In Sakkab v. Luxottica Retail North America, Inc., the Court reversed the district court’s order granting Luxottica Retail North America, Inc.’s motion to compel arbitration of claims and dismissing plaintiff’s first amended complaint, in a putative class action raising class employment-related claims and a non-class representative claim for civil penalties under the Private Attorney General Act (“PAGA”). Luxottica sought to compel arbitration. Plaintiff argued that the portion of the agreement prohibiting him from bringing any PAGA claims on behalf of other employees was unenforceable under California law. After the district court entered judgment in the case, the California Supreme Court announced the rule in Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal. 4th 348 (2014), barring the waiver of representative claims under PAGA. The Ninth Circuit held that the waiver of plaintiff’s representative PAGA claim could not be enforced. The Court held that the Federal Arbitration Act did not preempt the California rule announced in Iskanian. Specifically, the panel held that following the logic of AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), the Iskanian rule is a “generally applicable” contract defense that may be preserved by the FAA’s § 2 savings clause, provided it did not conflict with the FAA’s purposes. The panel further found that the Iskanian rule did not conflict with the FAA’s purposes.

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