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Lawsuit claims SpaceX laid off hundreds without proper notice, pay

Surprise axe-lowering alleged to have violated California law

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Former employees of Elon Musk's SpaceX filed a class-action lawsuit against the private rocketry firm this week, alleging it unlawfully terminated hundreds of employees without giving proper notice or payouts for back wages and benefits.

SpaceX reportedly let go between 200 and 400 workers from its factory in Hawthorne, California, around July 21. At the time, company reps said the reduction amounted to less than 5 per cent of the company's workforce, but it's believed the actual figure may be as high as 10 per cent.

Under a California law called the Worker Adjustment and Retraining Notification (WARN) Act, employers must give workers 60 days' advance notice in the event of any plant closures or layoffs involving 50 or more employees within a 30-day period.

Employers that fail to give notice can be held liable for up to 60 days of back wages and benefits, but former SpaceX structural technicians Bobby Lee and Bron Gatling, who filed the lawsuit, say they were offered severance packages smaller than this.

At a press conference in late July, SpaceX president Gwynne Shotwell said that the terminations weren't layoffs, but that the company had simply fired "low performer" employees as part of its annual review process. But she also described the effort as a "headcount reduction," which sounds an awful lot like layoffs.

Then again, Musk's aerospace enterprise doesn't appear to be shrinking. It put a communications satellite into orbit for Hong Kong–based AsiaSat as recently as this past Tuesday, and its website is still brimming with open job listings. SpaceX itself has said that despite the recent firings, it plans to end 2014 with a net positive workforce growth of 20 per cent.

In addition to the alleged Cal WARN Act violations, Lee and Gatling's lawsuit also claims that SpaceX's handling of the firings violated California's Unfair Competition Law.

Because the suit was filed as a class action, anyone who was employed by SpaceX at any time within the four years up to when the complaint was filed could potentially benefit.

On top of back pay as required by the Cal WARN Act, the suit seeks compensatory damages, interest payments on the late wages, and funds for attorneys' fees and court costs. ®

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