A massive wrongful termination case may be brewing in one of the world’s largest tech companies, Tesla. The automotive and clean-tech giant fired a whopping over 700 employees last month with little to no warning, which may lead to legal action against the company and its CEO Elon Musk.
Our wrongful termination attorney Los Angeles at Rager & Yoon – Employment Lawyers has reviewed the recent Tesla scandal involving more than 700 of its former employees.
Besides the apparent wrongful termination scandal, Tesla is facing ongoing protests, lawsuits and federal complaints. Speaking to The Star, employees went public with their wrongful termination complaints against Tesla and its CEO, Elon Musk.
Here’s why Tesla’s firing of 700 employees may be illegal
Among those over 700 employees fired in October, Tesla dismissed workers who joined the company four and more years ago. Many of the interviewed ex-Tesla employees insisted that they had received years of strong performance reviews, and yet their dismissal came with little to no warning and was unrelated to performance.
This kind of unlawful conduct on the part of the employer may entitle Tesla’s former employees to pursue legal action against the tech giant for wrongful termination, a wrongful termination lawyer at Rager & Yoon – Employment Lawyers explains.
Under federal and state laws in Los Angeles, employers are required to give employees oral and written warnings weeks prior to termination to give them enough time to fix their dipping performance, if performance is the case.
If performance is not the reason for firing, the employer is required to explain what led to the final decision. Firing employees with little to no warning may lead to a wrongful termination lawsuit.
Interestingly, when addressing the firing scandal earlier in November, weeks after the news of the sudden firing of 700 employees broke, CEO Elon Musk said the poor performance was to blame.
Musk explained that Tesla sets high work standards, which is why the company cares about performance so much. However, if poor performance was to blame for the firing of 700 employees in one scoop, the company should have provided the employees with statistics relevant to their alleged poor performance (missed deadlines, falling work production output, dipping sales figures, etc.).
Can former Tesla employees pursue wrongful termination?
Tesla is also under fire for requiring the terminated employees to sign a strict separation agreement, which was part of their severance package. In the agreement, Tesla prohibited former employees from criticizing or badmouthing the tech firm, its executives, investors, affiliated companies and pretty much anything that has to do with the company.
The terminated employees were also prohibited from specifically criticizing Musk. In return for their obedience – for signing the rather strict deal – Tesla would pay two weeks of severance pay.
The use of severance packages and requiring to sign non-disparagement agreements upon termination is a normal practice in the U.S., explains our Los Angeles wrongful termination attorney.
However, many former Tesla employees argued that the agreement was unfair and too restrictive.
The suspected wrongful termination scandal in Tesla came as somewhat a shock to our attorneys, as the company that claims it receives over 73,000 job applications worldwide would probably want to be more careful with its own employees, particularly when it comes to firing.
The scandal may negatively affect Tesla and Musk’s seemingly flawless reputation, and the tech firm could alienate the 700 fired employees once and for all (the company could find them useful for rehire as production demands increase).
Experienced wrongful termination attorneys at Rager & Yoon – Employment Lawyers are open to receiving questions from the terminated Tesla employees. We offer a free consultation to those who believe they were wrongfully terminated.
Find out more about your employment rights and how to pursue a wrongful termination claim in Los Angeles and elsewhere in California. Call our offices at 310-527-6994 or fill out this contact form for a free case evaluation.