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Home Depot Will Pay Settlement for Lead-Safety Violations

Home Depot’s settlement for alleged violations is the highest civil penalty issued under the Toxic Substances Control Act.

Home Depot Inc.  (HD) - Get Home Depot, Inc. Report will pay $20.75 million in a settlement for alleged lead-safety violations in home renovations, the Environmental Protection Agency (EPA) said on Thursday.

The Atlanta, Georgia-home improvement retailer sent uncertified firms to do renovation projects and now is set to pay $750,000 to Utah, $732,000 to Massachusetts, and $50,000 to Rhode Island.

The settlement is the highest civil penalty issued under the Toxic Substances Control Act so far EPA said in a statement.

"Today's settlement will significantly reduce children's exposure to lead paint hazards," said Susan Bodine, assistant administrator for EPA's Office of Enforcement and Compliance Assurance.

The agency investigated five complaints from Illinois, Maine, Michigan, Minnesota, and Wisconsin where the firms didn’t use lead-safe work practices, perform post-renovation cleaning, provide EPA-required lead-based paint pamphlets or maintain appropriate records.

“These were serious violations. The stiff penalty Home Depot will pay reflects the importance of using certified firms and contractors in older home renovations,” said Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division.

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Home Depot will implement a companywide program to ensure that the firms and contractors it hires are certified to follow lead-safety measures. That includes avoiding the spread of lead dust and paint chips during home renovations.

"These instances do not represent our high standards and expectations," a Home Depot spokeswoman said in an email, according to the Wall Street Journal. "When we found out about this, we moved quickly to contact all customers who might have been impacted and we significantly strengthened our lead safety systems and approach."

Home Depot is also required to implement an electronic system, under the settlement, that verifies contractors’ certifications, requiring contractors to provide a detailed compliance checklist, and conducting on-site inspections

Contractors hired for renovation, repair, and painting projects in homes built before 1978—when residential lead-based paint use was banned—must be certified by the EPA.

Last month, Home Depot Inc. posted stronger-than-expected third-quarter earnings while noting it plans to spend around $1 billion on bonuses and compensation increases for its frontline workers.

Home Depot said earnings for the three months ending on November 1 were pegged at $3.18 per share, up 25.7% from the same period last year and 13 cents ahead of the Street consensus forecast. Group revenues, Home Depot said, rose 23% to $33.5 billion, again topping analysts' estimates of a $32 billion tally.