Tesla sued by former employees over ‘mass layoff’

By Akriti Sharma and Hyunjoo Jin

(Reuters) -Former Tesla Inc employees have filed a lawsuit against the U.S. electric car company alleging its decision to carry out a “mass layoff” violated federal law as the company did not provide advance notice of the job cuts.

The lawsuit was filed late on Sunday in Texas by two workers who said they were terminated from Tesla’s gigafactory plant in Sparks, Nevada, in June.

According to the suit, more than 500 employees were terminated at the Nevada factory.

The workers allege the company failed to adhere to federal laws on mass layoffs that require a 60-day notification period under the Worker Adjustment and Retraining Notification Act, according to the lawsuit.

They are seeking class action status for all former Tesla employees throughout the United States who were laid off in May or June without advance notice.

“Tesla has simply notified the employees that their terminations would be effective immediately,” the complaint said.

Tesla CEO Elon Musk, the world’s richest person, said earlier this month he had a “super bad feeling” about the economy and that Tesla needed to cut staff by about 10%, according to an email seen by Reuters.

More than 20 people identifying themselves as Tesla employees said they were laid off, let go or had positions terminated this month, according to online postings and interviews with Reuters.

The action filed by John Lynch and Daxton Hartsfield, who were fired on June 10 and June 15 respectively, seeks pay and benefits for the 60-day notification period.

Tesla, which has not commented on numbers of layoffs, did not respond to requests for comment about the lawsuit.

Musk, however, on Tuesday called the lawsuit “trivial.”

“Let’s not read too much into a pre-emptive lawsuit that has no standing,” he said at the Qatar Economic Forum organised by Bloomberg.

“It seems like anything related to Tesla gets a lot of clicks, whether it is trivial or significant. I would put that lawsuit you’re referring to in the trivial category.”

Shannon Liss-Riordan, an attorney representing the workers, told Reuters she finds it very concerning that the richest man in the world considers it “trivial” that his company is blatantly violating federal labor law to protect workers.

“While two months’ pay certainly doesn’t matter to him, it matters a lot to the employees who made his company what it is,” she added.

She said Tesla is offering some employees only one week of severance, adding that she is preparing an emergency motion with a court to try to block Tesla from trying to get releases from employees in exchange for just one week of severance.

The lawsuit was filed in the U.S. District Court, Western District of Texas.

(Reporting by Akriti Sharma in Bengaluru and Hyunjoo Jin in San FranciscoEditing by Jason Neely and Matthew Lewis)