- Tesla goes to court to dismiss layoff lawsuits.
- The company has laid off more than 500 workers between May and June.
- The company is trying to stop class action lawsuits.
Tesla goes to court to have a lawsuit dismissed that accuses Elon Musk’s company of violating federal law by laying off hundreds of workers without notice.
The filing was made in Austin, Texas where the company’s headquarters are located. Tesla contended that the fired workers signed agreements to conduct legal disputes about their jobs with the inclusion of refraining from participating in class action lawsuits. Elon Musk’s company argued that it only adjusted the size of its workforce by laying off underperforming workers and without requiring prior notice. For these reasons, dismissal of the case is sought.
The federal Worker Adjustment and Retraining Notification (WARN) Act requires at least 60 days’ notice for layoffs. The exception is if those layoffs are caused by natural disasters or unforeseeable business circumstances such as the COVID-19 pandemic.
This lawsuit filed last month by two former Tesla employees alleges the wrongful termination of more than 500 workers at its Nevada factory. The plaintiffs are seeking to convert the lawsuit into a class action by adding all former workers that Tesla laid off during May and June across the United States. The previous week the plaintiffs have moved to prevent Tesla from having Tesla sign severance agreements with a clause that would prevent suing the company in the future.
In Thursday’s filing Tesla argued that it is standard policy to ask its laid-off workers to sign waivers and that the agreements are within the law given that no worker was asked to sign one after the lawsuit was filed. However, some U.S. courts have held that waivers signed by workers are not valid while a lawsuit is pending.