The U.S. Supreme Court handed down a 5-4 ruling in an important workplace arbitration case, Lamps Plus Inc. v. Varela. The Court held that under the Federal Arbitration Act, classwide arbitration cannot be compelled by a court unless an agreement expressly states the availability of such arbitration; an ambiguous agreement cannot provide the necessary contractual basis for concluding that the parties agreed to submit to class arbitration.

We want to offer comments below on Lamps Plus from Seyfarth Shaw employment litigation partner Richard Alfred, who has been closely following the case.

“This ruling is a big victory for the large number of employers that maintain arbitration agreements with common clauses that simply invoke arbitration as the proper forum for resolving employment disputes without an express statement including class or collective arbitration in that mandate,” Mr. Alfred said.  

He continued: “In such circumstances, there is no longer any question that only individual, not class or collective arbitration may be allowed as a result of today’s Lamps Plus decision.”

Mr. Alfred also noted that:

The Court made clear that a shift from individual to class arbitration is a “fundamental” change to arbitration proceedings envisioned by the Federal Arbitration Act.
Under the FAA, an agreement that is “ambiguous” as to whether the parties agreed to class arbitration, like an agreement that is silent on that issue, cannot be the basis for compelling the parties to class arbitration.Courts may not infer consent to class arbitration absent an express agreement to do so.
Mr. Alfred, who is based in Boston, is the Chair of Seyfarth Shaw LLP’s National Wage & Hour Litigation Practice Group and serves on the firm’s Labor and Employment Department Leadership Team. He has extensive experience defending employment discrimination single, multi-plaintiff, and class actions brought under federal and state statutory laws; pattern or practice claims brought by the EEOC; and employment-related breach of contract and tort claims.  Mr. Alfred represents clients in many different industries, including retail, financial and professional services, specialized and temporary staffing, healthcare, pharmaceutical and life sciences, airline, manufacturing, trucking, home building, and technology companies in complex, multi-district, and class/collective actions in district and appellate courts throughout the country.