Former Tesla employees have filed a lawsuit alleging that the company’s decision to lay off about 10 per cent of its workforce violated federal law by failing to provide the required advance notice.

Two Tesla workers filed the lawsuit late Sunday in Texas, alleging that they were fired from the company’s gigafactory plant in Sparks, Nevada, in June. More than 500 workers were laid off at the Nevada factory, according to the lawsuit.

According to the lawsuit, the workers claim the company failed to follow federal laws on mass layoffs, which require a 60-day notice period under the Worker Adjustment and Retraining Notification Act. They are requesting class-action status for all former Tesla employees who were laid off without warning in May or June across the United States.


“Tesla has simply notified the employees that their terminations would be effective immediately,” the complaint said. Tesla, which has not commented on the numbers of layoffs, did not immediately respond to requests for comment about the lawsuit.

According to an email received by Reuters, Tesla CEO Elon Musk, the wealthiest man, said earlier this month that he had a “super bad feeling” about the financial system and that the corporation would have to cut staff by about 10 per cent. According to online postings and discussions with Reuters, more than 20 people claiming to be Tesla employees said they were laid off, let go, or had their jobs terminated this month.

John Lynch and Daxton Hartsfield, who were fired on June 10 and June 15, respectively, have filed a lawsuit seeking pay and benefits for the 60-day notice 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 claims Tesla is only offering a few employees one week of severance, and she is getting ready for an urgent motion with the court to prevent Tesla from attempting to obtain employee releases in exchange for only one week of severance. The lawsuit was dismissed by Musk as “trivial”.

The electric-car manufacturer, which is now headquartered in Austin, has about 100,000 employees worldwide and has been rapidly hiring in recent months. Many people were caught off guard by the job cuts, which impacted everyone from human resources to software engineers.

According to reports, The petitioners are seeking monetary damages, as well as attorneys’ fees and costs, for the 60 days following their termination notice.

Following the filing of a lawsuit by former Tesla employees alleging that the automaker violated US labour laws, Elon Musk has sought to clarify how many workers will lose their jobs.

Musk said at a Bloomberg event on Tuesday that Tesla would trim its salaried workforce by 10 per cent in the next three months while increasing the number of hourly workers.

He clarified that the company will reduce salaried headcount by 10 per cent while increasing hourly staffing.

The tech mogul said was of the view that the layoffs would affect about 3.5 per cent of Tesla’s total workforce, but that the exact number was “not super material.” He added that salaried employees make up about two-thirds of Tesla’s workforce.