For SpaceX, Rapid Growth Brings Many Challenges


 Editorial | Growing Pains 

The latest employee lawsuit against rocket maker SpaceX makes clear that the emerging entrepreneurial space industry is not immune to the labor pains that the more traditional companies have dealt with for years.

The lawsuit, filed Oct. 19 by former SpaceX technician Stan Saprito in California’s Superior Court for Los Angeles County, alleges that the company violated state law by not properly accounting for overtime and forcing workers to go more than five hours without a 30-minute meal break. The complaint was filed as a class action suit, meaning others are invited to join in.

SpaceX has crossed the threshold from feisty startup to established player, with the obligations that go with it.

Whether or not there is any merit to Mr. Saprito’s lawsuit remains to be seen. In a statement, SpaceX denied the claims and said it would refute them in court.

SpaceX is easily the biggest and most recognizable of the new breed of entrepreneurial space companies fueled by Silicon Valley venture capital and the accompanying work ethic. Employees of these startups are expected to work prodigious hours, often for relatively low pay, with the promise of great rewards that are staked to the company’s ultimate success.

In many ways the model is serving the space industry well: These companies are driving technical innovation, doing more with less and expanding the breadth of space applications. There is perhaps no better example than SpaceX, whose low-cost Falcon 9 rocket has shaken up a U.S. launch industry that had effectively abandoned the commercial market while growing fat and happy on guaranteed government contracts.

A SpaceXer sports the company's logo at a launch party. Credit: SpaceX
A SpaceXer sports the company’s logo at a launch party. Credit: SpaceX

But in doing so, SpaceX has crossed the threshold from feisty startup to established player, with the obligations that go with it. The company now has 4,000 employees and is under tremendous pressure to work off its substantial commercial backlog even as it seeks to make inroads into the lucrative government launch market.

Under these circumstances, it is not surprising that SpaceX would begin experiencing labor pains, especially in a state with a reputation for vigilance in protecting the rights of workers.

California is of course home to numerous companies that have famously made the leap from startup to technology giant, but SpaceX as a manufacturing operation is somewhat different. It’s probably a safe bet that many SpaceX workers these days came from traditional aerospace companies like Boeing, which is heavily unionized and is no stranger to labor disputes.

SpaceX is bound to face more employee lawsuits as it continues to expand while striving to keep a lid on costs. The challenge for SpaceX, and for those who wish to follow in its footsteps, is finding a balance between demanding the most of its workers and keeping them happy overall. Getting that formula right is an often-overlooked key to long-term success.