Sephora Disputes “Misleading” Allegations in Clean Beauty Lawsuit

On March 2, 2023, Sephora filed its reply in support of its motion to dismiss proposed class action claims that its “Clean at Sephora” program was false and misleading, disputing allegations that a significant portion of relevant, reasonable consumers were or could be misled about what ‘Clean at Sephora’ means, and that the ingredients permitted by Sephora’s program were potentially harmful to humans.

Sephora’s reply (presumably) concludes preliminary briefing in what has become a closely-watched lawsuit in the beauty and wellness industry over the meaning of the term “clean beauty.” Absent clear regulatory guidance from the FDA and the FTC, companies’ claims involving the terms “clean,” “natural,” “nontoxic,” or “organic” have been scrutinized in social media, and by an increasingly active and organized plaintiffs’ bar.

While it remains to be seen how the court will decide the “Clean at Sephora” case, companies should continue expect more litigation in this area, as what it means for beauty products to be clean, natural, nontoxic, or safe, remains the subject of intense debate.

As explained in our previous publications (here, here, and here), the market for clean beauty is expected to reach an estimated $11.6 billion by 2027. But absent clear regulatory guidance about what it means for beauty products to be “clean,” “natural,” “nontoxic,” or “safe, promoting products as “clean” can carry significant regulatory risks, and leaves the industry ripe for class action litigation.

Sephora launched its “Clean at Sephora” program in 2018. To qualify for inclusion in the program, which spans across various product categories, products must be formulated without certain common cosmetic ingredients—such as parabens, sulfates SLS and SLES, phthalates, formaldehyde and more—that are linked to possible human health concerns.

On November 22, 2023, Plaintiff Lindsay Finster filed a proposed class action lawsuit in the U.S. District Court for the Northern District of New York, alleging that products advertised as part of the “Clean at Sephora” program contain ingredients that are “inconsistent with how consumers understand” the term “clean.”

According to plaintiff, consumers understand the definition of “clean” beauty to mean the dictionary’s definition of “clean”: “free from impurities, or unnecessary and harmful components, and pure.” Thus, to be considered “clean” in the context of beauty, plaintiff alleged that products should be “made without synthetic chemicals and ingredients that could harm the body, skin or environment.” But, as plaintiff contended, “a significant percentage of products with the ‘Clean at Sephora’ [seal] contain ingredients inconsistent with how consumers understand the term.” Consequently, plaintiff alleged that the “Clean at Sephora” program “misleads consumers into believing that the products being sold are “natural,” and “not synthetic” and to paying a price premium based on this understanding.”

Plaintiffs alleged potential class action violations of §§ 349 and 350 of New York’s General Business Law (“NY GBL”), as well as multi-state consumer protection statutes, and breach of express and implied warranty, the Magnuson Moss Warranty Act, fraud, and unjust enrichment claims.

On February 2, 2023, Sephora moved to dismiss plaintiff’s complaint, arguing that “[i]t is not plausible that reasonable consumers are or could be confused by the ‘Clean at Sephora’ program” for several reasons.

First, Sephora argued that plaintiff relied on unsupported and conclusory allegations about consumers understanding of the word “clean.” While plaintiff argued that consumers understood the definition of “clean” beauty to mean the products made without synthetic chemicals and or potentially harmful ingredients, Sephora countered that plaintiff failed to plead any facts showing that a significant portion of relevant reasonable consumers could be misled by Sephora’s claims into believing that the “Clean at Sephora” program consisted of only natural products and ingredients. As Sephora noted, words like “natural,” “organic,” and the like never appeared on the label or elsewhere. Instead, plaintiff relied upon “on selectively quoted blog posts and webpages from small businesses, which not only lack reliability and authority but are presented without evidence that any significant number of consumers have even read them, let alone agreed with them.”

Second, Sephora argued that plaintiff mischaracterized Sephora’s representations as being about the kinds of ingredients included in the program, rather than excluded. Thus, plaintiff was attempting to turn “Clean at Sephora” into “Natural at Sephora”—claims that Sephora did not make. On the contrary, Sephora’s marketing for the program focused on the exclusion of certain ingredients linked to potential human health outcomes. Because Sephora made no representations about the products or ingredients included, it argued that it could not mislead consumers about the safety of included products or ingredients in the program. Moreover, plaintiff failed to plausibly allege that any of the ingredients included in the program were potentially harmful, relying instead on a series of unattributed and unsubstantiated blog posts.”

Finally, Sephora rejected plaintiff’s contention that it forced consumers to scrutinize product lists in contradiction of the Second Circuit’s 2018 decision in Mantikas v. Kellogg, which prohibits the use of ingredient lists on the side of packaging to clarify otherwise misleading presentations where plaintiff failed to identify any misleading conduct by Sephora.

