Former Employees Sue Tesla over 'Mass Layoffs'

© Reuters. Former Employees Sue Tesla (TSLA) over 'Mass Layoffs'

By Michael Elkins

A lawsuit was filed Sunday by two former Tesla (NASDAQ:TSLA) employees in Texas. The lawsuit alleges that the electric car company violated federal law by not providing enough advanced notice before carrying out "mass layoffs." According to the suit, more than 500 employees were terminated at Tesla’s Nevada factory.

The suit is 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 CEO, Elon Musk said on June 2nd that he had a "super bad feeling" about the economy and that Tesla needed to cut staff by about 10%, according to an internal email.

The two workers who filed the suit, John Lynch and Daxton Hartsfield, were fired on June 10 and June 15 respectively. They are seeking 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," said Shannon Liss-Riordan, an attorney representing the workers.

Musk played down the lawsuit.

"Let's not read too much into a pre-emptive lawsuit that has no standing," he said at the Qatar Economic Forum.

"It seems like anything related to Tesla gets a lot of clicks, whether it is trivial or significant. I would put that lawsuit you're referring to in the trivial category."

Last week, Thursday, a lawsuit was filed against Musk and his companies for alleged fraud, as well as violating federal and state racketeering and gambling laws, and seeks class-action status on behalf of dogecoin investors. That same day, a lawsuit was filed against Musk for “toxic workplace culture.”