Former Tesla employees Monday filed a lawsuit against the company for allegedly laying off “thousands” of workers without notice federally required by the Worker Adjustment and Retraining Notification (WARN) Act.
John Lynch and Daxton Hartsfield filed a class action complaint in the US District Court for the Western District of Texas, Austin Division alleging that Tesla completed a mass layoff without advance or written notice. A mass layoff is defined by the WARN Act as a layoff during which an employer lays off between “50 to 499 full-time workers at a single site of employment and that number is 33% of the number of full-time workers at a single site of employment[.]”
The WARN Act requires companies to provide employees with written notice of a mass layoff or plant closing 60 days in advance. The complaint alleges Tesla failed to provide either written notice or advance notice to employees prior to terminating their employment. However, in early June, CEO Elon Musk “communicated to Tesla’s top executives that Tesla needed to eliminate 10% of its total workforce.”
Just last week, the US Court of Appeals for the Fifth Circuit held that the COVID-19 pandemic was not a natural disaster under the WARN Act. Therefore, employers are not allowed to initiate mass layoffs due to pandemics without notice to employees prior to termination.
The complaint asks the court for relief, including compensatory damages, reasonable attorneys’ fees and expenses and any other relief the court deems appropriate.