Lawsuit: L'Oreal Used Banned Chemicals in Foreign Sales

July 17, 2008— -- Cosmetics giant L'Oreal USA sold products overseas containing potentially carcinogenic chemicals, falsely advertised products containing animal-derived ingredients as "100 percent vegan," and failed to comply with regulatory laws, according to a lawsuit filed by the company's former regulatory affairs director.

Jerome Chevallier claims he was fired after he complained to his superiors about allegedly unlawful activities. He says the company sold Maybelline products in South America that contain carcinogenic chemicals, and that company management deleted formulae -- for products allegedly containing illegal levels of a preservative -- from internal computers, to avoid scrutiny from company regulators.

None of the products were being sold in the United States, and the chemicals allegedly used by L'Oreal USA are not banned in this country.

Chevallier, formerly head of regulatory affairs for the U.S. branch of the French company, and his lawyer declined to comment or elaborate on the claims made in the lawsuit.

In a statement, L'Oreal USA said it had investigated the complaint and "unequivocally denies these allegations. It is our policy that we do not comment on ongoing litigation, but the company intends to vigorously defend itself in this lawsuit.

"L'Oreal is committed to upholding the highest standards of safety for all the products it makes," the statement said. "All the products marketed by the L'Oreal Group are in full compliance with FDA regulations, as well as the European Union Cosmetic Directive, and the requirements for safety in the more than 130 countries where its products are sold."

Chevallier's lawsuit claims that L'Oreal sold Maybelline products in South America containing dibutyl phthalate, "a material banned in those countries for its carcinogenicity and risks to reproduction."

Though the chemical is legal in the United States, it has been banned in Europe, and L'Oreal publicly said in 2005 that it would stop using it.

The lawsuit also claims that L'Oreal ignored its own policies by selling products in Europe that contain a refrigerant; sold deodorant containing "banned" Triclosan, an anti-microbial agent, despite public statements that it would no longer use the chemical; and falsely advertised its PureOlogy brand as "100 percent vegan," even though the products under that name contained animal-derived ingredients.

Chevallier also claims that products sold in Europe apparently contained unlawful levels of a preservative known as Kathon CG, but that the formulae for the products were removed from the company computer system. Kathon CG, often used in shampoo, has been linked to dermatitis when used at high levels.

Chevallier maintains he was harassed and ultimately fired after he complained. He is asking for compensatory and punitive damages and to be reinstated at L'Oreal.

Though the Food and Drug Administration prohibits marketing cosmetics that contain poisonous substances, it does not approve cosmetics before they are sold and cannot, by itself, order a recall, according to the FDA Web site.

European countries are far more active in regulating which chemicals may be used in cosmetics, said Stacy Malkan, spokeswoman for Campaign for Safe Cosmetics.

A report published last year by the Campaign for Safe Cosmetics found that some lipsticks, including L'Oreal products, contained lead. At the time, L'Oreal told ABC News that all its products are in compliance with FDA regulations, and that it upholds the highest standards of safety for its customers.