Top Appellate Reversals: Sakkab v. Luxxotica Retail North America

Employment

9th U.S. Circuit Court of Appeals

Justices Milan D. Smith, N. Randy Smith, Senior U.S. District Judge Joan Humphrey Lefkow (sitting by designation)

Plaintiffs' attorneys: Blumenthal, Nordrehaug, and Bhowmik, Kyle R. Nordrehaug, Norman B. Blumenthal, Aparajit Bhowmik

Defense attorneys: Littler Mendelson PC, Keith A. Jacoby, Andrew Pincus

In persuading a federal appellate panel to reverse a lower court's upholding of an employment contract to individually arbitrate claims, plaintiff's lawyer Kyle R. Nordrehaug won a key ruling that workers cannot waive their right to bring representative claims under the state's Private Attorney General Act.

Judge Milan D. Smith of the 9th U.S. Circuit Court of Appeals authored a majority decision in September that marked the federal court's first endorsement of a labor-friendly state high court case, Iskanian v. CLS Transportation LLC, 59 Cal. 348 (2014).

That ruling held employees may bring representative lawsuits under PAGA, even if a worker signed a contract stating he or she would individually arbitrate all grievances.

Iskanian is known for creating a PAGA exception to the enforceability of pre-dispute arbitration clauses.

However, Smith's majority opinion argued Iskanian is not about arbitration, but whether an employer and employee can contractually agree for the worker to waive their right to bring a claim, with the adjudicator of that claim - be it a judge, arbitrator or someone else - a matter left for the parties to decide.

The decision immediately altered the state's employmemnt law landscape, affecting dozens of district court cases that include a PAGA claim and accompanying defense motion to compel individual arbitration.

That includes the dispute at hand in which Nordrehaug - a lawyer at Blumenthal, Nordrehaug & Bhowmik - represented plaintiff Shukri Sakkab, who alleged various labor code violations against Lenscrafters and parent company Luxxotica Retail North America Inc. Sakkab v. Luxxotica Retail North America, 2015 DJDAR 10850.

Luxxotica retail attorney Keith A. Jacoby of Littler Mendelson PC has sought 9th Circuit en banc review, arguing the majority opinion contradicts the 2011 U.S. Supreme Court case, AT&T Mobility v. Concepcion,which held the Federal Arbitration Act pre-empts state attempts to mitigate arbitration clauses' enforceability.

Nordrehaug counters, "The U.S. Supreme Court has held multiple times over the last 30 years that arbitration agreements cannot waive claims. Rather, arbitration agreements simply move the forum from court to arbitration."

Nordrehaug said a 9th Circuit decision on Luxxotica's petition is imminent. Messages left with Jacoby were not returned.

- Matthew Blake