I have an array item with a French accent ([WIPDescription] => Recette Soupe à lOignon Sans Boeuf US). The data is being properly pulled from the database (mysql).
If you deal with diacritics you can also add JSON_PARTIAL_OUTPUT_ON_ERROR and it will remove only the problems and leave the rest intact. I used utf_encode before I found this but it was messing up diacritics.
echo json_encode($data, JSON_PRETTY_PRINT | JSON_UNESCAPED_UNICODE | JSON_UNESCAPED_SLASHES | JSON_PARTIAL_OUTPUT_ON_ERROR);