Lumber Liquidators will pay $2.5 million as part of a settlement with California environmental regulators over chemicals in its Chinese-made laminate flooring.
The Virginia-based hardwood flooring company and the California Air Resources Board each announced the agreement Tuesday.
CARB officials said that its testing of Lumber Liquidators flooring samples between September 2013 and May 2015 showed formaldehyde content that was in excess of state limits.
“Companies need to understand we expect compliance with our rules and we will hold those accountable who do not comply," Todd Sax, the board's enforcement chief, said in a statement.
In March 2015, a report by "60 Minutes" disclosed elevated formaldehyde levels in the laminate flooring and sent the company's stock price tumbling.
Although the company disputed the findings of that investigation, it suspended sales of laminate flooring from China amid safety investigations and civil litigation. President and CEO Robert Lynch left the company shortly thereafter.
(AP Photo)Lumber Liquidators said that the settlement also includes voluntary measures to ensure that its flooring complies with CARB formaldehyde standards. The company and CARB will also collaborate to develop a testing program for flooring "to establish new industry standards."
"We believe today's settlement will go a long way in helping us to execute our strategy, which includes rebuilding our brand and communicating — with clarity and candor — the value of our products to our customers and stakeholders," said CEO John Presley.
CARB said that Lumber Liquidators cooperated during the investigation, while the company said that the review concluded without an admission of wrongdoing or findings of formal violations.
Lumber Liquidators also said that CARB recognized a "lack of evidence of actual harm to public health, safety and welfare," but the Centers for Disease Control and Prevention previously recommended reducing exposure to the flooring in question to alleviate respiratory symptoms and reduce cancer risks.