EKO USA, Agrees to $1 Million Civil Penalty, Compliance Program for Failure to Report Defective Trash Cans

EKO 80L Motion Sensor Trash Can

CPSC announced today that EKO Development, Ltd., and EKO USA, LLC (collectively, EKO), have agreed to pay a $1 million civil penalty.

WASHINGTON, D.C. – The U.S. Consumer Product Safety Commission (CPSC) announced today that EKO Development, Ltd., and EKO USA, LLC (collectively, EKO), have agreed to pay a $1 million civil penalty.
The settlement resolves CPSC staff’s charges that EKO knowingly failed to report to CPSC, as required by law, that its EKO Sensible Eco Living Trash Cans contained a defect or created an unreasonable risk of serious injury.
CPSC staff charged that the black plastic protective collar in the opening on the back of the trash can receptacle can detach from the sharp metal handle, posing a laceration hazard to consumers.  EKO received complaints from consumers who sustained lacerations including serious injuries from the sharp metal handle of the trash cans, and the company approved a design change to add a two-piece plastic cover to address the laceration hazard. However, EKO did not immediately notify the CPSC of the defect or risk, as required by law.  
On July 17, 2015, EKO and CPSC announced a joint recall of 367,000 trash cans. The trash cans were sold exclusively at Costco Wholesale Corporation throughout the United States, from December 2013 through May 2015, for $50.
The agreement was compromised by the Commission under its statutory obligation to consider the appropriateness of the penalty to the size of the business, including how to mitigate undue adverse economic impacts on small businesses. In addition to paying the $1 million civil penalty, EKO has agreed to create, maintain and enforce a compliance program designed to ensure compliance with the CPSA, and to provide written affirmation that EKO has implemented and will enforce such a program.  EKO also agreed to implement a system of internal controls and procedures to ensure that EKO reports information to the Commission in accordance with applicable law.
EKO’s settlement of this matter does not constitute an admission of CPSC staff’s charges.
The penalty agreement has been accepted provisionally by the Commission by a 3 to 2 vote.
Dissenting Opinion of Commissioner Robert S. Adler and Commissioner Elliot F. Kaye