Arbitration
Ninth Circuit Clarifies When a Dispute “Arises” Under the EFAA
Updated
In Combs v. Netflix, Inc., the Ninth Circuit addressed, as a matter of first impression, how to apply the timing provision of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA). The court held that the plaintiff’s dispute with her employer arose before the EFAA’s March 3, 2022 effective date, so the statute did not apply and her claims had to go to arbitration. The court affirmed the district court’s order compelling arbitration.
Background
Jessica Combs accepted a job at Netflix in May 2017 under an employment agreement containing an arbitration clause covering all employment-related disputes. She alleges that she was subjected to a sexualized work environment and sexual harassment, and that Netflix refused to address her complaints.
According to her complaint, Combs repeatedly complained to supervisors and management between 2017 and 2021 about the company’s sexually charged environment and specific instances of harassment, only to be ignored. In December 2021, Netflix fired her—a termination Combs alleges was retaliation for those complaints.
Combs filed an administrative complaint in August 2023 and sued in California state court in July 2024, raising state-law discrimination, harassment, and hostile-work-environment claims. Netflix removed the case to the Central District of California and moved to compel arbitration, which the district court granted.
What the Court Held on the EFAA’s Timing Provision
The EFAA lets plaintiffs alleging sexual harassment or sexual assault proceed in court despite an arbitration agreement, but it applies only to “any dispute or claim that arises or accrues on or after” March 3, 2022. Reviewing the order de novo, the court agreed that Combs’s allegations sounded in sexual harassment and thus presumptively fell within the EFAA, so the case turned on timing.
Reading the parallel phrasing of “dispute or claim” and “arises or accrues,” the court treated these as two distinct concepts. A claim “accrues” when the plaintiff has a complete and present cause of action; a dispute “arises” when an employee registers disagreement—through an internal complaint, external complaint, or otherwise—and the employer expressly or constructively opposes that position.
The court rejected both the plaintiff’s narrow reading, which would require a formal external complaint, and an occurrence-based reading tying the dispute to the underlying conduct. Aligning with the Third, Sixth, and Eighth Circuits, it held that a dispute arose between Combs and Netflix by December 2021 at the latest, given her repeated internal complaints, Netflix’s alleged inaction, and her termination.
Under the EFAA, a dispute “arises” when an employee registers disagreement with the employer and the employer expressly or constructively opposes that position. Because Combs’s dispute arose before March 3, 2022, the EFAA did not apply and her claims proceed to arbitration.
What This Means for You
This decision sets the Ninth Circuit’s test for when a dispute “arises” under the EFAA’s timing provision, distinguishing that inquiry from when a claim “accrues.” It applies to sexual harassment and sexual assault cases where the parties dispute whether events fall before or after the statute’s March 3, 2022 effective date.
I write these summaries as general information about developments in California employment law. They are not legal advice and don’t create a mediator–client relationship. For guidance on a specific matter, consult a qualified attorney.