Former SpaceX Employees Sue

[newpylong]

http://www.dailybreeze.com/social-affairs/20140807/spacex-sued-for-laying-off-hundreds-of-workers-without-proper-notice

SpaceX is going to have a hard time winning this one. They will need evidence that the terminated employees were previously made aware of sub par performance. Firm wide restructuring or losing the least performing 5% out of the blue is layoffs, any way you want to spin it.

They are a young company growing rapidly. Hopefully they take steps to prevent this from happening again.
 

[wolfpack]

Looks to be real.

"The case is Bobby R. Lee et al. v. Space Exploration Technologies Corp., case number BC552901, in the Superior Court of the State of California, County of Los Angeles."

http://www.law360.com/employment/articles/564591/spacex-slapped-with-wage-class-action-over-mass-layoff

I had checked WARN when the rumors first broke and didn't see anything w.r.t. SpaceX, which made me think either it wasn't very many folks or that what just happened would happen.

For those who don't know what WARN is -

http://www.edd.ca.gov/jobs_and_training/Layoff_Services_WARN.htm

You'll find Boeing and LockMart in there several times.

[manboy]

http://www.dailybreeze.com/social-affairs/20140807/spacex-sued-for-laying-off-hundreds-of-workers-without-proper-notice

SpaceX is going to have a hard time winning this one. They will need evidence that the terminated employees were previously made aware of sub par performance. Firm wide restructuring or losing the least performing 5% out of the blue is layoffs, any way you want to spin it.

They are a young company growing rapidly. Hopefully they take steps to prevent this from happening again.

Sounds like something SpaceX would want to settle out of court.

[AJW]

The WARN rules are very specific and I have seen companies avoid issues by skirting under the numbers by one or two employees, or by staggering the terminations to avoid hitting the 50-employee in 30 day limit.  Employees are also only counted if they have been employed over 6 months, so to determine a violation, you need records that are only available to the employer.  While an individual can hire a lawyer and sue, without access to the corporate HR records, they are unlikely to have actual proof that a violation has occurred. 

WARN is easy to avoid with just a little planning, and I would like to believe that Elon would hire an experienced HR team.  Still, I have seen HR representatives even in large corporations blunder with terminations and violate the California Labor Code, resulting in significant payments to those affected.

[Antares]

Moderately sized ball drop by SpaceX Legal and HR.  Gotta know basic labor laws, even if SpaceX was just lopping off the bottom 5% like Intel and JPL do.

[Kabloona]

So they'll pay out for the back pay/wages and move on. Not much to see here except, as has been said, a somewhat surprising fumble, and rather puzzling given Elon's experience operating in California.

[Coastal Ron]

http://www.dailybreeze.com/social-affairs/20140807/spacex-sued-for-laying-off-hundreds-of-workers-without-proper-notice

SpaceX is going to have a hard time winning this one. They will need evidence that the terminated employees were previously made aware of sub par performance.

Performance reviews take care of the documentation part, and from what I can tell the fired employee has to make the case that they were not fired.

Firm wide restructuring or losing the least performing 5% out of the blue is layoffs, any way you want to spin it.

SpaceX stated publicly it was less than 5%, and the article in question states "200 to 400 factory workers" which works out to about 1% of their 3,000 employees.  That is hardly a "massive" number if it was a layoff, and that appears to be wording that the Cal WARN Act uses to trigger it's requirements.

They are a young company growing rapidly. Hopefully they take steps to prevent this from happening again.

You are assuming what they did was wrong as opposed to a statistical "bump" in the number of people coming up for internal review that were on shaky review ground.  My guess is that if we knew when the people affected were hired we would see that they came mainly from the same era of hiring, and that it reflects the challenges SpaceX had at the time filling certain positions.

Granted my views are colored by having spent most of my career in management having to deal with performance reviews, but two employees out of "200 to 400 factory workers" doesn't seem like it's a massive problem for SpaceX - more of a law firm taking a chance to see if they can get something out of SpaceX regardless of the merits of the situation.

[kirghizstan]

SpaceX stated publicly it was less than 5%, and the article in question states "200 to 400 factory workers" which works out to about 1% of their 3,000 employees. 

more like 6-13%

[wolfpack]

even if SpaceX was just lopping off the bottom 5% like Intel and JPL do.

Could also be just a classic headcount goof. They may have staffed for an assumed flight rate at this point in time and they're just not there yet.

