Tesla, run by Elon Musk, must notify its employees of a lawsuit it faces for allegedly violating federal laws by forcing workers to sign separation agreements, a U.S. judge has ruled.
Electric car maker Tesla was sued by two employees in June, who were fired in the company’s mass layoff.
John Lynch and Daxton Hartsfield, who worked at Tesla’s Gigafactory in the state of Nevada, said in the lawsuit that they were among “more than 500” Gigafactory employees who were fired.
Now, the district court has ordered Tesla to continue to notify its employees of the lawsuit “until the merits of plaintiffs’ claims are resolved in federal court or in arbitration proceedings.” reports TechCrunch.
Tesla had filed a motion last month to dismiss the claims.
More than 500 other employees have been laid off from Tesla’s Gigafactory in Nevada, after CEO Elon Musk announced the layoff of 10% of its salaried workforce.
According to the lawsuit, Tesla’s mass layoff violates the Worker Adjustment and Retraining Notification (WARN) Act.
The law requires employers to give workers at least 60 days notice before closing a facility or laying off 50 or more workers from the same site.
“Tesla failed to give plaintiffs and class members written notice of their termination,” the lawsuit reads.
“Instead, Tesla simply informed the employees that their layoffs would be effective immediately. Nor did Tesla provide a statement based on the reduction of the notice period to zero days’ notice,” he added.