Johnson Health Tech Co. Ltd, Taiwan, and Johnson Health Tech North America Inc., Cottage Grove, Wisconsin, have agreed to pay a $3 million civil penalty to the U.S. Consumer Product Safety Commission (CPSC).
The agreement, announced Aug. 14, settles CPSC staff's charges that Johnson Health Tech knowingly failed to report to the CPSC a defect and unreasonable risk of serious injury with Matrix Fitness Ascent Trainers and Elliptical Trainers. The agreement can be read in full at the bottom of this page.
Johnson Health Tech did not admit to the CPSC staff's charges and issued a statement on the matter, which can be read in full toward the bottom of this page. The penalty agreement was accepted provisionally by the CPSC by a 3 to 2 vote.
The defect involved a buildup of moisture in the power sockets of the units from perspiration or cleaning liquids, which caused the machines to short circuit. Between March 2012 and October 2013, Johnson Health Tech received multiple reports of smoking, sparking or melted power components and reports of fires involving the trainers. There were no injuries or property damage reported from the incidents.
Johnson Health Tech implemented two design changes to fix the problem. However, Johnson Health Tech failed to report the defect, the consumer incidents or the design changes to the CPSC within 24 hours, according to the CPSC.
The Matrix Fitness Ascent Trainers and Elliptical Trainers were recalled in January 2014 after Johnson Health Tech manufactured, imported and sold more than 3,000 units worldwide. The trainers were sold from September 2011 through December 2012 for between $6,000 and $11,000 each.
In addition to paying the civil penalty, Johnson Health Tech North America has agreed the company has, and will maintain, a compliance program to ensure compliance with the Consumer Product Safety Act (CSP) and a related system of internal controls and procedures.
The compliance program requires written standards, policies and written procedures to ensure that all information regarding the firm's compliance with the CPSA, including reports and complaints, is conveyed to the firm's responsible employees, whether an injury is referenced or not.
The compliance program must also address:
- confidential employee reporting of compliance concerns to a senior manager;
- effective communication of compliance policies and procedures, including training;
- senior management responsibility for and board oversight of compliance; and
- requirements for record retention.
Johnson Health Tech released the following statement regarding the settlement:
Johnson Health Tech (JHT) has entered into a settlement agreement with the U.S. Consumer Product Safety Commission (CSPC) related to a voluntary recall of commercial elliptical trainers and Ascent Trainers dating back to January 2014. In the settlement, the CPSC claims it sought a fine because JHT failed to report an issue with these products to the agency in a timely manner.
JHT has a long history of working cooperatively with the CPSC to proactively report and voluntarily recall products when appropriate, and this case is no different. JHT voluntarily initiated a recall after it reported an issue that the CPSC has acknowledged did not involve any injuries or property damage. Given these circumstances, JHT does not believe a fine was warranted but chose to settle with the CPSC to avoid the expense and delay of litigation and to maintain its cooperative relationship with the agency.
JHT has always taken a proactive stance when it comes to the health and safety of its customers – safety is a top priority. JHT will continue to invest in its people, processes and systems to ensure the company leads the industry when it comes to the delivery of products that are safe, reliable, and help people live healthier lives.