Tesla Wants Mass Layoff Lawsuit Thrown Out Of Court

Industry News / 6 Comments

Tesla claims employees signed contracts stating they wouldn't file class action lawsuits.

Tesla is having a rough week following an announcement that the Feds are investigating the latest fatal Model S crash. Tesla's top artificial intelligence executive resigned after the Autopilot department cut 200 jobs.

The latest lousy press also relates to unexpected layoffs, but this time it concerns 500 employees at Gigafactory Nevada. Shortly after these employees were let go by Tesla, a lawsuit was filed by two workers. According to the workers, Tesla failed to adhere to the federal mass layoff policy. The employees are seeking class-action status for all Tesla employees terminated in May or June.

The lawsuit stated that Tesla employees were simply notified that terminations would be effective immediately.


The latest development in the case is Tesla filing for a dismissal in the federal court in Austin, Texas. Tesla ditched California and moved to Texas in December last year.

Tesla argues that terminated workers signed contracts stipulating that employment disputes should be settled in arbitration. The agreement also stops employees from participating in class action lawsuits.

According to Reuters, Tesla is also arguing that should the case make it to court, it should be thrown out because it was not engaged in layoffs that require advanced notice. Tesla was "right-sizing" and only firing poorly performing workers.

The federal Worker Adjustment and Retraining Notification (WARN) act states that employers must inform workers of mass layoffs at least 60 days before the termination date. The act makes allowances for natural disasters and unforeseeable business circumstances.

This latest development comes less than a week after the plaintiffs in this case filed a motion to stop Tesla from getting workers to sign a waiver in exchange for two weeks' pay. On this topic, Tesla argued that it asked fired employees to sign waivers all the time and that it was proper since the waivers were signed before the original lawsuit was filed.

Source Credits: Reuters

Join The Discussion



Related Cars

To Top