Probably the most explosive issue in the professional hairstyling business — the use of formaldehyde in hair straightening solutions — has reached its first settlement.

This story first appeared in the January 31, 2012 issue of WWD. Subscribe Today.

The office of California Attorney General Kamala Harris said on Monday that GIB LCC, the manufacturers of the controversial Brazilian Blowout and Acai Professional Smoothing Solution, must put hazard warnings on its packaging and distribute a cancer warning to recent product purchasers, including it with all future product shipments. It must also alter the content of its Web site and pay $600,000 in fees, penalties and costs associated with the lawsuit. In addition, GIB must retest products for smog-causing volatile organic compounds at Department of Justice-approved laboratories and work with the DOJ to ensure they comply with air quality regulations.

“California laws protect consumers and workers and give them fair notice about the health risks associated with the products they use,” said Harris. “This settlement requires the company to disclose any hazard so that Californians can make more informed decisions.”

According to the Attorney General’s office, this marks the first government action in the U.S. to address the use of formaldehyde gas in Brazilian blowout products. The office also asserts that this is the first law enforcement action under California’s Safe Cosmetics Act, enacted in 2005.

“It’s time for the FDA to take a stand against this company that has a history of deception and consumer disregard,” said Alexandra Scranton of the National Healthy Nail and Beauty Salon Alliance.

The controversy began in October 2010 when a stylist in Oregon complained of eye, nose and throat irritation after administering certain smoothing treatments in the salon where she worked. This launched an investigation into hair smoothing safety that led to California and federal investigations into the matter.

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In November 2010, the California Attorney General’s office filed suit against GIB LLC for violating five state laws, including deceptive advertising. The Attorney General’s office claimed products labeled “formaldehyde-free,” in fact, contained the carcinogen.

“We believe the settlement reached with Attorney General Harris represents a fair and equitable resolution,” said Mike Brady, chief executive officer of the North Hollywood-based company, who adds that there will be no changes to the brand’s formula following the ruling. “Brazilian Blowout will continue to sell its products normally throughout the state of California. The labeling and market and advertising changes agreed to in the settlement have already been in place for months.”

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