Sixteen retailers and manufacturers, including Saks and Target, agreed on Sept. 2 to a settlement that requires them to strictly limit the amount of cadmium they use in both children’s and adult’s jewelry.

The agreement calls for jewelry sold by the companies to contain no more than 0.03 percent (300 parts per million) of cadmium by Dec. 31, 2011.

The agreement is in response to a lawsuit launched by the Oakland, Calif.-based Center for Environmental Health in February 2010. The suit charged the retailers with violating California’s Proposition 65, which requires companies to warn consumers when their products expose them to potentially harmful chemicals.

The settling companies also agreed to a total payment of $1.03 million, which includes payments to the State of California’s Office of Environmental Health Hazard Assessment, funds for testing jewelry for compliance to the agreement, funds for CEH’s ongoing work, and payments to help defer CEH’s legal expenses.

Charles Margulis, CEH communications director, told JCK the settlement will have “nationwide impact,” as the retailers have agreed to stop using cadmium nationwide.

Eileen M. Nottoli, counsel for Allen Matkins, a San Francisco firm which represented half the companies, said the agreement was “far-reaching,” and noted the companies have agreed to a tougher standard than the industry’s preferred “exposure-based” standard.

Companies agreeing to the settlement include Rainbow/5-7-9 Stores (AIJJ Enterprises/Rainbow Apparel); Aeropostale; American Eagle Outfitters; Catherines Inc/Lane Bryant; Charlotte Russe; Claire’s; Cost Plus; Fiesta Jewelry; Finesse Novelty; Forever 21; Group USA; Haskell Jewels; Hot Topic; MJM Jewelry; Old Navy/Banana Republic/The Gap; Rodgers Sports Management; Saks Inc.; Shalom Int’l; Tanya Creations; Target; The Buckle; and The Wet Seal.

JCK