A federal appeals court has ruled that SpaceX must face a lawsuit brought by eight engineers who say they were fired after raising concerns about sexual harassment and discrimination at the rocket company, rejecting the company's bid to force the dispute into private arbitration. The engineers filed the lawsuit in 2024, and SpaceX has denied the allegations at the heart of it.
The 9th U.S. Circuit Court of Appeals upheld a federal judge's earlier ruling finding the engineers' claims are exempt from their SpaceX arbitration agreements, according to Reuters, whose report was authored by Blake Brittain, reporting from Washington. A separate account from Bloomberg Law describes the panel as divided, finding that the workers' allegations meet the threshold needed to invoke the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act — a law that, per Reuters, allows individuals to pursue sexual-harassment lawsuits in court regardless of any arbitration agreement they may have signed.
The appeals court rejected SpaceX's argument that the claims fell outside that federal law's protections, according to Reuters. Bloomberg Law's reporting adds that the ruling lays out the pleading standard workers must meet to keep harassment-related claims out of arbitration, a standard that pulled the engineers' entire case into open court rather than a private arbitration forum.
What the Engineers Allege
According to the lawsuit, Elon Musk ordered the engineers' firing after they circulated a letter calling him a distraction and an embarrassment and urging SpaceX executives to disavow his sexually charged social-media comments, per Reuters' reporting. The suit further alleges that Musk's conduct fostered a pervasively sexist culture at the company and that female engineers at SpaceX were subjected to routine harassment and sexist comments. These remain allegations made in the lawsuit; the appeals court's ruling on arbitration does not determine whether they are true.
Laurie Burgess, an attorney representing the workers, said the engineers were delighted with the decision, Reuters reported. SpaceX did not immediately respond to a request for comment on the ruling, according to the same report.
A Separate Labor Board Fight Over the Same Letter
The firing of the eight engineers has also been the subject of a separate proceeding before the National Labor Relations Board tied to their open letter. That case was dismissed, with the board stating it lacked jurisdiction over SpaceX after the National Mediation Board concluded the company belonged under its jurisdiction instead, according to the Los Angeles Times. That dismissal addressed only the labor board's jurisdiction over the open-letter firings and is a distinct legal track from the harassment lawsuit now headed back toward court.
How the Law Has Played Out Elsewhere
The ruling fits into a broader pattern of 9th Circuit decisions interpreting the 2022 federal law. In a separate case, the court held that the act can apply even to covered sex-based harassment claims that surface during an arbitration proceeding already underway, according to HR Dive. That same ruling noted plaintiffs can still waive their rights under the law through ordinary waiver principles, such as intentionally delaying a covered claim or choosing to pursue it in arbitration themselves.
Other courts have wrestled with similar questions. The 8th Circuit ruled in 2024 that the law's protections hinge on when a sexual-assault claim is filed rather than when the underlying conduct occurred, per the same HR Dive report. And in a separate California federal case, a district court denied SpaceX's own motion to compel arbitration of a female employee's sexual-harassment, gender-discrimination and retaliation claims, finding the same law applied, according to Bloomberg Law.
Congress passed the underlying statute, titled the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, according to its official text on Congress.gov. With the 9th Circuit's latest decision, the engineers' claims against SpaceX may now continue in open court rather than behind closed-door arbitration.
