Lamps Plus employee, Varela, sued the company after the disclosure of the private tax information of more than 1,000 company employees. Because of an arbitration clause in his employment agreement, the company moved to send the case to arbitration. The district court sent the case to arbitration, but for the issues to be arbitrated classwide rather than individually. The United States Court of Appeals, Ninth Circuit affirmed that ruling. The United States Supreme Court found that class arbitration is significantly different than individual arbitration.
As society becomes increasingly litigious, and as plaintiff attorneys market their services more aggressively, class action litigation is posing a rapidly growing threat to businesses in all sectors.