A federal appeals court panel has shot down an attempt by Elon Musk’s SpaceX to force a sexual harassment lawsuit by eight former employees into private arbitration, The New York Times reported on Wednesday. The judges cited a 2022 law allowing plaintiffs to bypass arbitration agreements in such cases.
The court found that plaintiffs are not required to prove their sexual harassment claims would survive a motion to dismiss to avoid their case being shuffled off into arbitration, which is notoriously employer-friendly. Basically, judges found the claims qualify, which prevents SpaceX from enforcing arbitration clauses in the plaintiffs’ contracts.
“Congress could have easily drafted the EFAA [Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021] to require courts to send sexual harassment disputes to arbitration only when the complaint ‘fails to state a claim upon which relief may be granted’ or ‘fails to state facts which, if true, would constitute sexual harassment,'” U.S. Circuit Judge Michelle Friedland wrote for the three-judge Ninth Circuit panel in the split decision on Tuesday, according to Courthouse News.
Judge Eric Tung, who was appointed by President Donald Trump, dissented on the grounds that the test would allow any claim that “so much as purports to allege” sexual harassment dodge arbitration, but fellow Trump appointee Judge Danielle Forrest sided with Friedland.
