Ninth Circuit rejects SpaceX bid to arbitrate worker case

The Ninth Circuit has affirmed a trial judge's refusal to send eight former SpaceX employees' lawsuit into arbitration. A 2021 federal statute keeps the case in court.

The appeals court leaves the claims in federal court. Judge Michelle T. Friedland writes the opinion, with Judge Danielle J. Forrest joining. The panel upholds an order from Judge John A. Kronstadt in the Central District of California. Case No. 25-4811 carries a filing date of November 10, 2026, after argument in Pasadena on June 25.

SpaceX fires the eight after they send a letter. Paige Holland-Thielen, Yaman Abdulhak, Scott Beck, Rebekah Clark, Deborah Lawrence, Claire Mallon, Andre Nadeau, and Tom Moline raise concerns about conduct they describe as sexual harassment. They sue over the firings and over other job conditions under California law. SpaceX removes the state case and says each person signed an arbitration agreement with the job.

The panel treats an assertion as enough to stay in court. SpaceX argues the complaint has to plead harassment well enough to survive a motion to dismiss. The judges read the statute to cover conduct a plaintiff asserts amounts to sexual harassment, even if that assertion later fails. They find that Congress does not place the federal pleading standard inside that definition.

The asserted conduct is posts by Elon Musk. The complaint describes firings that followed objections to posts on Twitter that the workers call sexual harassment. Each firing claim relates to that dispute, so the exemption covers the entire case. Musk is a defendant in the district case, not the appellant.

Judge Eric C. Tung dissents. He writes that a bare assertion is not enough to avoid arbitration. In his view, a court must ask whether the pleaded facts, if proven, would be sexual harassment under the governing law. He would wipe out the denial and send the request back to the trial judge.

The ruling decides the forum, not the firings. The panel does not find that harassment occurred, and it does not decide whether the terminations were unlawful. Only Claire Mallon asserts harassment by coworkers, and the judges leave SpaceX's timing objection to that claim for a later stage. The case remains before the district court under docket 2:24-cv-06972.