Ninth Circuit Issues First Decision Interpreting the Ending Forced Arbitration Act

Decision Alert: Combs v. Netflix, Inc., 2026 WL 1974172 (9th Cir. July 8, 2026)

Introduction

On July 8, 2026, the Ninth Circuit issued its opinion in Combs v. Netflix, Inc., 2026 WL 1974172 (9th Cir. July 8, 2026), interpreting for the first time the effective date provision of The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFAA”). The Ninth Circuit held that the EFAA did not apply where the “dispute arose and claims accrued before the EFAA’s effective date of March 3, 2022.”

Background on the EFAA

The EFAA narrows the Federal Arbitration Act’s reach by allowing employees asserting sexual harassment or sexual assault claims to proceed in court despite a pre-dispute arbitration agreement. Congress limited the EFAA to any “dispute or claim that arises or accrues on or after” the EFAA’s effective date of March 3, 2022, foreclosing retroactive application.

The Ninth Circuit’s Decision

In Combs, the Plaintiff alleged she was subjected to sexual harassment beginning in 2017, and that her employment was terminated in December 2021 in response to her complaints. After her termination, the Plaintiff filed an administrative complaint with the California Department of Fair Employment and Housing and received a right-to-sue letter in August 2023. The Plaintiff subsequently filed suit in California state court in July 2024.

The Ninth Circuit held that, “by the allegations of the plaintiff’s complaint, the dispute arose and claims accrued before the EFAA’s effective date of March 3, 2022.” The court analyzed “disputes that arise” and “claims that accrue” as distinct concepts, explaining that the use of “or” in the EFAA’s statutory language meant that the EFAA applies if either the relevant dispute arises or the relevant claim accrues on or after March 3, 2022.

To determine when a dispute arises, the Ninth Circuit held that a dispute arises under 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.”

The Ninth Circuit emphasized that “[w]hen a dispute arises for EFAA purposes will be a fact-specific inquiry in every case,” rejecting alternate interpretations of “dispute” on either end of the spectrum. First, the court rejected the Plaintiff’s argument that a dispute does not arise until a formal external complaint is filed, explaining that requiring a formal external complaint “is too narrow and fails to capture the broader, ordinary meaning of the word ‘dispute.’” On the other hand, the court found that a dispute also does not arise “whenever the underlying challenged conduct occurred.” This interpretation would be too broad, according to the Ninth Circuit, rendering the use of both “accrue” and “arise” in the statute superfluous. The Ninth Circuit further noted that under its interpretation of when a dispute arises, a claim will typically accrue before a dispute arises, but “that may not always be the case depending on the rules of accrual for continuing violations, such as hostile work environment claims.”

Applying this framework, the Ninth Circuit concluded that the dispute arose between the parties after the Plaintiff informed her employer of the underlying conduct and the employer “expressly or constructively” opposed that position, which occurred by the Plaintiff’s December 2021 termination, at the latest. 

To determine when a claim accrues, the Ninth Circuit held that a claim accrues when the plaintiff has a “complete and present cause of action,” meaning the right to “file suit and obtain relief.” Applying that rule, the Ninth Circuit concluded that “Combs had a complete and present cause of action before the EFAA’s March 3, 2022 effective date, given that she alleges harassment and a subsequent termination that took place between 2017 and 2021.”

Accordingly, since the Plaintiff’s dispute arose by her termination in December 2021 and her claim accrued during her employment from 2017 to 2021—well before the EFAA’s effective date of March 3, 2022—the Ninth Circuit held that the EFAA did not apply to the Plaintiff’s claims, and the dispute must proceed to arbitration.

Alignment with Other Circuits

The Ninth Circuit’s decision aligns with how other Courts of Appeals have interpreted the effective date provision of the EFAA. In Cornelius v. CVS Pharmacy Inc., 133 F.4th 240 (3d Cir. 2025), the Third Circuit held that the employee’s dispute arose before March 3, 2022 where the underlying conduct started in 2018, the plaintiff raised concerns about her treatment in 2019, and her employment was terminated in November 2021. In Memmer v. United Wholesale Mortgage, LLC, 135 F.4th 398 (6th Cir. 2025), the Sixth Circuit similarly treated “claims that accrue” and “disputes that arise” as distinct concepts and recognized that the timing of a dispute turns on when the parties became adverse to one another. The Sixth Circuit rejected the argument that a dispute arises when a lawsuit is filed. The Memmer plaintiff was employed by the defendant from 2019 to 2021, filed a charge of discrimination with the Equal Employment Opportunity Commission in April 2022, and filed suit in April 2023. Since the plaintiff quit her job in 2021, the Sixth Circuit held that her claim accrued prior to the March 3, 2022 effective date of the EFAA.

Conclusion

The application of the effective date provision of the EFAA is one of several statutory interpretation questions currently working their way through the federal courts. Multiple Courts of Appeals—including the Second Circuit—are currently considering appeals that raise statutory interpretation issues under the EFAA, and further guidance from these courts is expected in the coming months.