The panel affirmed the district court’s order denying SpaceX’s motion to compel arbitration of plaintiffs’ employment-related claims and held that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (“EFAA”) exempted plaintiffs’ case from arbitration.

SpaceX fired plaintiffs, eight former employees, shortly after they circulated a letter to SpaceX management that voiced concerns about conduct that they asserted to be sexual harassment. Plaintiffs brought retaliatory-termination claims and several other claims under California law related to the conditions of their employment. SpaceX removed the state action to federal court. Once in federal court, SpaceX asserted that all eight plaintiffs had signed arbitration agreements as part of their employment contracts and moved to compel arbitration under the Federal Arbitration Act.

The panel rejected SpaceX’s contention that plaintiffs’ allegations did not satisfy the EFAA’s definition of “sexual harassment dispute” under 9 U.S.C. § 401(4). The panel held that the phrase “conduct that is alleged to constitute sexual harassment” means “conduct that is asserted to amount to sexual harassment.” Because the word “allege” requires only an assertion, which may or may not eventually be proven meritorious, § 401(4)’s plain terms are not limited to conduct that certainly amounts to sexual harassment. Rather, to decide if § 401(4)’s definition is satisfied, courts must determine whether the plaintiff’s complaint describes conduct asserted to be a basis for a sexual harassment claim. Congress did not intend to import the federal pleading standard from Fed. R. Civ. Pro. 8 into § 401(4).

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The panel next addressed whether plaintiffs properly invoked the EFAA in this case. Under § 402(a), a plaintiff may avoid arbitration of a case if the plaintiff is “alleging conduct constituting a sexual harassment dispute” and if the case “relates to . . . the sexual harassment dispute.” The panel concluded that plaintiffs satisfied both conditions.

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First, by alleging that SpaceX retaliated against them for opposing conduct that they assert amounts to sexual harassment (SpaceX founder Elon Musk’s Twitter posts), plaintiffs “alleg[ed] conduct constituting” a “sexual harassment dispute.” Second, and for similar reasons, plaintiffs’ case “relates to” that sexual harassment dispute. Because each plaintiff brought a claim challenging their terminations that were allegedly in response to their accusation about sexual harassment, each plaintiff met the “relates to” bar and thus invoked the EFAA with respect to the entire case.

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Dissenting, Judge Tung would hold that a bare assertion of sexual harassment is not enough to evade arbitration. Courts are to assess whether plaintiffs have pleaded facts that, if proven true, would constitute sexual harassment under applicable law. In the context of the EFAA, to “allege” conduct constituting sexual harassment means to state facts that, if true, amount to sexual harassment under law. Because the district court incorrectly interpreted the EFAA, Judge Tung would have vacated its denial of the motion to compel arbitration and remanded for it to apply the correct standard.

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https://cdn.ca9.uscourts.gov/datastore/opinions/2026/11/10/25-4811.pdf