Olaplex Lawsuit Updates: Hair Loss Dismissal and $47.5M Settlement

The Olaplex lawsuit that drew the most attention, a product liability case brought by 28 women alleging hair loss and scalp injuries, was dismissed in July 2023. It was not the only case. A securities fraud class action settled for $47.5 million in late 2025, a shareholder derivative action settled in 2026 with governance reforms, and a California consumer class action over “Made in USA” labeling settled for $5 vouchers to buyers. In March 2026, Henkel agreed to acquire Olaplex for roughly $1.4 billion.

The Hair Loss Lawsuit

In February 2023, 28 women sued Olaplex Holdings, Inc. and co-manufacturer Cosway Co., Inc. in the U.S. District Court for the Central District of California. The case, Albahae et al. v. Olaplex Holdings, Inc. et al. (No. 2:23-cv-00982-RGK-PLA), alleged the products caused hair loss, scalp irritation, blistering, and other injuries.¹

The plaintiffs identified several ingredients as culprits. Lilial, a fragrance chemical the European Union classified as a reproductive toxicant, appeared in Olaplex No. 3 Hair Perfector and No. 2 Bond Perfector until early 2022. The suit also alleged that a combination of sodium benzoate with ascorbic or citric acid in certain formulas could generate benzene, a known carcinogen.² Other complaints targeted panthenol, unnamed skin irritants, and plasticizing agents like glycol that the plaintiffs said weakened hair rather than repairing it.¹

The claims included false advertising, based on marketing describing the products as “scientifically proven,” “safe for all hair,” and free from harsh chemicals; concealment and failure to warn, alleging the company hid consumer complaints and never issued a recall; and product liability, asserting the products were unreasonably dangerous. The complaint also accused Olaplex of using paid influencer endorsements and unauthorized celebrity images to project safety.¹

Dismissal

The case never reached trial. On July 11, 2023, the court granted Olaplex’s motion to sever, finding insufficient commonality among the 28 plaintiffs’ injuries and the products involved. All plaintiffs were dismissed without prejudice, meaning they could refile individually.³¹ The first named plaintiff later dismissed her remaining claim voluntarily.

Olaplex’s Response

Olaplex denied every allegation. Then-CEO JuE Wong posted a video calling the claims “misinformation” and “not true.”⁴ The company pointed to human repeat insult patch tests by independent labs, which it said showed no sign that its products cause skin irritation or sensitization.³ On hair loss, Olaplex cited the American Academy of Dermatology’s guidance that shedding 50 to 100 strands daily is normal, and attributed complaints to diet, stress, health conditions, and the aftereffects of COVID-19.

Some outside experts noted the testing’s limits. Dermatologist Susan Massick said the patch studies involved only about 100 participants over a limited period and that “issues may not become apparent until used in a wider population, with ongoing use and exposure.”⁵ Other dermatologists said adverse reactions were likely individual allergic responses, and no medical studies had linked lilial to hair loss specifically.

The Lilial Question

Much of the public attention latched onto lilial, a synthetic fragrance ingredient used in Olaplex No. 3 and No. 2. In May 2020, the European Commission classified lilial as “reprotoxic,” meaning it is presumed to harm fertility and fetal development. Effective March 1, 2022, the EU banned it from cosmetic products.⁶ A wave of TikTok videos claimed Olaplex No. 3 itself had been “banned.” Industry observers called that misleading: the ban covered one ingredient, not the product, and Olaplex had already begun reformulating.⁷

Olaplex says it stopped selling products containing lilial in the U.K. and EU in January 2022 and removed the ingredient from all products globally by February 2022. The company said lilial was never an active ingredient, was used in small amounts for fragrance, and that its removal did not change performance or scent.⁶³ No U.S. regulatory action was taken against the products.

Securities Fraud Class Action and $47.5 Million Settlement

Investors brought a separate case, Lilien v. Olaplex Holdings, Inc. (No. 22-CV-08395-SVW), in the Central District of California, alleging that Olaplex’s September 2021 IPO documents contained materially false or misleading statements. The company had sold more than 84 million shares at $21 per share, and the suit contended the offering obscured the impact of regulations on the business and downplayed product safety risks.⁸

On February 7, 2025, Judge Stephen V. Wilson let claims proceed against Olaplex and individual defendants concerning two risk factor statements on the potential impact of laws and regulations, risk factor statements about product safety, and alleged omissions of material information. Claims against the underwriters and selling stockholders were dismissed as time-barred.⁸

The case settled for $47.5 million, with a Final Order and Judgment entered on December 5, 2025. The class covered anyone who purchased or acquired Olaplex common stock on or before November 12, 2021, traceable to the IPO documents. The claims deadline was November 24, 2025.⁹

Shareholder Derivative Settlement

Shareholders also sued Olaplex’s officers and directors directly in In re Olaplex Holdings, Inc. Stockholder Derivative Litigation (Lead Case No. 2:23-cv-09712-SVW-SK). They alleged that between September 29, 2021, and February 28, 2023, executives made false and misleading statements in SEC filings and proxy solicitations about the impact of regulations and product safety risks.¹⁰

The consolidated action, which folded in Hutchinson v. Advent International Corporation, et al. and a books-and-records demand, settled on April 24, 2026. Olaplex agreed to adopt corporate governance reforms and maintain them for at least 3.5 years. Defendants’ insurers agreed to pay $700,000 in attorneys’ fees and expenses, subject to court approval. The defendants denied all allegations of wrongdoing.¹⁰¹¹ The court granted preliminary approval on May 7, 2026, with a final hearing set for July 27, 2026.

“Made in USA” Consumer Settlement

A separate consumer class action focused on labeling, not safety. In Atamian v. Olaplex, Inc., et al. (No. 37-2024-00018492-CU-BT-CTL), filed in San Diego County Superior Court, plaintiff Miray Atamian alleged that multiple Olaplex products contained foreign-sourced ingredients accounting for more than 10% of the final wholesale value, violating California’s Made in USA statute and other consumer protection laws.¹² The complaint identified foreign-sourced ingredients in Olaplex No. 3, No. 4, No. 5, and No. 7, ranging from plant oils to surfactants. Olaplex denied the allegations and said its contract manufacturers for those products were located in the United States.¹³

The court granted final approval on July 11, 2025. Eligible class members, defined as anyone who purchased covered Olaplex products in the United States between February 7, 2019, and September 6, 2024, received a $5 voucher toward an Olaplex website purchase. Distribution of voucher codes began October 13, 2025.¹⁴ Olaplex agreed not to oppose up to $1,053,999 in attorney fees and costs, $291,001 for notice and claims administration, and a $5,000 service award for Atamian, capped at a combined $1,350,000 paid separately from the vouchers.¹³

Where Olaplex Stands Now

The company’s stock lost nearly 95% of its value from the IPO price, falling below $1.50 per share by early 2026 after a late-2021 opening at $25. U.S. net sales fell 47.8% in fiscal 2023, and net income dropped 74.8%.¹⁵¹⁶¹⁷

On March 26, 2026, Olaplex announced a definitive agreement to be acquired by Henkel AG & Co. KGaA in an all-cash deal valued at approximately $1.4 billion. The offer of $2.06 per share represented a premium of more than 50% over the prior day’s close.¹⁸ Olaplex’s board unanimously approved the deal, and Advent International, which held majority voting power, approved it by written consent. Olaplex will continue under its own brand name.¹⁹ Closing is expected in the second half of 2026, pending regulatory approvals.²⁰

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