The U.S. Consumer Product Safety Commission said Thursday that Burlington Coat Factory Warehouse Corp., of Burlington, N.J., has agreed to pay a civil penalty of $1.5 million to settle a case the agency brought against the firm for failing to report it had illegally sold children’s sweatshirts and jackets with drawstrings at the neck.

This story first appeared in the July 27, 2012 issue of WWD. Subscribe Today.

The penalty is the highest the CPSC has ever assessed for violations involving children’s upper outerwear with drawstrings.

The settlement resolves CPSC allegations that, from 2003 to 2010, Burlington knowingly failed to report to the CPSC, as required by federal law, that it had sold children’s sweatshirts and jackets with drawstrings at the neck. Children’s outerwear with drawstrings, including sweatshirts, sweaters and jackets, poses strangulation and entanglement hazards to children that can result in serious injury or death, as defined by CPSC regulations enacted in July 2011. The settlement also resolves CPSC allegations that, from 2008 to 2012, Burlington knowingly sold or had in its store inventories many of these garments after they had been recalled.

Federal law requires manufacturers, distributors and retailers to report to the CPSC within 24 hours after obtaining conclusive information that a product contains a defect that could create a substantial hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule, regulation, standard or ban enforced by the agency. Federal law also bars selling products that have been recalled by a manufacturer.

The sweatshirts and jackets that are the subject of the penalty were sold by Burlington Coat Factory stores throughout the country. Beginning in 2007, CPSC and the garments’ manufacturers and distributors, as well as Burlington in 2010, announced the recalls of these garments. In agreeing to the settlement, Burlington denies CPSC allegations that it knowingly violated the law.

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