Thursday, July 9, 2026
Page 3
Ninth Circuit:
Dispute ‘Arises’ When Employer Opposes Worker’s Grievance
Opinion Says Ex-Employee Accusing Netflix Inc. of Sexual Harassment Must Arbitrate Claims Because Opposition Began as Early as 2019, Before Enactment of Prospective-Only Carve-Out to Enforcement of Arbitration Clauses
By Kiimber Cooley, associate editor
The Ninth U.S. Circuit Court of Appeals held yesterday, in a case of first impression, that a sexual harassment dispute arises, for purposes of a 2022 prospective-only federal law carving out such claims from arbitration, when an employee lodges a complaint over the challenged conduct and the employer expressly or constructively opposes that position.
At issue is the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFAA”), found at 9 U.S.C. §401 et seq., which allows plaintiffs alleging sexual assault or harassment to proceed in court, notwithstanding any arbitration agreement between the parties. Congress specified in a legislative note that the law applies to “any dispute or claim that arises or accrues on or after” March 3, 2022, the date of the statute’s enactment.
Circuit Judge Daniel Aaron Bress authored the opinion, joined in by Circuit Judge Anthony D. Johnstone and Senior Circuit Judge Susan P. Graber. Borrowing from “settled understanding” of the phrase, Bress declared that a “claim accrues” within the meaning of EFAA when the plaintiff has a complete cause of action such that she has the right to file suit.
Saying that “[t]he more difficult question is what it means for a ‘dispute’ to ‘arise,’ ” the jurist agreed with other courts’ interpretation of the terms and wrote:
“[A] dispute arises for purposes of the EFAA ‘when an employee registers disagreement—through either an internal complaint, external complaint, or otherwise—with his or her employer, and the employer expressly or constructively opposes that position.’ ”
Harassment Claims
The question arose after Jessica Combs filed a complaint against her former employer, Netflix Inc., in Los Angeles Superior Court on July 29, 2024, asserting causes of action including harassment, discrimination, hostile work environment, and wrongful termination under California law. Combs alleged that she worked for the company between 2017 and December 2021, when she was fired purportedly for refusing to comply with the company’s COVID-19 vaccination policy. She claimed that she was actually terminated “in retaliation for submitting complaints regarding the sexually charged atmosphere in the workplace.”
In the complaint, she asserted that the streaming giant “promoted quite a flirtatious office environment” and “encouraged” employees to have one-on-one meetings with sensual undertones.
She also cited a September 2018 off-site meeting where she was allegedly required to participate in team-building activities that she described as “forced speed dating games,” saying she was instructed to stare into the eyes of other workers and compliment their physical appearances. Combs alleged that she repeatedly complained to the company but that her grievances were ignored.
Netflix, a citizen of Delaware and California, removed the case to federal court based on diversity of citizenship, noting that she had relocated to Tennessee in 2020, and moved to compel arbitration, citing a clause in her employment agreement.
District Court Judge Monica Ramirez Almadani of the Central District of California granted the motion in April 2025, ruling that her claims accrued and the dispute arose before the EFAA was enacted. Combs did not dispute the validity of the arbitration clause.
Binding Law
Pointing out that the statutory note providing that the EFAA is prospective-only “is congressionally enacted” and “binding law,” Bress said:
“The key question presented in this appeal is how to interpret and apply this timing provision. In resolving this question, we interpret the statutory text based on its plain language, as considered in context.”
Reasoning that the “parallelism” in the phrases “dispute or claim” and “arises or accrues” indicates a legislative intent to refer to two separate concepts, he opined that “the EFAA would apply either to ‘claims that accrue’ or ‘disputes that arise’ on or after March 3, 2022.”
Addressing the latter category, he remarked that “we reject two…extreme interpretations of ‘dispute’ that would raise or lower the bar for finding that a dispute has arisen,” disagreeing with Combs that the threshold is only crossed when a formal complaint is filed with a court or state agency and also declining to adopt “an interpretation that looks only to underlying conduct.”
Aspect of Opposition
He said:
“[A] ‘dispute’ requires ‘some aspect of opposition or disagreement’ between the parties….Although this formulation means that a ‘claim’ will typically ‘accrue’ before a ‘dispute’ arises, that may not always be the case depending on the rules of accrual for continuing violations, such as hostile work environment claims….[W]hen claims accrue and disputes arise under the EFAA will turn on the facts presented in each case.”
Turning to the allegations in Combs’ complaint, Bress commented:
“When Combs repeatedly complained to Netflix about the sexualized company culture and the inappropriate actions of her co-workers, and when Netflix then allegedly failed to take any corrective action, there was plainly ‘some aspect of opposition or disagreement’ between the parties….When an employee complains to her employer about the actions of co-employees, a dispute arises once the employer responds negatively, or constructively so, to the employee’s complaints. And certainly, a dispute had arisen by December 2021, given that Netflix allegedly opposed Combs’s complaints to such an extent that it fired her for raising those complaints.”
He added:
“We recognize…’that it may not always be easy to tell when an employee first registers disagreement with his or her employer or when an employer disagrees with a position of an employee.’…If Combs had not made internal complaints to Netflix, the situation would be different….But considering the entirety of Combs’s alleged interactions with Netflix, we have little difficulty concluding that their dispute arose before March 3, 2022. Combs’s claims must therefore proceed to arbitration.”
The case is Combs v. Netflix, 25-3164.
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