Sephora also rejected plaintiff’s efforts to seek relief under other unspecified consumer protection statutes, arguing that plaintiff failed to plead how the unspecified consumer protection statutes were similar to the NY GBL, and disputed plaintiff’s breach of warranty, consumer fraud, and unjust enrichment claims as duplicative of plaintiff’s NY GBL claims, or otherwise contingent on the same erroneous premise—that the ‘Clean at Sephora’ label is misleading—and thus, equally deficient.

In opposition to Sephora’s motion to dismiss, plaintiff reiterated that it was sufficiently plausible that reasonable consumers would perceive the “Clean at Sephora” as excluding synthetic ingredients, and that “Clean at Sephora” meant free from potentially harmful ingredients. Plaintiff further contended that resolution of her multi-state claims was not ripe until the class certification stage, and that Sephora’s advertising campaign created an express warranty that “Clean at Sephora” products were formulated without potentially harmful ingredients.

In its reply, Sephora argued that reasonable consumers could not interpret the phrase “Clean at Sephora” as limited to only “natural” ingredients when Sephora “prominently explains, in plain terms, exactly what it means by the phrase: ‘formulated without parabens, sulfates sodium lauryl sulfate (SLS) and sodium laureth sulfate (SLES), phthalates, mineral oils, formaldehyde, and more.’” Sephora also refuted plaintiff’s efforts to characterize the program’s inclusion of the phrase “and more” into an impression that synthetic ingredients were excluded along with the listed ingredients, noting that plaintiff alleged no facts to support her contention that reasonable consumers shared that impression.

Finally, Sephora rejected what it described as plaintiff’s efforts to conflate the meaning of the word “clean” with “non-synthetic” or “natural,” or otherwise assert that because products are not “natural,” they were not safe, noting that not all synthetic ingredients were unsafe, while not all natural ingredients were safe.

MORE TO COME

Too Much Responsibility, Not Enough Pay

A former Ulta manager’s experience working for the beauty retailer has drawn many viewers and sparked discussion among commenters on TikTok. Posted by user Kenya Broadnax (@kbmakeupme24), the two-part retelling of her three years of experience with the company has drawn over half a million views as of Sunday. She has previously shared experiences working for other companies. In her first video, she says she worked for the beauty retailer from 2012 to 2015, starting as a cashier and working her way from a cashiering position up to a prestige manager position.

When she first took her position as a prestige manager within the store, she says she was offered $10 per hour because she did not have a college degree, even though the store’s standard for management was $17 hourly. They eventually agreed to $14 an hour, which she says their payroll specialist called “pushing it.” “The communication was terrible, payroll was terrible, the lack of schedule was terrible,” she says in the video. “We would open the store with two people—a manager and a cashier—and the manager would be in the office the entire time. As the cashier, you’re up at the front by yourself doing returns, doing exchanges, checking customers out, you’re color matching in prestige, you’re helping people, you’re trying to deter theft, all one person doing that entire job for at least two to three hours before someone shows up to cover you.”

During her time at Ulta, she says she did not have the opportunity to take lunch breaks and worked under unprofessional management who were transphobic. In a second video, she says she essentially had too much responsibility for not enough pay and was expected to oversee more than she realistically felt able to with an understaffed team.

The Daily Dot has reached out to Broadnax via Instagram direct message, as well as to Ulta directly via email regarding the video. Several viewers expressed frustration on behalf of the poster and shared that they had similar stories about working for Ulta. “Sometimes I don’t know who Ulta hates more: clients or employees,” one commenter wrote. “That was definitely the company wide culture at that time,” another user said. “I got so fed up I walked out during my shift in 2015.” “Working at Ulta was the worst decision I have ever made in my life,” one user echoed.

Coty Changing The Definitions Of Beauty

One of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, skin and body care, launches a new campaign to change the dictionary definitions of beauty. The #UndefineBeauty campaign recognizes that the current English language definitions of the term ‘beauty’ are outdated and no longer reflect the values of today’s society. Specifically, the examples cited under the current entries for ‘beauty’ across the leading English dictionaries are both limiting and exclusive.

Sue Y. Nabi, Coty’s CEO, has written an open letter to the major Dictionary houses, co-signed by the Company’s Executive Committee and Senior Leadership Team, highlighting the outdated nature of their definitions, and their need for review.

Sue Y. Nabi said, “Seen through the lens of today’s society and values, the definition of beauty hasn’t aged well. Of course, not all people are impacted by, or feel excluded by these definitions. But the implicit ageism and sexism in the examples were born in a different time. We believe it’s time to bridge the gap – time to bring the definition to where society is today. By changing the definition, if more people feel included – feel beautiful – there will be a ripple effect which touches us all.”

