In June, Elon Musk said he intended to cut 10% of Tesla jobs after having a bad feeling about the economy.
Tesla has become the target of a lawsuit after mass layoffs without warning. The case comes from two former employees of the company, who supported the accusation in a US labor law. The lawsuit came to light after CEO Elon Musk announced a 10% job cut at the electric car maker.
The indictment is part of a lawsuit filed in the US District Court for the Western District of Texas. According to former employees at a company’s Nevada plant, John Lynch and Daxton Hartsfield, the layoffs violated the Worker Adjustment and Retraining Notification Act. In English, federal legislation is known by the acronym WARN (Worker Adjustment and Retraining Notification).
Federal law deals with mass layoffs. In this case, employers need to notify workers at least 60 calendar days in advance. The deadline applies when a company is going to close a facility or is going to lay off fifty employees or more, as explained by The Verge .
This appears to be the case for Tesla. In the lawsuit, the former employees alleged that more than 500 employees at the factory known as the Gigafactory were laid off without any notice. The action, on the other hand, aims to reach workers at all facilities in the country impacted by the shutdowns that took place in May or June.
“Under the WARN Act, Tesla is required to provide Claimants and Class Members sixty days’ written notice of a mass dismissal,” the suit reads. “However, in connection with the recent mass layoffs, Tesla has not given Claimants and Class Members any prior written notice of their terminations.”
The lawsuit asks for the payment of two months of salary and benefits to former employees of the company.
Musk announced a 10% cut in Tesla jobs
The lawsuit came to light a few weeks after Elon Musk announced the massive layoffs at Tesla . Earlier this month, an internal company statement went public, stating that 10% of jobs could be cut. Without going into too much detail, the decision was based on a “super bad feeling” about the economic scenario.
The company’s CEO commented on the process at an event on Tuesday (21), according to Reuters . For Musk, this is an “unfounded” action.
“It seems like anything related to Tesla gets a lot of clicks, whether trivial or significant,” he said at the Qatar Economic Forum 2022, held by Bloomberg in Doha, the capital of Qatar. “I would put this process you refer to in the trivial category.”
The lawyer in the case, Shannon Liss-Riordan, even spoke to the news agency. For her, it is very worrying for Musk to consider the violation of US labor law “trivial”. “While two months’ pay certainly doesn’t matter to him, it does matter a lot to the employees who have made his company what it is,” she told Reuters .