Electrolux has agreed to pay a $750,000 civil penalty to settle federal regulators’ claim that it knowingly failed to immediately report defects that sent flames shooting out of wall ovens, causing singed hair and facial burns for customers.
The U.S. Department of Justice announced the settlement Wednesday in a press release. It said the Swedish appliance maker, which has its North American headquarters in Charlotte, knew of 22 reports of flames shooting out of Kenmore wall ovens when the broiler was on.
Federal authorities said Electrolux, which sold about 7,800 of the ovens via Sears and other stores around the United States, knowingly failed to immediately report the hazard. Its sister company, Frigidaire Canada, identified the defect in 2005 and made a design change to fix it in March 2006, the Justice Department said.
An Electrolux spokeswoman said the company denies that it failed to make a timely report.
“We voluntarily reported the issue to the (Consumer Product Safety Commission) six years ago in 2008, and at that time, voluntarily conducted a recall of the product,” said Eloise Hale. “Today’s news is the final step to resolving the matter with the CPSC and we chose to negotiate this settlement to avoid the expense and uncertainty of a suit.”
Electrolux has agreed to create a compliance program to keep track of product safety hazards.
“Manufacturers and distributors of consumer products are required to report product defects and hazards to the Consumer Product Safety Commission immediately and there are penalties for those who fail to do so,” said Stuart Delery, assistant attorney general for the Justice Department’s civil division.
The complaint was filed by the commission in federal court in Georgia’s southern district. It alleged that between February 2006 and November 2007, Electrolux knew of the 22 incidents in which flames shot out of the ovens. Federal officials said the company knew gas could build up in the ovens during broiling, then escape and ignite.
Electrolux’s headquarters was in Augusta, Ga., during the time period in question. The recall of the ovens was announced in 2008.
Electrolux announced in 2009 that it was moving its headquarters to Charlotte’s University Research Park. The company late last year announced plans to roughly double its headquarters workforce by adding 810 workers and spending $85 million on a new six-floor, 375,000-square-foot building.