JPL culls the bottom 5%? Hard to believe NASA and Caltech would operate like Jack Welch!

[Jim]

JPL culls the bottom 5%? Hard to believe NASA and Caltech would operate like Jack Welch!

NASA has no say in Caltech personnel actions.

[mme]

From Law360

Law360, Los Angeles (August 06, 2014, 4:35 PM ET) -- Space Exploration Technologies Corp. is facing a putative class action in California court accusing it of not properly notifying its former employees of a mass layoff of up to roughly 400 workers in the state, and not paying them wages earned before termination.

The proposed class action, filed Monday, alleged that SpaceX ordered the mass layoffs of between 200 and 400 workers on or about July 21 without giving advance notice to the them, in violation of California's Worker Adjustment and Retraining Notification Act.

Maybe SpaceX blew it, but I don't think anyone outside of HR knows the exact number of people let go.

Filing this case as a class action means that it doesn't cost the two ex-employees anything.  I'm not accusing them of anything, they probably believe that over 5% of the work force was laid off, but I doubt they know for sure.  For the lawyers, it's minimal work to file the case and fairly early in discovery it will either be a slam dunk or dismissed.

Everyone can be operating in good faith and they could still lose.

[GORDAP]

Wait, I thought SpaceX maintained that this was not a layoff - that these employees were terminated for poor performance.  If this is the case, doesn't it make WARN's applicability N/A (since it looks to be only triggered by mass layoffs).

I'd think a huge evidentiary point in SpaceX's favor is that they continue to be in the middle of a hiring boom (not something you'd find typically associated with layoffs).

[Kabloona]

Wait, I thought SpaceX maintained that this was not a layoff - that these employees were terminated for poor performance.  If this is the case, doesn't it make WARN's applicability N/A (since it looks to be only triggered by mass layoffs).

That seems to be the case.

http://www.spacenews.com/article/launch-report/41428spacex-says-“headcount-reduction”-due-to-annual-reviews-not-layoffs

[Jason Sole]

Correct, there were NO layoffs.

[wolfpack]

Wait, I thought SpaceX maintained that this was not a layoff - that these employees were terminated for poor performance.  If this is the case, doesn't it make WARN's applicability N/A (since it looks to be only triggered by mass layoffs).

That's the tough part. Most companies are loathe to terminate with cause, because it requires a lot of paperwork to back it up in case of legal challenges.

[BobCarver]

Elon should just pack up and move SpaceX to Texas where employees know they have to perform or get sacked. He already has one branch in McGregor and one coming soon in Brownsville. How about one more in Austin to consolidate offices?

[docmordrid]

AIUI SpaceX is committed to Hawthorne until 2022/2023. Tax abatements, main building lease etc.

[brokndodge]

Elon should just pack up and move SpaceX to Texas where employees know they have to perform or get sacked. He already has one branch in McGregor and one coming soon in Brownsville. How about one more in Austin to consolidate offices?

CA has a lot of congressional votes too.  A few million in a lawsuit here and there is chump change compared to the votes in congress.

[mjcrsmith]

Working in a large corporation, RIF's happen.  It is common place.  It is never pleasant.  It is never easy.  Some will take the job loss and do nothing.  Some will feel they were wrongfully let go and seek out council. 

None of this is news and definitely not limited to SpaceX. 

Unfortuneately in our litigious society, corporations view this as a cost of doing buisness.  And, no doubt, will have an insurace policy to cover any settlements.

[Coastal Ron]

Wait, I thought SpaceX maintained that this was not a layoff - that these employees were terminated for poor performance.  If this is the case, doesn't it make WARN's applicability N/A (since it looks to be only triggered by mass layoffs).

That's the tough part. Most companies are loathe to terminate with cause, because it requires a lot of paperwork to back it up in case of legal challenges.

Musk appreciates good software solutions, so no doubt they are using a modern Human Resources Management System (HRMS), which makes it far easier for HR to monitor the progress of employees who have been put on notice for their performance.

For companies that like to follow procedures - and I think SpaceX has shown that with the success of their rockets - the termination process is just another procedure to follow in the life of a manager.  Not to say it's not without emotion, since no one likes firing someone that they hire, but for me at least I never let the paperwork process stop me from addressing employee issues.

My guess is that the law firm suing them is just doing it for exposure, not because it's an open and shut case.  Time will tell...