Tesla Sued By Former Employees Over Mass Layoffs

Tesla's Gigafactory 3 in Shanghai. Image credit: Tesla

Two former Tesla workers at battery plant in Nevada sue company saying they were given no notice, as firm cuts headcount by 10 percent

Tesla has been sued by two former staff who say the company broke the law in laying them off, along with about 10 percent of Tesla’s workforce, without notice required by federal law.

The two workers, John Lynch and Daxton Hartsfield, said they worked at Tesla’s battery plant near Reno, Nevada, for about five years before being laid off this month without notice.

In a lawsuit filed late Sunday in Austin, Texas, federal court they said Tesla didn’t comply with the 60-day notification requirement under the Worker Adjustment and Retraining Notification Act (WARN) for mass layoffs.

The two said in the suit they were among more than 500 employees at the facility to be let go.

Image credit: Tesla
Image credit: Tesla

Mass layoffs

They are seeking class-action status for the lawsuit on behalf of others let go in May and June without notice, according to the complaint at the US District Court, Western District of Texas.

The WARN Act requires companies to provide a 60-day notice before layoffs affecting 50 or more employees at a single site.

Lynch said he was notified on 10 June that his employment was terminated, effective immediately, and Hartsfield said he was notified on 15 June.

“Tesla has simply notified the employees that their terminations would be effective immediately,” they said in the complaint.

Economic gloom

Boston-based employment attorney Shannon Liss-Riordan, who is representing the two, told reporters Tesla had “blatantly” disregarded the WARN Act.

Tesla didn’t respond to a request for comment about the lawsuit.

The electric vehicle maker, which moved its headquarters from California to Austin last year, has grown to about 100,000 employees worldwide and has hired rapidly in recent months.

But earlier this month chief executive Elon Musk reportedly told Tesla executives in an email that he had a “super bad feeling” about the economy and to cut headcount by 10 percent.


The firm has declined to comment publicly about layoff figures, but profiles on LinkedIn confirmed that the cuts had begun, with former Tesla staff indicating they had been let go.

Speaking at the Qatar Economic Forum, Musk reportedly called the lawsuit “trivial”.

He said the “pre-emptive” lawsuit “has no standing” and that “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,” he said, according to Reuters.