Tesla must be used to lawsuits by now.
Tesla is in a rather precarious position right now. Production of the entry-level Model 3 isn’t going smoothly, to say the least. In the company CEO’s own words, Tesla is experiencing a period of “deep production hell” in what is meant to be one of the biggest car launches of the year. Elon Musk admitted a few weeks ago that only 260 Model 3s had been built out of its initial 1,500-unit forecast, and still has nearly half a million orders to fulfill. No pressure, then.
The situation is so bad that Tesla was forced to delay revealing its electric semi-truck after failing to meet the Model 3’s production targets. Tesla is clearly struggling to meet the Model 3's high demand, so it came as a huge surprise when the company fired around 400 employees at such a crucial time. Tesla claims these mass lay-offs were part of an annual performance review which found that some of its employees weren’t meeting expectations. However, Tesla is now facing a lawsuit from one of its former employees who claims that the automaker broke Californian law by dismissing employees without proper notice.
Ex-Tesla employee Abraham Duarte alleges that Tesla is breaching California’s WARN Act, which requires an employer to provide 60 days’ notice if it intends on laying off more than 50 employees. Speaking to Jalopnik, Duarte’s attorney Nick Rosenthal claims that Tesla is using the 'performance reviews' as a cover-up for the lay-offs. “We understand that Tesla’s, presumably, going to say, ‘No, this isn’t a layoff, it wasn’t due to a lack of work, it was because they were bad employees,’” he told Jalopnik. “We know that, in the case of our client, that certainly wasn’t true. He was an excellent employee. That’s why we believe they’re just using this excuse, ‘Oh, these employees are underperforming.'"
Tesla doesn’t believe it has breached the WARN Act, however, as it doesn’t apply to the situation, reaffirming that the employees weren't laid off but were fired due to poor performance. “Like all companies, Tesla conducts an annual performance review during which a manager and employee discuss the results that were achieved, as well as how those results were achieved, during the performance period,” a Tesla spokesperson said in a statement. “This includes both constructive feedback and recognition of top performers with additional compensation and equity awards, as well as promotions in many cases."
As with any company, especially one of over 33,000 employees, performance reviews also occasionally result in employee departures. Tesla is continuing to grow and hire new employees around the world.”