Jose Sierra, an individual , on behalf of himself v. Oakley Sales Corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOSE SIERRA, an individual , on behalf
of himself, and on behalf of all persons
similarly situated,
Plaintiff - Appellant,
v.
OAKLEY SALES CORPORATION,
Defendant - Appellee.
No. 13-55891
D.C. No. 8:13-cv-00319-AG-JPR
MEMORANDUM*
Appeal from the United States District Court
for the Central District of California
Andrew J. Guilford, District Judge, Presiding
Argued and Submitted June 3, 2015
Pasadena, California
Before: M. SMITH and N.R. SMITH, Circuit Judges and LEFKOW,** Senior
District Judge.
Jose Sierra appeals the district court’s Order dismissing his California
Private Attorney General Act (PAGA) claim and granting a Motion to Compel
FILED
FEB 18 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent except as
provided by 9th Cir. R. 36-3.
** The Honorable Joan Lefkow, Senior District Judge for the U.S. District Court for
the Northern District of Illinois, sitting by designation.

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Arbitration. We have jurisdiction pursuant to 28 U.S.C. § 1291. We reverse and
remand to the district court for further proceedings.
The central issue in this appeal turns on whether the Federal Arbitration Act
(FAA) preempts the California rule that “an employee’s right to bring a PAGA
action is unwaivable.” Iskanian v. CLS Transp. L.A., LLC, 327 P.3d 129, 148 (Cal.
2014). Our recent decision in Sakkab v. Luxottica Retail North America, Inc. held
that “the FAA does not preempt the Iskanian rule.” 803 F.3d 425, 429 (9th Cir.
2015). Therefore, the Iskanian rule applies to the arbitration agreement between
Sierra and Oakley Sales Corporation and Sierra’s waiver of his right to bring a
representative PAGA action is unenforceable.
Oakley’s contention that the FAA requires enforcement of Sierra’s waiver in
the arbitration agreement is foreclosed in light of our decision in Sakkab.
Although courts must generally enforce arbitration agreements according to their
terms, Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S.
468, 478 (1989), the FAA permits arbitration agreements to be declared
unenforceable “upon such grounds as exist at law or in equity for the revocation of
any contract,” 9 U.S.C. § 2. “[T]he Iskanian rule is a ‘generally applicable’
contract defense that may be preserved by § 2’s saving clause, provided it does not
conflict with the FAA’s purposes.” Sakkab, 803 F.3d at 433. The Iskanian rule
“does not conflict” with the objectives of the FAA and is not preempted. Id.

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An arbitration agreement is not per se unconscionable, and, in this
arbitration agreement, the offending clause waiving representative claims appears
to be severable from the rest of the agreement. The agreement provides:
If any provision . . . of the Dispute Resolution Agreement
is held illegal, invalid or unenforceable in any respect,
Oakley and the Employee agree that such provision . . .
shall be deemed to be modified only as necessary to permit
its enforcement to the maximum extent permitted by
applicable law (except that Oakley does not agree under
any circumstances to a modification of the Dispute
Resolution Agreement to permit a class or collective action
to be adjudicated in the arbitration forum in any case
brought as a class or collective action.) In this event, the
remainder of the Dispute Resolution Agreement shall not
be affected thereby.
Accordingly, we reverse the district court’s order dismissing Sierra’s First
Amended Complaint and remand to the district court to decide where Sierra’s
representative PAGA claims should be resolved.1 See id. at 440 (remanding to the
district court to determine whether representative PAGA claims should be
arbitrated or litigated).
REVERSED and REMANDED.
1 We note that the arbitration agreement states that “Oakley expressly does not
agree to arbitrate any claim on a class or collective basis.” Nonetheless, it is not
forbidden from doing so.

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