Employment Litigation · Primary-source case analysis

Lamps Plus: Contractual Ambiguity Does Not Authorize Class Arbitration

By Aneeta Mishra and Timothy Chan

Published April 18, 2026

Lamps Plus treats the move from individual to class arbitration as a fundamental procedural change that requires actual agreement rather than a state-law ambiguity default.

A data breach produced a putative class claim

A hacker obtained tax information for about 1,300 Lamps Plus employees, and a fraudulent return was filed in employee Frank Varela's name. Varela brought a putative class action. The district court compelled class arbitration despite the employer's request for individual arbitration, and the Ninth Circuit affirmed.

Class arbitration requires affirmative consent

Class arbitration changes confidentiality, formality, cost, speed, and finality. Because arbitration rests on consent, silence is insufficient to authorize class proceedings, and ambiguity does not provide a stronger basis for finding consent than silence.

Contra proferentem could not supply consent

The Ninth Circuit construed ambiguity against the drafter. The Supreme Court held that this public-policy default could not substitute for the parties' actual agreement on a fundamental arbitration attribute and was preempted as applied to impose class arbitration.

Disposition

The Court found appellate jurisdiction because Lamps Plus had not received the individual arbitration it requested. It reversed and remanded, leaving the dispute to proceed without court-compelled class arbitration under the ambiguous clause.

Key takeaways

• Class arbitration requires a contractual basis showing consent.
• Silence and ambiguity are both insufficient.
• Draft class-waiver and forum language expressly.
• State contract rules cannot be used to impose a fundamental arbitration procedure inconsistent with the FAA.