“At Coty, we believe that no one can control or dictate what is, or is not, beautiful,” said Sue Y. Nabi. That is why the campaign to #UndefineBeauty aims to ‘undefine’ rather than simply ‘redefine’ beauty, so that no one feels excluded by the definition or examples that accompany it. Founded in Paris in 1904, Coty is one of the world’s largest beauty companies with a portfolio of iconic brands across fragrance, color cosmetics, and skin and body care. Coty serves consumers around the world, selling prestige and mass market products in more than 130 countries and territories. Coty and our brands empower people to express themselves freely, creating their own visions of beauty; and we are committed to making a positive impact on the planet.

Radiance Holdings, Owner of Sola Salons, Bought by TSG

Private equity firm TSG Consumer Partners (“TSG”) has announced the acquisition of a majority stake in Radiance Holdings, a high-growth platform representing a collection of premier brands in the beauty, wellness, and self-care sectors. As part of the transaction, Radiance Holdings’ management team will continue to lead the company. Financial terms of the transaction were not disclosed.

The company, based in Denver, Colo., is committed to investing in its brands, driving innovation, and helping their franchisees and community of independent beauty professionals grow their businesses and improve their lives. Radiance Holdings’ current portfolio is approximately 85 percent franchised and includes the following brands:

  • Sola Salons: Founded in 2004, Sola Salons is the world’s largest and fastest growing salon studios franchise with approximately 650 locations across the U.S. and Canada as of December 2022. Sola Salons rents premium suites to individual beauty care professionals, providing them with more autonomy and better economics than traditional salons.
  • Woodhouse Spas: Founded in 2001, Woodhouse Spas is the largest premium day spa brand in the U.S. with approximately 80 locations across the U.S. as of December 2022. Woodhouse Spas feature a multi-modality platform, anchored by massage and skincare, which brings resort-level quality to convenient neighborhood locations.

“TSG has an impressive track record of building and scaling world-class beauty and franchising brands, and we are thrilled to work with them,” said Christina Russell, CEO of Radiance Holdings. “We couldn’t be more excited to leverage TSG’s resources and expertise as we look to expand our platform and enhance our value proposition for franchisees, beauty care professionals, and consumers across our portfolio. As we build on our momentum and the powerful growth opportunities ahead, it’s critical that we collaborate with a partner that understands our business and has been down a similar road many times with brands that we admire.”

“Radiance Holding is empowering a new generation of beauty professionals seeking to work independently and offer their clientele more control over their salon experience, a trend accelerated by the pandemic,” said Michael Layman, managing director at TSG. “Their portfolio of differentiated brands are exceeding consumer expectations and are well positioned for further growth.”

Pierre LeComte, managing director at TSG, said, “We look forward to partnering with Christina and the management team to continue scaling their national platform in beauty and personal care through a variety of initiatives, including thoughtful digital marketing efforts developed in collaboration with TSG’s Digital Team, accelerated franchise development, strategic acquisitions, and service line extensions.”

Were Is The Labor Force

Those that are keeping status quo attributed it to continuously slow business and a less-than-thriving economy. Salon owners will not be hiring new staff because they can’t afford to pay a living wage, and paying anything less is not in alignment with their morals. Or really with there GREED. Salon owners and corporate hack shacks will not go far anymore. I believe the beauty industry and the cosmetologists that were out of work during the pandemic. Have been given time to rethink there wage standards. And with different generation look at the industry as a waste of time. Especially if some one comes over the border and can get a job at Walmart at $15.00 a hour.

For those salon owners and corporate salons, actively seeking staff, be it stylists, colorists, assistants or receptionists, the quest is unanimously laborious and mostly unfruitful. “Salon owners are finding it more challenging than ever to find young stylists who are passionate about the beauty industry and who want to work more then two to three days a week.” Corporate salons advertise everywhere. Nobody is even looking at our ads for hiring,because all they offer is commissions. THAT’S IT! Some salon owners use the old trick in the industry of poaching from other salons after failed attempts with traditional advertising methods.

The tried and true method of reaching out directly to beauty schools for new licensed graduates is, for now, a thing of the past—most cosmetology schools were closed during the pandemic, likely due to a combination of stay-at-home orders and a widespread aversion to in-person experiences. The industry is simply behind when it comes to pay, benefits etc.

Some salon owners and corporate hacks find the solution is to hire back former employees rather than continue attempts to attract a new workforce. Others who are seeking help turn to resources such as Indeed, Craigslist, Facebook and Instagram. But either way the salon industry is a industry like China who slaves the work force. No pay, no benefits, no vacation. no medical. NOTHING.