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When Good Customer Service is an Environmental Crime: Regulators Focus on “Hazardous Waste” from Grocery and Retail Stores

Environmental Law Update Jeremy A. Lite

The oven cleaner your customer says "doesn't work right" and returns to the store can lead to an expensive violation of hazardous waste disposal regulations if not handled properly. The silver polish with the broken cap that is tossed in the garbage when the shelves are restocked can result in a threatened criminal penalty. While stores that sell groceries and household items do not typically think of themselves as generators of hazardous waste, the U.S. Environmental Protection Agency ("EPA") sees things a little bit differently. 

The EPA and certain states, most notably California, have taken a keen interest (some might say, an unusual interest) in inspecting and punishing grocery stores and other retailers for allegedly mishandling "hazardous waste" in the form of returned or damaged consumer products. The EPA's focus on this issue, amid all the world's environmental problems, has prompted recent enforcement actions involving large civil and criminal fines, even where the practices giving rise to government action occurred years ago and resulted in no specific environmental impacts. 

In one recent Consent Agreement entered by the EPA on May 28, 2013, the agency made hay out of allegations that employees of a retail company from time to time accepted returned merchandise and discarded it without knowing about or adhering to potentially applicable hazardous waste requirements under RCRA, FIFRA, and the vast array of EPA regulations. According to EPA, many "common consumer products [that] are spilled or leaking or in a condition such that they cannot be used for their intended purpose, sold, or recycled . . . may be considered hazardous waste under federal or state law."  

As this recent case makes clear, mishandling returned or damaged goods that may qualify under the law as "hazardous waste" can be a real problem for retail stores. Grocery stores and other retailers that sell or use such items (for example, bleach, insect killer, tile cleaner, drain cleaner, chlorine, aerosol products, and more) do not tend to self-identify as sources of hazardous waste. It is not intuitive. For that very reason, ensuring compliance requires the implementation of specific policies and employee training. 

The types of violations EPA or local inspectors will be looking for when they visit you might include: 

  • Failing to make hazardous waste determinations when assessing the status of sold waste;

  • Failing to prepare manifests for the proper tracking of hazardous waste;
  • Relying on hazardous waste transporters who it turned out were not authorized to handle the waste;
  • Sending material to facilities which it turned out not were not permitted to treat, store, or dispose of the waste;
  • Failing to implement emergency planning and training procedures;
  • Failing to properly identify and label containers of hazardous waste.

Another issue that could arise is the return of broken or damaged CFL bulbs. These bulbs contain mercury in small amounts (which has not stopped regulators from preferring them, sometimes requiring them, over non-mercury-containing incandescent light bulbs). As a result, they are regulated waste subject to special handling and disposal requirements. Any program that addresses how employees and managers are to handle returned or damaged hazardous merchandise should include CFL bulbs if your store sells or uses them.

Among other things, a comprehensive waste handling program should consider efforts to:

  • Screen for hazardous waste implications of returned or damaged merchandise.

  • Prepare a list of consumer products used or sold by the store that, if spilled, leaking, or otherwise unusable, should be managed as hazardous waste. Depending on software capabilities, cause the return of such items to automatically signal the employee as to their status.
  • Segregate any such items for proper short-term storage and proper disposal by licensed haulers.
  • Make employees and managers alert to returned or damaged items that might require special handling.
  • Train employees and managers in how to respond when such items are brought to or found in stores.
  • Include environmental compliance responsibilities in certain employee job descriptions.
  • Ensure that hazardous waste is properly labeled and transported with required manifests.
  • Adopt emergency planning and training.
  • Refuse acceptance of damaged cleaning supplies and other such items from suppliers.
  • Possibly not accept certain items for return and instead direct customers to their local Household Hazardous Waste collection site.
  • Properly handle returned or broken CFL bulbs (or prohibit their return).
  • Avoid the accumulation and long-term storage of hazardous waste at individual stores or warehouses.
  • Avoid the transportation of hazardous waste by unlicensed store employees or in unauthorized vehicles.
  • Confirm the authorization of transporters and receiving facilities to accept and properly handle the waste.
  • Avoid the delivery of hazardous items to warehouses, reverse distribution centers, or waste disposal facilities not permitted to accept them.
  • Determine whether stores or warehouses might qualify as conditionally exempt small quantity generators or as larger hazardous waste generators that have to register as such.

Next time the EPA or local regulators stop by for an inspection, make sure your store employees and managers are trained to follow a comprehensive program for handling returned or damaged items that may qualify as hazardous or other regulated waste. The large fines just extracted by EPA in such a case are a good reminder to revisit and, if necessary, revamp your company's policies.

If you think it might be time to review your policy and training regimen to improve compliance or have questions about how to handle specific items, please contact Jeremy Lite in Arizona at (520) 770-8739 / jeremy.lite@quarles.com, George Marek in Wisconsin at (414) 277-5537 / george.marek@quarles.com, or Larry Falbe in Illinois at (312) 715-5223 / lawrence.falbe@quarles.com.