The class-action lawsuit was filed by John Lynch and Daxton Hartsfield, former Tesla gigafactory workers in Nevada who were let go on June 10 and June 15, respectively.
The ex-employees claim that over 500 employees had been let go from the factory in a “mass layoff.”
The legal document, which was obtained by Reuters, alleges that the employees were not given advanced notice that there would be upcoming job cuts.
According to the WARN Act (Worker Adjustment and Retraining Notification Act) businesses that employ over 100 workers are required to give employees at least 60 days’ notice prior to a mass layoff or closing, and employees are entitled to compensation if the employer fails to do so.
Layoffs are considered a “mass layoff” in the U.S. if they meet one of three conditions: if the employees let go made up one-third of the company’s total employees and at least 50 employees were laid off; if 500 employees were laid off over a 30-day time frame; or if an entire plant has been shut and 50 employees were laid off over 30 days.
In the case of Tesla, the second condition would be applied, as the former employees are seeking pay and benefits for the 60-day notification period.
Last week, Reuters reported that Tesla’s job postings had dropped 14% since Musk’s email on June 2 was leaked, which called for a pause in Tesla hiring worldwide.
Musk also lamented in the same email that he had a “super bad feeling” about the state of the economy and that the electric car maker should look to terminate 10% of its workforce.
As of December 31, 2021, Tesla was employing 99,290 people worldwide, per an SEC filing.
Lawsuit aside, Tesla was up nearly 11% in a 24-hour period as of Tuesday afternoon.