Lamps Plus, Inc.vs.Varela: Case Analysis

In the case Lamp, Inc. v. Varela, the petitioner, Frank Varela, sued Lamps Plus after disclosing 1,300 employees tax information after a phishing attack. Frank filed a class action complaint for negligence against his employer, breach of contract, and invasion of privacy after Lamps Plus released employee personal identifying information after a phishing attack. Mr. Varela was miffed after fraudulent income tax returns were filed in his name. Lamps Plus strategy in the legal suit was to compel the arbitration on an individual basis relying on the arbitration provision. The district court denied the request for individual arbitration and instead authorized a class arbitration that was affirmed in the Ninth Circuit. Lamps Plus petitioned this decision to the supreme court, Lamps Plus, Inc., et al. v. Varela, No. 17-988 (S.Ct. 4/24/19) (587 U. S., 2019). Franks employment contract had an arbitration agreement as a requirement for his employment. After filling the suit against Lamps Plus, the defendant relied on this agreement as the foundation of a motion to compel bilateral arbitration.

The district court found the agreement to be a one of adhesion and ambiguous in whether...

Consequently, it allowed the arbitration to proceed on a class-wide basis. After the appeal to the Ninth Circuit arguing that Lamps Plus had not agreed to class arbitration, the court affirmed and ruled that class arbitration could proceed (Lamps Plus Inc. v. Varela, 2018). Under California law, it is to understand the ambiguity against the plaintiff when it is a contract of adhesion. The...…through a court of law (Alexander, 2016). Consequently, this might lower ethical compliance in the business environment due to ambiguity in interpreting arbitration laws across states.

The compensation of Mr. Varela would be lower and in terms that would most likely favor the employer compared to the compensation he would have got through the court. However, this approach compromises the ethical perception of Lamps Plus among employees and might limit talented employees from seeking employment with the company (Alexander, 2016). As Flagstar bank we are headquartered in Michigan, the use of arbitration clauses might be effective since the state arbitration laws are not similar to those of California but offering admissible contracts in such cases is essential to prevent the emergence of civil suits by the employees. Ensuring optimum cyber security is also critical to…