Tesla sued by former employees over 'mass layoff'

A Tesla logo is seen in Los Angeles

Mon, June 20, 2022, 5:29 PM
By Akriti Sharma and Hyunjoo Jin

(Reuters) - Former Tesla Inc employees have filed a lawsuit against the U.S. electric car company alleging its decision to carry out a "mass layoff" violated federal law as the company did not provide advance notice of the job cuts.

The lawsuit was filed late Sunday in Texas by two workers who said they were terminated from Tesla's gigafactory plant in Sparks, Nevada in June. According to the suit, more than 500 employees were terminated at the Nevada factory.

The workers allege the company failed to adhere to federal laws on mass layoffs that require a 60-day notification period under the Worker Adjustment and Retraining Notification Act, according to the lawsuit.

They are seeking class action status for all former Tesla employees throughout the United States who were laid off in May or June without advance notice.

"Tesla has simply notified the employees that their terminations would be effective immediately," the complaint said.

Tesla, which has not commented on numbers of layoffs, did not immediately respond to requests for comment about the lawsuit.

Musk, the world's richest person, said earlier this month he had a "super bad feeling" about the economy and that Tesla needed to cut staff by about 10%, according to an email seen by Reuters.

More than 20 people identifying themselves as Tesla employees said they were laid off, let go or had positions terminated this month, according to online postings and interviews with Reuters.

The action filed by John Lynch and Daxton Hartsfield, who were fired on June 10 and June 15 respectively, seeks pay and benefits for the 60-day notification period.

"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, an attorney representing the workers told Reuters.

She said Tesla is offering some employees only one week of severance, adding that she is preparing an emergency motion with a court to try to block Tesla from trying to get releases from employees in exchange for just one week of severance.

The suit was filed in the U.S. District Court, Western District of Texas.

(Reporting by Akriti Sharma in Bengaluru and Hyunjoo Jin in San Francisco; editing by Richard Pullin)

Tesla investor sues Musk, board over accusation of workplace discrimination

Thu, June 16, 2022

(Reuters) - A Tesla Inc shareholder sued the electric car maker, Chief Executive Elon Musk and its board, accusing them of neglecting to tackle complaints about workplace discrimination and harassment, and engendering a "toxic workplace culture."

Thursday's lawsuit is the latest against Tesla, which has been accused of racial discrimination and sexual harassment in its factories.

"Tesla has created a toxic workplace culture grounded in racist and sexist abuse and discrimination against its own employees," the investor, Solomon Chau, said.

"This toxic work environment has gestated internally for years, and only recently has the truth about Tesla's culture emerged," he added in the complaint.

"Tesla's toxic workplace culture has caused financial harm and irreparable damage to the company's reputation."

Tesla did not immediately respond to an email seeking comment outside regular U.S. business hours.

Kendall Law Group PLLC, the lawyers representing Chau, were not available outside regular U.S. business hours.

Tesla has said it does not tolerate discrimination and has taken steps to tackle workers' complaints.

The lawsuit accuses the defendants — Musk, 11 Tesla board members and the company — of having breached their fiduciary duty by failing to address and remedy the red flags concerning internal reports of discrimination and harassment.

This caused Tesla to lose high-quality employees and incur costs for defending cases and settling fines for violations, the lawsuit said.

The case is Chau et al v. Musk et al, US District Court, Western District of Texas (Austin), 1:22-cv-00592.

(Reporting by Sayantani Ghosh and Kevin Krolicki in Singapore and Abinaya V in Bengaluru; Editing by Kim Coghill)