Tesla is currently facing a lawsuit filed by former employees who are accusing the electric car company of unlawfully laying off staff without notice during Elon Musk’s recent cost-cutting measures. These two Nevada-based workers have launched a class action lawsuit claiming that Tesla violated US labor laws regarding mass layoffs, which require a 60-day warning period.
Earlier this month, Elon Musk announced the need to cut approximately 10,000 salaried jobs, approximately 10% of the workforce, due to concerns about the economy. However, the lawsuit filed in Texas, where Tesla is headquartered, alleges that the company failed to comply with the Worker Adjustment and Retraining Notification act, which stipulates that companies must give affected employees 60 days notice and provide them with pay throughout that period.
The employees state in the lawsuit, “Tesla has failed to give plaintiffs and the class members any advance written notice of their terminations. Instead, Tesla has simply notified the employees that their terminations would be effective immediately. Tesla has also failed to provide a statement of the basis for reducing the notification period to zero days advance notice. Tesla’s failure to provide its employees with any advance written notice has had a devastating economic impact on plaintiffs and the class members.”
The lawsuit seeks compensation for the 60-day period, including pay and benefits, as well as covering legal fees and any further relief that the plaintiffs and class members may be entitled to. The lawsuit has been filed by John Lynch and Daxton Hartsfield, employees at Tesla’s gigafactory in Nevada who were laid off on June 10 and June 15, respectively.
Elon Musk had informed executives that the company needed to freeze all hiring at the beginning of the month, stating that Tesla had become “overstaffed in many areas.” This announcement caused Tesla’s shares to drop by 9%. In fact, Tesla shares have experienced a decline of over 45% since the beginning of this year.
As of now, Tesla has not responded to requests for comment regarding the lawsuit.
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