Tesla Class Action: Did You Lose Your Job in April's Mass Layoffs?

Thousands of Tesla employees who lost their jobs in mass layoffs in April should be eligible for compensation, a new class action lawsuit alleges.

Plaintiff Sharon Lane Chin — a former Tesla employee — filed the class action lawsuit against Tesla Inc. on June 27 in a California federal court, alleging violations of the Worker Adjustment and Retraining Notification Act (WARN Act). 

The complaint, lodged in response to mass layoffs and plant closings that began on April 14, alleges that Tesla violated both federal and California state laws by failing to provide the requisite 60 days’ advance notice before the layoffs. 

Chin is looking to represent thousands of employees who were laid off, and is seeking at least 60 days in back pay and benefits for the workers.

Tesla Employees Claim Sudden Layoffs Left Them Stranded

Chin says she was employed as a Parts Advisor at Tesla's manufacturing facility in Dublin, California in April, when the surprise layoffs were announced. 

Along with her, over 14,000 other employees were terminated without notice as part of the mass layoff orchestrated by Tesla, she says.

The Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100 or more employees to provide 60 days' advance notice of mass layoffs or plant closings, allowing workers time to seek alternative employment or training opportunities. Chin says this didn’t happen.

“[Tesla] ordered the termination of the Plaintiff’s employment together with the termination of more than10% of its employees who worked at or reported to the Facility as part of plant closings for which they were entitled to receive 60 days advance written notice,” she says.

According to the complaint, the employees had been with the company for at least six months of the twelve months preceding the layoffs, which qualifies them for protection under the WARN Act. Despite this, Tesla flouted its legal obligation to notify both its employees and relevant state authorities about the layoffs, the lawsuit states.

Thousands of Tesla Workers Left in Financial Limbo After Abrupt Terminations

Chin says she and thousands of others of workers suffered serious harm when they were laid off by Tesla without notice. 

When Tesla terminated their contracts, it failed to pay the workers their wages, salary, commissions, bonuses, accrued holiday pay, and accrued vacation for 60 days following their terminations. It also failed to make the pension and 401(k) contributions and provide employee benefits under ERISA, other than health insurance, for the 60 days, too, she says.

As a result, she’s looking to represent all Tesla employees who were terminated from employment at the Dublin facility on or around April 14, 2024, as part of a mass layoff or plant closing.

WARN Act Lawsuits on the Rise as Workers Fight Back Against Surprise Mass Layoffs

The WARN Act, designed to protect employees from unexpected mass layoffs, is seeing a surge in related lawsuits. Several high-profile companies have recently faced legal battles and costly settlements for alleged violations.

In 2018, Toys "R" Us paid millions to settle a lawsuit from employees who claimed they were terminated without the required 60-day notice following the company's bankruptcy. More recently, Rosen Hotels and Resorts settled a $2.3 million WARN Act case brought by hundreds of employees who were indefinitely laid off during the COVID-19 pandemic.

This trend continues in 2024 with several notable cases. In May, a former Red Lobster employee filed a class action lawsuit alleging the chain violated the WARN Act by conducting surprise restaurant closures and layoffs. Similarly, a former employee of battery factory Microvast filed a complaint alleging dozens of workers were terminated without cause or the mandated 60-day warning, causing significant hardship for many.

Even the prestigious Philadelphia University of the Arts (UArts) faced a class action lawsuit from former faculty and staff after its sudden closure in May 2024. The abrupt decision sparked student protests and widespread criticism.

In the Tesla mass layoffs class action lawsuit, Chin is seeking damages, fees, costs and a jury trial. She’s also asking for restitution for unpaid wages, salary, commissions, and benefits for the 60-day period following the workers’ terminations. 

Case Details

• Lawsuit: Chin v. Tesla Inc.
• Case Number: 3:24-cv-03873-LB
• Court: U.S. District Court for the Northern District of California

Plaintiffs' Attorneys

• Daniel Feder (Law Offices Of Daniel Feder)
• Eric Lechtzin (Edelson Lechtzin LLP)