Rackspace Gets Ransomware Attack Claims Sent to Arbitrator

Rackspace Technology Inc. customers must individually arbitrate their claims alleging the company negligently failed to prevent a ransomware attack that disrupted their email service and business operations, a federal court ruled.

An arbitration agreement between Rackspace and its customers contained in the company’s Master Services Agreement was valid and enforceable, Judge Xavier Rodriguez of the US District Court for the Western District of Texas said Thursday.

The judge granted Rackspace’s motion to compel arbitration and dismiss the proposed class lawsuit.

The lawsuit concerned a December 2022 ransomware attack that affected its Hosted Exchange email business, a service it provides for ...