Two former employees of the electric car company Tesla, led by billionaire Elon Musk, have filed a lawsuit against the company, citing that a “mass layoff” was conducted in violation of federal law, Reuters reported.
The plaintiffs alleged that the company did not follow United States' federal law regarding mass layoffs, which states that a 60-day notification period must be given, under the Worker Adjustment And Retraining Notification Act.
The lawsuit is seeking compensation, including pay and benefits, for the 60-day notification period that those laid off were supposed to have received.
More Than 500 Employees Terminated
The lawsuit was filed by two workers – John Lynch and Daxton Hartsfield – who were fired from Tesla’s gigafactory in Sparks, Nevada on 10 June and 15 June respectively.
The suit stated that more than 500 employees were fired from the Nevada factory. The plaintiffs are seeking class action status for their lawsuit, for all employees laid off by Tesla throughout the United States between May and June, without any advance notice period given.
Musk, the CEO of Tesla and the world’s richest person, said earlier this month that he had a "super bad feeling" about the economy and Tesla needed to reduce staff by about 10 percent, according to an email seen by Reuters.
Musk mentioned to “pause all hiring worldwide,” two days after staff was told to either return to offline working or to leave their job. Demand for Tesla cars and electric vehicles has been strong in the US, but has found it difficult to restart production at its factory in Shanghai after costs incurred during COVID-19 lockdowns.
Since the email was sent out, Tesla has cut job postings by 14 percent on its website, and Reuters has reported that at least 20 people identifying themselves as Tesla employees had claimed to be no longer employed in the past week.
Shannon Liss-Riordan, an attorney representing the workers, told the agency that Tesla is offering some employees only one week of severance pay, and is preparing an emergency motion with a court to try and block Tesla from getting releases from employees in exchange for only one week’s severance pay.
Tesla has not yet made any comments regarding the lawsuit or the number of layoffs taking place.
(With inputs from Reuters)
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