Tesla Faces New Lawsuit from Former Employees Over Mass Layoff Ethics

UTC by Tolu Ajiboye · 3 min read
Tesla Faces New Lawsuit from Former Employees Over Mass Layoff Ethics
Photo: Depositphotos

Ex-Tesla employees have served a class-action lawsuit against the company for carelessly handling its recent staff downsizing process.

A duo of former Tesla (NASDAQ: TSLA) employees recently filed a lawsuit against the electric vehicle (EV) company. According to the lawsuit, filed late Sunday in Texas, Tesla’s “mass layoff” of employees violated federal law. This is because Tesla failed to provide advance notice of the job cuts, which affected more than 500 workers at the company’s Gigafactory in Sparks, Nevada. The suit specified that the mass termination took place in June.

Former Tesla staff John Lynch and Daxton Hartsfield allege that the EV manufacturer did not abide by the prescribed 60-day notification period. The Federal Worker Adjustment and Retraining Notification Act specifies that companies should always follow this notification period for mass layoffs.

The lawsuit is seeking reparations for all Tesla employees laid off without advance notice in May or June. Furthermore, Lynch and Hartsfield are also seeking pay and benefits for the 60-day notification period. The duo was fired by the electric vehicle manufacturer on June 10 and June 15, respectively.

Plaintiff Attorney Weighs In

Commenting on the alleged manner of downsizing, Shannon Liss-Riordan, an attorney representing the workers, said:

“It’s pretty shocking that Tesla would just blatantly violate federal labor law by laying off so many workers without providing the required notice.”

In addition, she also stated that Tesla offered some employees only one week of severance. Liss-Riordan disclosed that she is preparing an emergency motion with a court to prevent Tesla from extracting releases from the affected employees for such a small severance.

According to online postings and interviews with Reuters, more than 20 people who claim to be ex-Tesla employees revealed they were fired or released this month.

Tesla is yet to respond to all the allegations surrounding the ethics of its downsizing – or the subsequent lawsuit. However, earlier in the month, company CEO Elon Musk gave a rather gloomy forecast of the economy. Musk conceded at the time that Tesla might have to cut around 10% of its staff.

Tesla Employees Lawsuit One of a Marked Few Against the EV Company

The recent lawsuit from aggrieved ex-Tesla staff is one of a growing number served against Tesla and Musk. Recently, Tesla shareholder Solomon Chau sued the company over toxic workplace allegations. Chau accused Tesla of creating an enabling environment for harassment and discrimination offenses, including racist and sexist abuse. The suit follows an earlier one from February this year by California’s Department of Fair Employment and Housing. The agency also alleged that some black Tesla employees repeatedly faced rampant racism.

Late last week, Musk, Tesla, and SpaceX also faced a fresh lawsuit from an aggrieved Dogecoin (DOGE) investor. According to Keith Johnson, the billionaire businessman and his companies ran a DOGE pyramid scheme that cost investors several billions of dollars.

Business News, Market News, News
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

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