Tesla offers to dismiss mass layoff lawsuit

Tesla Inc on Thursday asked a U.S. court to dismiss a lawsuit alleging the electric car maker violated federal law by laying off hundreds of workers without notice.

Tesla, in a filing in federal court in Austin, Texas, where the company is based, said the terminated workers had signed valid agreements to bring employment-related legal disputes to arbitration and agreed to refrain from participating in class actions.

Even if the case remained in court, it would have to be thrown out because the company was only “right-sizing” by laying off underperforming workers and not making layoffs that required notice, Tesla said.

Plaintiffs’ attorneys did not immediately respond to a request for comment.

The federal Worker Adjustment and Retraining Act (WARN) requires companies to notify workers of mass layoffs at least 60 days in advance, unless caused by natural disasters or “unforeseeable business circumstances.” “.

The lawsuit filed in June by two former Tesla employees accuses the company of breaking the law by abruptly laying off more than 500 workers at its gigafactory in Sparks, Nevada, as part of a nationwide purge of its hand -work.

The plaintiffs seek class action status for all former Tesla employees across the United States who were terminated in May or June without notice.

Last week, plaintiffs moved to block Tesla from asking workers to sign severance agreements giving up their ability to sue the company in exchange for one or two weeks’ pay.

In Thursday’s filing, the company said it routinely asks dismissed workers to sign waivers and that the agreements were appropriate because no worker was asked to sign one after the complaint was filed. Some courts have held that waivers signed by workers while a lawsuit is pending are invalid.

The case is Lynch v. Tesla Inc, US District Court for the Western District of Texas, No. 1:22-cv-00597.

(Reporting by Daniel Wiessner in Albany, New York, editing by Alexia Garamfalvi and Bill Berkrot)

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