The Ninth Circuit Court of Appeals heard arguments Wednesday in a case that could determine whether a former Netflix employee's sexual harassment claims must be resolved through private arbitration or can proceed in federal court. Jessica Combs, who worked for the streaming giant from 2017 until her termination in 2021, is challenging a lower court's decision that ordered her claims into arbitration.
Combs accused Netflix of maintaining a sexually hostile work environment that subjected her and other female employees to harassment. In her complaint, she described what she characterized as "a sexually charged workplace that was not only patently offensive and harmful, but almost impossible to comprehend." Among her specific allegations, Combs pointed to what she called the "stairs of shame" - a staircase allegedly designed in a way that allowed male coworkers to look up the skirts and dresses of women as they climbed the stairs.
The central legal question before the three-judge panel is timing: when exactly did Combs' claims against Netflix arise? This determination is crucial because it affects whether the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 applies to her case. The federal law, which took effect March 3, 2022, invalidates predispute arbitration agreements for sexual harassment or sexual assault claims that arise on or after that date.
Combs' employment agreement with Netflix contained an arbitration clause requiring that employment disputes be resolved through private arbitration rather than in court. The district court granted Netflix's motion to compel arbitration, finding that Combs' claims were subject to the arbitration requirement.
However, Combs' attorney, Mike Clark, argued that her dispute with Netflix didn't crystallize until Aug. 3, 2022, when she received a right-to-sue letter after filing a complaint with California's Department of Fair Employment and Housing's Civil Rights Department. This timing would place her claims squarely within the protection of the 2021 federal law.
Clark told the appeals court that a legal dispute arises only once the party against whom the complaint is made responds to the allegations. He argued that Netflix's silence in response to Combs' internal complaints in 2018 did not constitute a dispute because it didn't provide notice that the company was contesting her claims.
"I think by its very nature, the court should hold defendant's feet to the fire, so to speak," Clark said, arguing that Netflix should have been required to formally respond to Combs' allegations for a dispute to arise.
U.S. Circuit Judge Susan Graber, a Clinton appointee, questioned this interpretation during oral arguments. She noted that Netflix never responded to Combs' complaints and asked whether silence itself could constitute a form of response. "If someone complains vociferously about their situation and they get no response, isn't that a form of response, where silence doesn't equal consent but maybe is willful disagreement or ignoring the complaint?" Judge Graber asked.
The timeline of events adds complexity to the case. Combs first complained internally about sexual harassment in 2018, well before the 2021 federal law took effect. However, she didn't file formal legal complaints until after her termination. Netflix fired Combs in 2021, citing her refusal to comply with the company's COVID-19 vaccine requirement while working remotely. Combs has argued that this stated reason was pretextual.
According to Clark, Combs didn't file any formal complaints before her termination, though she did raise concerns with her supervisors. He argued that Netflix gave no indication when it fired her that it was denying her harassment allegations, which supports the position that no legal dispute had yet arisen.
The case highlights the ongoing tension between employers' preference for private arbitration to resolve workplace disputes and employees' desire for access to federal courts, particularly in sexual harassment cases. The 2021 federal law was designed to give victims of sexual harassment and assault greater access to the court system by preventing companies from forcing such claims into arbitration.
The Ninth Circuit's decision could have implications beyond this individual case, potentially affecting how courts determine when employment disputes arise and whether similar claims can avoid arbitration under the 2021 law. The court has not indicated when it will issue its ruling.
For Combs, the outcome will determine whether her allegations against one of the world's largest streaming companies will be heard in a public forum or resolved through private arbitration proceedings. The case underscores the continuing legal battles over workplace harassment and the mechanisms available for addressing such claims.