Tesla asks U.S. court to dismiss lawsuits related to layoffs

Electric car maker Tesla asked a U.S. court to dismiss a lawsuit related to recent layoffs. In the lawsuit, Tesla is accused of violating federal law by firing hundreds of employees without notice.


Tesla filed documents in federal court in Austin, Texas, where the company is headquartered, alleging that the fired employees had signed valid agreements with them to submit employment-related legal disputes to arbitration rather than courts and that they were not entitled to participate in a class. litigation.


Tesla said that even though the case is still in court, it should be dismissed because the company made "reasonable layoffs" by firing "underperforming" employees, not layoffs that required advance notice. Lawyers for the plaintiffs did not immediately respond to a request for comment.


Tesla CEO Elon Musk recently said the company would reduce its salaried workforce by about 10% and would also increase the hiring of hourly workers. Overall, the company-wide layoff rate will be 3%. Tesla began notifying affected employees in May and June, and the layoffs continued through July.

Recently, Tesla closed its Autopilot office for driver assistance systems in San Mateo, California, laying off more than 200 workers. The remaining employees will be transferred to the company's Autopilot offices in Buffalo, New York.


The federal Worker Adjustment and Retraining Notification Act (WARN) requires companies to give employees at least 60 days' notice when deciding to make a mass layoff unless the layoff is caused by a natural disaster or "unforeseen business circumstances."


In June, two former employees filed a lawsuit against Tesla, accusing the company of breaking the law by abruptly firing more than 500 workers at its Sparks, Nevada Gigafactory.


The two plaintiffs are seeking class-action status for all former Tesla employees across the country who were fired without notice in May or June. Last week, they also moved to stop Tesla from requiring employees to sign severance agreements that waive the right to sue the company in exchange for one to two weeks of wages.


Tesla said in Thursday's filing that the company typically requires laid-off employees to sign waivers. The agreements were appropriate because no worker was required to sign a waiver after filing a lawsuit. Because some courts have held that waivers signed by workers during litigation are invalid.

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