Threat of Prosecution is REAL for Corporate Executives Managing Recalls
09-01-2010
By Mike Rozembajgier
We have discussed before on this blog the many risks associated with recalls – decreased profits, damage to the brand, and legal liability for companies and executives. While criminal investigations and penalties have been threatened for quite some time, regulators are now getting ready to act on those threats. According to a recent CNNMoney article, the Food and Drug Administration (FDA) will soon begin prosecuting senior managers at companies that have issued numerous recalls due to manufacturing violations.
FDA Deputy Chief Counsel Rick Blumberg recently told an industry group that the FDA “would go after executives at companies that seem to be flouting the FDA’s rules.” “Very soon, and I have no one particular in mind, some corporate executive is going to be the first in a long line,” Blumberg said. With the recent increase in recalls of FDA-regulated products, it is difficult to predict who the agency may want to single out as an example.
Now more than ever, manufacturers and retailers must make sure that their employees understand the rules, regulations and standards that govern their industries, not only during a recall but during normal business operations. Having a record of no recalls is obviously the best way to protect the company and its executives. But that requires strict compliance across every aspect of your company’s internal operations, as well as close oversight of suppliers and vendors to ensure that a substandard ingredient or component doesn’t lead to an FDA or CPSC violation.
Then, during a recall, it should be your priority to demonstrate that consumer safety is paramount by quickly recalling the product, fully cooperating with regulators, and communicating openly with the public. If any of these steps are mishandled during the recall process, the financial and reputation costs could be significant. And you can count on the fact that an ineffective recall will cause regulators to consider bringing legal action.
The only thing worse for your company than a recall is a mismanaged recall, one that poses increased risk to consumers and further damages your brand. Although the recall process can be complicated and cumbersome, you should understand the major risks of failing to effectively manage a recall and the need to prepare now for the potential challenges ahead. But remember, while there is a lot that a company can do to educate employees, prepare for the recall crisis, and protect itself from many of the risks, a corporation cannot serve jail time.
While the FDA has yet to bring criminal charges against anyone involved in a botched recall, you can expect the agency eventually to make an example of someone. Regulators are ready to take legal action against executives and managers it believes are responsible for threatening consumer safety. Will you be first?
Stericycle ExpertRECALL™ is the industry leader in recall logistics and regulatory compliance for consumer product, pharmaceutical, medical device, juvenile product, and food and beverage recalls. ExpertRECALL’s professionals are experts in recall management who can help you streamline the entire product recall process.
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