There are several things that might be causing this problem with your arugula seedlings. First, we suspect the seedlings may be drying out too much between waterings. Drying out is easily done if they are still in flats, 6-packs, or other situations where the roots are becoming root-bound/too crowded. Thin out the seedlings so they are not crowded as per instructions on the seed packet It might also be a case of over-fertilizing. At this seedling stage you should be feeding at half strength no more than every other time you water. Also is the container in full sun and does the container have drainage holes. Arugula need full sun and excellent drainage. Finally, seedlings need very well draining commercial and sterile potting soil – not soil from the garden. Hope these tips help you.