What is going on at Tesla’s factories? Rumor has it that Tesla has been terminating numerous its staff and these rumors might now be confirmed. Two former Tesla staff are submitting a category motion lawsuit that claims Tesla’s mass layoffs violated federal regulation.

John Lynch and Daxton Hartsfield previously labored at Tesla’s Gigafactory plant in Sparks, Nevada and have been fired on June tenth and June fifteenth. They insist that 5 hundred staff have been notified this previous month that they have been terminated and that these terminations have been efficient instantly. The lawsuit claims that these terminations rely as mass layoffs and are in violation of the Worker Adjustment and Retraining Notification (WARN) Act of 1988.

The WARN Act requires corporations with 100 or extra staff to offer staff and different associated officers with at the very least sixty days of warning earlier than mass layoffs or the closing of a plant underneath sure circumstances. The objective of the act is to “provide workers with sufficient time to prepare for the transition between the jobs they currently hold and new jobs.” Labor attorney Shannon Liss-Riordan, the lawyer representing the former employees, remarked, “Tesla started laying people off in blatant disregard for the WARN act.”

However, there are some exceptions to the WARN Act. Employees would not be covered under the WARN Act if “50-499 workers lose their jobs and that number is less than 33% of the employer’s total active workforce at a single site.” It is believed that there are over 7,000 employees at the Gigafactory in Nevada. We do not know exactly if 500 people were fired, but they would only constitute a little over 7% of the supposed workforce at that site. The lawsuit may turn into a number’s game.

Tesla has not issued an official statement, but Elon Musk recently said that the lawsuit is “trivial. He commented, “Let’s not read too much into a pre-emptive lawsuit that has no standing… Anything that relates to Tesla gets big headlines, whether it is a bicycle accident or something much more serious.”

The purported layoffs may be part of Tesla’s plan to reduce the number of salaried employees. Musk claimed earlier this month that he had a “super bad feeling” about the economy and recommended that Tesla cut roughly 10% of its salaried workforce. The layoffs would focused on salaried employees as it is believed that Tesla is now “overstaffed” after a period of growth. The hope is that Tesla will be able to quickly recover from any economic downturn, especially as many believe a recession is on the horizon. Musk further elaborated, “A year from now, I think our headcount will be higher in both salaried and obviously in hourly.”

Images courtesy of Tesla