respect to Staff allegations 
that any person or firm violated 15 U.S.C. 2068, where the total amount 
of the settlement involves no more than $100,000.

Gildan Activewear SRL.
    Dated: 04/08/08.
By: Michael R. Hoffman,
President, Gildan Activewear SRL, 34 Warrens Street,St. Michael, 
Barbados.
    Dated: 04/08/08.
By: Thomas D. Myriek, Esquire,
Moore & Van Allen, PLLC,
Counsel for Gildan Activewear SRL,
100 North Tryon Street, Suite 4700,
Charlotte, NC 28202-4003.

U.S. Consumer Product
Safety Commission Staff.
J. Gibson Mullen,
Assistant Executive Director, Office of Compliance and Field 
Operations.
Ronald G. Yelenik,
Acting Director, Legal Division,
Office of Compliance and Field Operations.
    Dated: 04/11/08.
By: Dennis C. Kacoyanis, Trial Attorney, Legal Division, Office of 
Compliance and Field Operations.

In the Matter of Gildan Activewear SRL, a corporation.; CPSC DOCKET NO. 
08-C0012

Order

    Upon consideration of the Settlement Agreement entered into between 
Gildan Activewear SRL (``Gildan'') and the U.S. Consumer Product Safety 
Commission (``Commission'') staff, and the Commission having 
jurisdiction over the subject matter and over Gildan, and pursuant to 
the authority delegated in section 6(d) of the Interim Delegation of 
Authority ordered by the Commission on February 1, 2008, and it 
appearing that the Settlement Agreement and the Order are in the public 
interest, it is Ordered, that the Settlement Agreement be, and hereby 
is, accepted; and it is Further Ordered, that Gildan shall pay a civil 
penalty in the amount of thirty-five thousand dollars ($35,000.00). 
This payment shall be made by check payable to the order of the United 
States Treasury within (20) calendar days of service of the 
Commission's Final Order accepting the Agreement. Upon the failure of 
Gildan to make the foregoing payment when due, interest on the unpaid 
amount shall accrue and be paid by Gildan at the federal rate of 
interest set forth at 28 U.S.C. 1961(a) and (b).
    Provisionally accepted and provisional Order issued on the 22nd day 
of April, 2008.

    By Order of the Commission.

Todd A. Stevenson,
Secretary, Consumer Product Safety Commission.
 [FR Doc. E8-9263 Filed 4-28-08; 8:45 am]
BILLING CODE 6355-01-M