SpaceX loses appeal to push harassment lawsuit into arbitration

SpaceX had argued the workers' claims were too weak to qualify. The court disagreed. Judge Michelle Friedland wrote that Congress could easily have told courts to send harassment disputes to arbitration when a complaint fails to state a claim, but it did not. Plaintiffs do not have to show their claims would survive a motion to dismiss. Judge Danielle Forrest sided with her. Judge Eric Tung dissented, warning that the test lets any claim that "so much as purports to allege" harassment avoid arbitration. Both Forrest and Tung were appointed by President Donald Trump.

What is the SpaceX lawsuit about?

SpaceX fired nine employees who helped write and circulate a 2022 letter protesting Elon Musk's social media posts. The letter objected to sexual jokes, insults and his political views, as well as a post mocking allegations that he inappropriately touched a flight attendant and propositioned her for sex. Musk denies that happened.

According to the New York Times, SpaceX told many of the workers the letter played a part in the firings, and a senior official told several that it wasted a lot of company time. Eight of the nine are the plaintiffs.

Plaintiff Tom Moline said the court "correctly recognized SpaceX's claims for what they are: an attempt to hide and distract from the toxic culture of sexual harassment and retaliation that persists to this day."

What happens next?

SpaceX previously got the original complaints dismissed by the National Labor Relations Board on jurisdictional grounds. It also moved the case from California courts to federal court. It lost the arbitration fight at district court level in 2025. SpaceX has not said whether it will accept this ruling or ask the full appeals court to rehear it.