Honest Company reaches settlement in derivative litigation cases

The Honest Company Inc. (NASDAQ: HNST) announced it has reached a settlement agreement to resolve multiple derivative litigation cases involving current and former officers and directors.

The settlement covers derivative actions pending in the U.S. District Court for the Central District of California, the U.S. District Court for the District of Delaware, and the Superior Court of California in Los Angeles County. Two stockholders also served pre-suit litigation demands under Delaware law on the company's board of directors.

On March 12, 2026, parties entered into a stipulation of settlement, which was filed in the California Central District Court on March 26, 2026. The court preliminarily approved the settlement on May 1, 2026, with a final approval hearing scheduled for July 13, 2026.

Under the proposed settlement terms, the company agreed to implement corporate governance reforms outlined in the stipulation and will not oppose plaintiff's counsel's request for legal fees not exceeding $1,195,000. In exchange, all derivative claims against the company would be released and the cases dismissed with prejudice.

The company stated it entered the settlement without admission of wrongdoing or liability. The settlement remains subject to final court approval.

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