The lead plaintiff in a federal class action lawsuit filed on Jan. 26 against Ulta Beauty, a cosmetics company, is a California resident. The lawsuit alleges that the company repackaged returned cosmetics and sold them to customers as though they were new.
On Jan. 9, a former employee of the company made the allegations about the company’s practices on Twitter. The lawsuit says that dozens of other employees nationwide then said similar practices occurred at stores where they worked. One ex-manager described being rebuked in conference calls if the store went over a weekly quota in damaged merchandise. The former manager also described foundation and mascara as particularly likely to be put back because it was difficult to tell if those cosmetics were used. Another former employee claimed to have worked at three different stores that followed the same practices.
The company’s headquarters are in Chicago, where the lawsuit was filed. The lead plaintiff seeks to represent a class of people who made purchases at California Ulta stores or everyone who made purchases from all stores. The suit seeks attorneys’ fees, restitution and damages for violating California’s Unfair Competition Law and claims of unjust enrichment.
A company that is facing a lawsuit dealing with deceptive trade practices or business fraud may want legal assistance. There may be multiple consequences for a company facing this type of lawsuit. First, there may be legal and financial implications. However, the company might also be damaged by the lawsuit’s allegations. Management might seek to mitigate the harm by having an attorney negotiate a confidential settlement if the evidence against the company is strong.