Lawsuit Claims SpaceX Systematically Pays Female, Minority Employees Less Than Male, White Employees

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SpaceX faces a proposed representative complaint that alleges the Elon Musk-owned spacecraft company has discriminated against female and minority employees by systematically paying them less than their male and white counterparts.

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The 16-page lawsuit was filed by a female former SpaceX engineer who, upon being hired in September 2022, was offered an annual salary of $92,000 with no room for negotiation. According to the case, male employees who held the same title and had similar or less experience were paid up to $115,000 per year.

After California’s new pay transparency law forced defendant Space Exploration Technologies Corp to post a salary range on all job openings and provide employees commensurate raises, the plaintiff learned that the salary band for her rank as an “engineer 1” was $95,000 to $115,000, the complaint says. The filing says that although the plaintiff subsequently received a $2,000 raise, she remained “the lowest paid engineer on her team” of all men and, after voicing her concerns to her manager, was told to “be grateful,” and to not make any more complaints.

The lawsuit claims SpaceX has run afoul of the California Equal Pay Act, a section of the state’s Labor Code that prohibits employers from paying different genders and races disparately for “substantially similar work.” The suit brought by the plaintiff is a Private Attorneys General Act (PAGA) representative complaint, a type of legal proceeding that makes it easier for aggrieved employees to file lawsuits over alleged California Labor Code violations since they are not required to satisfy class action requirements.

Per the case, SpaceX lacks any legitimate justification for its allegedly discriminatory pay practices as far as the Equal Pay Act is concerned, given that female and minority employees in all positions and levels of employment are compensated less than male and white employees with “substantially similar” job positions, duties, education, training or experience.

As the case tells it, the defendant has created a “scheme” to appear as if it maintains a “facially neutral pay structure” whereby female and minority employees are forced to perform the same duties as engineers under a different title that receives lower compensation.

The complaint alleges that SpaceX “routinely” starts female and minority employees as technical writers—a lower rank in the company’s organizational structure that requires employees to perform “similar or substantially similar” job duties as engineers but provides significantly lower pay. Although female and minority workers are considered for a promotion to “engineer 1” after several years of work as technical writers, male and white employees are hired directly as engineers and receive correspondingly higher salaries for the same work, the filing contends.

In addition, the complaint argues that SpaceX promotes men and white employees to higher, better-compensated positions more frequently than female and minority employees with similar qualifications. If a female or minority employee is promoted, the case says, SpaceX routinely starts their salary at the lowest tier of the salary band for that position.

Although SpaceX was forced to raise female and minority employees’ salaries after the pay transparency law required the company to reveal its pay scales, the defendant’s alleged scheme to pay female and minority employees less than equally qualified white or male candidates by starting them as technical writers has remained in place, the case claims.

“As a result, the ranges of compensation provided to employees within the same position or between substantially similar positions are highly variable and dependent on which position they started in,” the suit shares. “This is akin to paying female and minority employees based on prior pay histories and is deeply skewed against women and minorities.”

The lawsuit looks to represent any women and minority individuals employed as engineers by SpaceX in California at any time since September 23, 2020.

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