SpaceX is facing a lawsuit by two former employees alleging it violated labor laws when the company terminated them and others. The rocket manufacturer is accused of “mass layoffs” that included 200 to 400 employees without providing the 60-day notice as required by state law. The plaintiffs are seeking damages that include back-pay plus interest, in addition to seeking to have the lawsuit certified as a class action.
A California employer with at least 75 employees that intends to lay-off 50 or more workers must provide 60 days’ notice. Failure to provide the notice results in the company’s liability to pay up to 60 days’ compensation and benefits. The law also provides for civil penalties up to $500 a day if the company also fails to notify the government officials of the layoff.
In the SpaceX lawsuit the primary issue will be whether the terminations meet the criteria of a lay-off. California law defines it as “a separation from a position for lack of funds or lack of work.”
SpaceX is claiming the employees were fired because they were “low performers.” The company has stated the terminations were not related to a lack of work funds, but were the result of an annual review of the individuals’ performance. Plaintiffs allege that the lay-off was a tactic used by the company to avoid paying 60 days’ worth of pay and benefits to the terminated employees.
SpaceX is reportedly expecting to hire more employees than it terminates this year. In fact, some reports show that the company’s website has nearly 400 job openings posted on it.
The plaintiffs allege that they were never given warnings or consultations regarding their performance prior to their termination. Their lawsuit also contains allegations that SpaceX’s failure to provide the required notice and 60 days’ of compensation constitutes unfair competition.
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