Two former Tesla employees filed suit against the automaker on Sunday for allegedly violating federal law through its decision to lay off much of its staff.
Earlier this month, Tesla CEO Elon Musk told executives that he had a “super bad feeling” about the economy and asked them to begin dismissing 10% of employees. According to a class action complaint filed by John Lynch and Daxton Hartsfield — who worked at Tesla’s Gigafactory 2 plant in Sparks, Nevada — the company violated the Worker Adjustment and Retraining Notification (WARN) Act by failing to provide 60 days of advance written notice regarding the mass layoff.
“Plaintiffs and all similarly situated employees have been damaged by Tesla’s conduct constituting violations of the WARN Act,” the lawsuit argues, “and are entitled to damages for their back pay and associated benefits for each day of the violation because Tesla has not acted in good faith nor with reasonable grounds to believe their acts and omissions were not a violation of the WARN Act.”
Lynch and Hartsfield were allegedly informed of their dismissals on June 10 and 15, respectively, and laid off on the same days. They believe that “more than 500” coworkers were placed in the same situation.
“It’s pretty shocking that Tesla would just blatantly violate federal labor law by laying off so many workers without providing the required notice,” Shannon Liss-Riordan, a lawyer representing the workers, told Reuters.
The Nevada employees are not the only ones affected by the layoffs. A Monday report from electric vehicle news outlet Electrek showed that two employees involved in volunteer LGBTQ and diversity roles at the automaker also lost their jobs. Electrek made clear that both separations were part of the “broader wave of layoffs,” but repeated that both employees had received multiple promotions in their relatively short tenures, seemingly indicating that their performance was not a cause for concern.
Regarding Tesla’s overall layoff plans, Musk has since clarified that he intends to decrease salaried headcount by 10% while increasing hourly staffing — ultimately affecting 3.5% of the overall workforce. “A year from now, I think our head count will be higher in both salaried and obviously in hourly,” Musk said at a Bloomberg conference on Tuesday, per CNBC.
According to CNBC, Musk, the world’s richest man, also said that Lynch and Hartsfield’s lawsuit has “no standing.”
“That is a small lawsuit of minor consequence,” he commented. “Anything that relates to Tesla gets big headlines, whether it is a bicycle accident or something much more serious.”
Meanwhile, at SpaceX — which Musk also leads — multiple employees were fired for drafting and circulating a letter blasting the billionaire for his “behavior” and “values.”
“Elon’s behavior in the public sphere is a frequent source of distraction and embarrassment for us, particularly in recent weeks,” the letter asserted. “As our CEO and most prominent spokesperson, Elon is seen as the face of SpaceX — every tweet that Elon sends is a de facto public statement by the company.”
SpaceX President and COO Gwynne Shotwell said in an email that the employees had been fired. “We have too much critical work to accomplish and no need for this kind of overreaching activism,” she wrote.