Tesla sued for ‘mass layoff’

Two former employees of Tesla Inc. (NASDAQ:TSLA) have filed a lawsuit against the US electric car company, alleging that its decision to lay off 10% of its workforce was not accompanied by the required notice, reported Bloomberg News Monday.

What happened

The workers allege the company failed to comply with federal mass layoff laws that require a 60-day notification period under the Worker Adjustment and Retraining Act (WARN).

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John Lynch and Daxton hartsfield are among 500 employees fired from Tesla’s massive factory in Sparks, Nevada, according to the lawsuit filed Sunday night in Austin, Texas.

Both say they received no notice of termination and are seeking class action status for all former Tesla employees across the United States who were terminated in May or June without notice.

Indeed, the WARN requires companies to provide 60 days notice before any collective dismissal affecting 50 or more employees on the same site.

Why this matters

Elon Musk wrote in an email earlier this month that he had a “super bad feeling” about the economy and that Tesla needed to cut its workforce by about 10%.

However, the world’s richest man clarified last week that the firm is not freezing hiring and that its “hourly headcount will increase” over the next year.

Price movement

On Friday, Tesla stock price fell 1.7% to $650.3, according to data from Benzinga Pro.

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