Tesla Slammed with Lawsuit By Former Employees After Mass Layoffs The former workers are alleging that their terminations violated federal law.

By Emily Rella Jun 21, 2022

Opinions expressed by Entrepreneur contributors are their own.

Things are continuing to tense up between Elon Musk and some former Tesla workers. A new lawsuit was filed by former employees this month claiming their dismissal violated federal law.

The class-action lawsuit was filed by John Lynch and Daxton Hartsfield, former Tesla gigafactory workers in Nevada who were let go on June 10 and June 15, respectively.

The ex-employees claim that over 500 employees had been let go from the factory in a "mass layoff."

The legal document, which was obtained by Reuters, alleges that the employees were not given advanced notice that there would be upcoming job cuts.

According to the WARN Act (Worker Adjustment and Retraining Notification Act) businesses that employ over 100 workers are required to give employees at least 60 days' notice prior to a mass layoff or closing, and employees are entitled to compensation if the employer fails to do so.

Layoffs are considered a "mass layoff" in the U.S. if they meet one of three conditions: if the employees let go made up one-third of the company's total employees and at least 50 employees were laid off; if 500 employees were laid off over a 30-day time frame; or if an entire plant has been shut and 50 employees were laid off over 30 days.

In the case of Tesla, the second condition would be applied, as the former employees are seeking pay and benefits for the 60-day notification period.

Last week, Reuters reported that Tesla's job postings had dropped 14% since Musk's email on June 2 was leaked, which called for a pause in Tesla hiring worldwide.

Musk also lamented in the same email that he had a "super bad feeling" about the state of the economy and that the electric car maker should look to terminate 10% of its workforce.

As of December 31, 2021, Tesla was employing 99,290 people worldwide, per an SEC filing.

Lawsuit aside, Tesla was up nearly 11% in a 24-hour period as of Tuesday afternoon.

Emily Rella

Senior News Writer

Emily Rella is a Senior News Writer at Entrepreneur.com. Previously, she was an editor at Verizon Media. Her coverage spans features, business, lifestyle, tech, entertainment, and lifestyle. She is a 2015 graduate of Boston College and a Ridgefield, CT native. Find her on Twitter at @EmilyKRella.

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