Ashley Milano  |  April 4, 2016

Category: Labor & Employment

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Lamps Plus employee class action lawsuitLamps Plus is facing a proposed class action lawsuit over allegations that the company failed to provide adequate security measures to prevent a recent massive data hack into the company’s payroll system, putting more than 1,300 employees’ sensitive information at risk.

Lead plaintiff Frank Varela, an employee at the lighting retailer’s Redlands, Calif. location claims he was tipped off to the data breach when the IRS informed him there was a fraudulent 2015 income tax filing using his name. Varela had yet to file his tax returns which led him to believe he was a victim of identity theft.

On Feb. 11, a phishing attack allegedly compromised the 2015 W-2 data for Lamps Plus company employees. The data hack occurred as a email spoof appearing as an internal communication, with the hacker gaining access to its networks by simply posing as a Lamps Plus employee. Lamps Plus discovered the data breach during an internal audit, as employees began reporting that tax returns had already been filed under their name.

Varela purports that Lamps Plus should have known to have safeguards in place to maintain and secure their employees’ “Personally Identifiable Information” or PPI, claiming the company cut corners on security measures that could have prevented or mitigated the data breach.

“What makes this recent breach so ironic is that defendants released their employees’ [personally identifiable information] to a third-party criminal without good cause or reasonable diligence,” the lawsuit alleges. “Defendants’ approach to maintaining the privacy of plaintiff’s and class members’ [personally identifiable information] was lackadaisical, cavalier and reckless.”

The notice of the data breach was sent to Lamps Plus employees via a company memo, stating that an unauthorized individual may have obtained copies of workers’ W-2 income and tax withholding statements (that included addresses, social security numbers, and other personal information) that may have been “intentionally misappropriated by the criminal for use in a scheme, sometimes called a tax-related identity theft and refund fraud.”

Lamps Plus indicated that as a result of the data breach, they would be offering identity monitoring services to the affected employees at no cost for one year.

Varela filed the proposed class action alleging negligence, breach of implied contract, violations of California’s consumer records and unfair competition laws, invasion of privacy, and negligent violation of the Fair Credit Reporting Act.

He is seeking to represent thousands of Lamps Plus employees who have suffered and continue to suffer damages, including pecuniary losses and emotional distress over Lamps Plus alleged reckless conduct that contributed to the massive data breach.

The proposed Class has requested a mandatory injunction that Lamps Plus implement improved security measures and procedure that will adequately safeguard the PPI of employees.

Varela is represented by Richard D. McCune, David C. Wright and Michele M. Vercoski ofMcCuneWright LLP and John A. Yanchunis, Marcio W. Valladares and Patrick A. Barthle II ofMorgan & Morgan Complex Litigation Group.

The Lamps Plus Employee Data Breach Class Action Lawsuit is Frank Varela, et al. v. Lamps Plus Inc., et al., Case No. 5:16-cv-00577, in the U.S. District Court for the Central District of California, Eastern Division – Riverside.

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