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Tesla sued by former workers for allegedly violating federal law during ‘mass layoffs’

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INDIA - 2022/01/24: In this photo illustration a Tesla car logo seen displayed on a smartphone. (Photo Illustration by Avishek Das/SOPA Images/LightRocket via Getty Images)
Image Credits: SOPA Images (opens in a new window) / Getty Images

Two former Tesla employees filed a lawsuit against the EV maker Sunday alleging that the company did not provide the 60 days of advance notice required by federal law during a recent round of layoffs.

It’s the latest in a recent spate of suits brought by former employees against Tesla but the first filed since CEO Elon Musk’s June 2 warning that a coming economic downturn would force the company to lay off 10% of its salaried workforce.

The company has since revised its target to just over 3%, Musk said in a Bloomberg News interview at the Qatar Economic Forum last week.

The suit seeks class action status for Tesla employees laid off in the U.S. in May or June without the 60-day advance notice required by the Worker Adjustment and Retraining Notification Act, as well as pay and benefits for the 60-day notification period.

Musk said in internal emails early this month that he had a “super bad feeling” about the economy. Tesla remains the global market leader in EVs, but Volkswagen is poised overtake the Austin, Texas-based manufacturer in 2024, according to a Bloomberg Intelligence report released last week.

John Lynch and Daxton Hartsfield, the pair of workers who filed the lawsuit in the U.S. District Court for the Western District of Texas, were let go mid-June, along with more than 500 other employees, from Tesla’s Gigafactory 2 in Sparks, Nevada, according to the complaint.

The complaint also said that Tesla’s failure to provide advance written notice has had a “devastating economic impact” on the terminated workers. According to the suit, the company offered some employees one week of severance.

“Instead, Tesla has simply notified the employees that their terminations would be effective immediately,” the filing said. “Tesla has also failed to provide a statement of the basis for reducing the notification period to zero days advance notice.”

The automaker and its subsidiaries employed just under 100,000 workers in 2021, according to its annual filing. That includes headcount at its factories and facilities in Austin and Sparks, Nevada, as well as in Buffalo, New York, Fremont, California, Berlin and Shanghai.

The company did not return immediate request for comment Tuesday.

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