Tesla Inc (NASDAQ:TSLA) is being sued by two former employees who claim the electric car company's decision to lay off staff at its Texas plant broke federal law as workers were not given advance notice.
The workers, who say they were fired from Tesla's gigafactory in Sparks, Nevada in June filed the lawsuit in Texas on Sunday.
The lawsuit claims over 500 employees were dismissed at the factory in Nevada.
The workers allege the company violated federal mass layoff laws that require 60-day notice under the Worker Adjustment and Retraining Notification Act, reported Reuters.
The class action lawsuit was filed on behalf of all former Tesla employees in the US who were laid off without notice in May or June.
"Tesla has simply notified the employees that their terminations would be effective immediately," said the suit filed by John Lynch and Daxton Hartsfield, who were fired on June 10 and June 15 respectively, as the suit sought pay and benefits for the 60-day notification period.
At the the Qatar Economic Forum, Musk said he plans to slash the numbers of salaried workers by 10% at Tesla over the coming three months as he predicted a US recession was 'inevitable'.