A split three-judge Ninth Circuit panel rejected SpaceX’s latest effort to move a sexual-harassment lawsuit brought by eight former employees into private arbitration. The judges ruled that the employees do not have to prove their claims would survive a motion to dismiss to rely on the 2021 Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. Because their complaint alleges sexual harassment, the company cannot enforce contract clauses requiring arbitration. Judge Michelle Friedland wrote that Congress could have made the law’s protection depend on whether a complaint states a legally sufficient claim, but did not. Judge Eric Tung dissented, arguing the ruling lets any complaint that merely alleges harassment avoid arbitration; Judge Danielle Forrest joined the majority.
The case stems from SpaceX’s termination of nine employees involved in a 2022 open letter criticizing Elon Musk’s social-media posts, including sexual jokes and his response to allegations involving a flight attendant. SpaceX reportedly told some employees the letter contributed to their firings; eight are suing. The company previously obtained dismissals at the National Labor Relations Board on jurisdictional grounds and moved the dispute from California courts to federal court, where it invoked arbitration agreements. A district court rejected that effort in 2025, and the appeals ruling leaves the lawsuit in court for now. SpaceX has not said whether it will seek review by the full appeals court.
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