McDonald's And Government Resolve Safety Dispute

The U.S. Consumer Product Safety Commission (CPSC) and the United States Department of Justice jointly announced today an agreement with McDonald's Corporation in which the restaurant chain will finance a $5 million safety campaign to be overseen by the CPSC and will report to the CPSC any future defects in playground equipment at its restaurants' playgrounds.

The agreement resolves a dispute over whether McDonald's had an obligation to report defective playground equipment at its restaurants. The CPSC alleges that McDonald's became aware of numerous injuries, including broken bones, to children who played on the "Tug-N- Turn" merry-go-round rides installed between 1982 and 1987, but did not report the information to the CPSC. The CPSC maintains that defective equipment should have been reported under the Consumer Product Safety Act, 15 U.S.C. 2064(b).

McDonald's asserts that it was not required by the Act to report such information and had taken various good faith actions to correct the defect. Hardware at the base of some of the rides could catch the shoestrings and clothing of children playing on them. Ultimately, to solve the problem, McDonald's immobilized or removed any of the remaining rides at its restaurants.

In signing the settlement agreement, McDonald's denied that it had a statutory reporting obligation because it was not a "manufacturer," "distributor" or "retailer" of the Tug-N-Turns under the Act. However, under the agreement it will report to the CPSC whenever it obtains information which reasonably supports the conclusion that a piece of playground equipment at a McDonald's restaurant contains a defect which could create a hazard or presents an unreasonable risk. A monetary penalty of up to $5 million, more than three times the maximum fine provided by the Act, is provided by the agreement for a knowing failure to report future defects. To further ensure compliance with the agreement, McDonald's will perform regular safety audits of its restaurants.

CPSC Chairman Ann Brown stated, "Companies that focus on our kids must be especially vigilant about protecting them from hazardous consumer products."

As part of the agreement, the CPSC and McDonald's will work together on a major safety campaign to help parents and their children prevent injuries associated with some consumer products. This national campaign will be announced in the near future.

Chairman Brown expressed her appreciation to Assistant Attorney General Frank Hunger and the Civil Division of the U.S. Department of Justice, which negotiated the agreement on the CPSC's behalf. Mr. Hunger stated, "This is an innovative agreement which is an example of how the government can, in appropriate cases, work with private companies to resolve regulatory disputes in the public interest without litigation."