Lumber Liquidators has agreed to a $36 million settlement to resolve claims brought on behalf of people who bought Chinese-manufactured laminate flooring reported to contain unsafe levels of formaldehyde.
The Virginia-based company said Tuesday that it has signed a memorandum of understanding to settle all claims in two class-action lawsuits filed in the Eastern District of Virginia.
Lumber Liquidators will pay $22 million in cash and provide $14 million in store-credit vouchers to consumers who bought the flooring between January 2009 and May 2015, when it stopped selling the product, the company said in a statement.
The agreement still needs approvals from the court and the company's board.
The company welcomes the agreement as "an important step toward resolving this legacy issue and moving forward," CEO Dennis Knowles said in a statement.
Steven Toll, one of three attorneys appointed by the court to represent the plaintiffs in the multi-district litigation, said the proposed settlement would resolve claims by anyone who purchased the flooring. He said Lumber Liquidators has estimated that more than 700,000 people bought the product, but it is unclear how many of them will file claims under the settlement.
The lawsuits were filed after a March 2015 segment on "60 Minutes" reporting that laminate flooring made in China had illegal levels of formaldehyde. Exposure to high levels can cause respiratory problems and irritation of the eyes, nose and throat. It can also increase a person's risk of developing cancer.
"We think consumers will get a good value by getting cash or store vouchers to buy other products from Lumber Liquidators," Toll said.