60 Minutes exposed the health and safety violations related to Lumber Liquidators' Chinese-made laminate flooring in a report that aired on CBS March 1. According to its investigation, reported on by Anderson Cooper, 60 Minutes found that Lumber Liquidators’ laminate flooring made in China contains amounts of toxic formaldehyde that may not meet health and safety standards. The report can be found by visiting: http://www.cbsnews.com/news/lumber-liquidators-linked-to-health-and-safety-violations
With more than 360 stores in 46 states and revenues of more than $1 billion per year, Toano, Va.-based Lumber Liquidators is the largest seller of hardwood flooring in North America.
As noted in the 60 Minutes report, Denny Larson, executive director of Global Community Monitor and Richard Drury, an environmental attorney, tested Lumber Liquidator’s Chinese-made laminate flooring. According to their testing of more than 150 boxes of flooring obtained from Lumber Liquidators stores in California, they found a number of the products contained levels of formaldehyde that exceed industry standards, particularly those of the California Air and Resources Board (CARB).
“The average level in Lumber Liquidators’ products that we found was over six to seven times above the state standard for formaldehyde. And we found some that were close to 20 times above the level that’s allowed to be sold,” said Drury in the 60 Minutes report.
Formaldehyde is found in some of the cheap glues used by factories to bind wood particles together to make the core boards in laminate flooring. While it is legal for flooring to contain low levels of formaldehyde, the amounts found in Lumber Liquidators’ Chinese-made laminate flooring exceeded industry standards, according to the 60 Minutes report.
While Drury and Larson tested laminate products sold in California, 60 Minutes said it did its own testing of 31 random boxes of Lumber Liquidators’ Chinese-made laminate products sold in Virginia, Florida, Texas, Illinois and New York. Only one box was compliant with formaldehyde emissions standards.
Following intel that Lumber Liquidators’ mills in China did not adhere to industry standards regarding formaldehyde use, 60 Minutes sent its investigators with hidden cameras to three Chinese mills that produce Lumber Liquidators products, posing as potential buyers. While there, they were told that employees will stack non-CARB-compliant laminate products under CARB-compliant signage.
According to the 60 Minutes report, “Employees at the mills openly admitted that they use core boards with higher levels of formaldehyde to make Lumber Liquidators laminates, saving the company 10 to15 percent on the price. At all three mills, they also admitted to falsely labeling the company’s laminate flooring as CARB 2, meaning it meets California formaldehyde emissions standards, and the new U.S. federal law.”
Lumber Liquidators founder and chairman Tom Sullivan was interviewed by Cooper during the 60 Minutes report and stated that the company’s specs are made to California’s standards, the mills are licensed by California and it has inspectors that double check the mills and the products they make.
“Our goal is to sell a good product at a good price. And we don’t get the price by skimping on anything. We get the price by low overhead, huge volume and being very efficient at what we do. And we’re not going to sell something unsafe,” he said in the interview, adding, “I don’t know the whole situation here. I will guarantee we’ll be in that mill tomorrow and test it. And that is not anything we condone in any way, to save a cent.”
Following the 60 Minutes report Lumber Liquidators posted on its Facebook page that, "These attacks are driven by a small group of short-selling investors who are working together for the sole purpose of making money by lowering our stock price. They are using any means to try and scare our customers with inaccurate allegations. Their motives and methods are wrong and we will fight these false attacks on all fronts."
In addition, Lumber Liquidators issued a statement March 2 saying it complies with applicable regulations set by CARB.
“Although the CARB regulations only apply in California, we adhere to these standards everywhere we do business. Every manufacturer of fiberboard cores used in our products is certified in accordance with CARB regulations. We have documentation to support each step of our production process, including vendor agreements, vendor invoices, CARB certificates, and test results, to serve as further proof that our processes, practices and products are compliant across the board,” the company said, adding, “We believe that 60 Minutes used an improper test method in its reporting that is not included in CARB's regulations and does not measure a product according to how it is actually used by consumers. Our laminate floors are completely safe to use as intended. In our attempt to be fair and transparent, we provided significant testing results to 60 Minutes, including the results of the random testing performed on products from each of our laminate suppliers. We also went to great lengths to document issues between the validated test method and that used by 60 Minutes. Our Chairman addressed the differences and our position on the test methodology but 60 Minutes chose not to include it.”
This is not the first time Lumber Liquidators has been in the hot seat. The company has been under federal investigation since 2013 for allegedly purchasing timber illegally harvested in Russia.
Lumber Liquidators' stock was down 21 percent in the early afternoon of March 2 after trading finally started around 11:15 a.m. (EST); shares had fallen 24.8 percent before the market opened that day, as reported by Reuters.
