A federal appeals court ruled Tuesday that a sexual harassment lawsuit brought by eight former employees of the rocket company SpaceX can proceed in court.
The company had attempted to shift the case to a private arbitration process, arguing that the plaintiffs had signed agreements requiring that move. But the U.S. Court of Appeals for the Ninth Circuit concluded that the case could proceed under a federal law that allows plaintiffs in sexual harassment cases to sue in court even if they’ve signed arbitration agreements.
Tom Moline, one of the former workers, said in a statement, “The Ninth Circuit 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.”
SpaceX did not immediately respond to a request for comment.
The case dates back to a letter the employees wrote and circulated within the company in 2022, in which they urged SpaceX to separate itself from social media comments made by Elon Musk, the company’s founder and chief executive, including one in which he poked fun at sexual harassment accusations against him.
The company fired five employees shortly after, and four more employees over the next few months. In many instances, the company cited the employees’ role in producing and distributing the letter when firing them. A top company official also told several of them that they had wasted large amounts of company time on the letter.
Eight of the nine employees filed charges with the National Labor Relations Board, arguing that the company had violated their federally protected right to engage in collective activity at work. The employees also later filed a lawsuit in California with several accusations from some or all members of the group, including claims that the company had illegally retaliated against them and failed to prevent harassment.
The labor board eventually dismissed the case on jurisdictional grounds, while SpaceX successfully moved the California case to federal court. Once there, the company argued that the employees had signed agreements requiring them to pursue the case before an arbitrator.
But a Federal District Court ruled last year that the case could proceed under the federal law that allows plaintiffs in sexual harassment cases to avoid arbitration. A three-judge panel on the appeals court affirmed that ruling on Tuesday.
SpaceX can now ask the full appeals court to reconsider the case. If it doesn’t, or if the court denies the company’s request, the case will go back before the district court judge.
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