While SpaceX has gotten plenty of media attention for its lawsuit against the US Air Force regarding the “block buy” contract for Evolved Expendable Launch Vehicle (EELV) missions with United Launch Alliance, the company is also on the receiving end of lawsuits. Last week, the company was named as the defendant in two separate suits from former employees, alleging the company has violated different aspects of state and federal labor laws.
On August 4, two former employees filed suit, claiming they and up to 400 others were laid off from SpaceX’s Hawthorne, California, headquarters without proper notification. In the suit, plaintiffs Bobby R. Lee and Bron Gatling said they were terminated as part of a “mass layoff” by SpaceX on or around July 21. They and others—the suit estimates that between 200 and 400 employees were laid off—were not given advance notice, as required under state and federal law.
Under California’s Worker Adjustment and Retraining Notification (WARN) Act, a stricter version of similar federal law, employers must give 60 days’ advance notice of any “plant closing, layoff or relocation of 50 or more employees within a 30-day period,” regardless of the overall number of employees. SpaceX did not file a WARN notice with the state.
The case may come down to whether the affected employees were indeed “laid off” or “fired,” that is, terminated for cause. The federal WARN status makes clear that termination for cause is not included in employment losses that require a notification and advance notice, although California law is more vague, defining a layoff as “a separation from a position for lack of funds or lack of work.”
SpaceX has made it clear that it considers the separated employees fired, not laid off. The company said the “headcount reduction” came after an annual review, with the company firing low-performing employees. “We did our annual performance review, there were some low performers, and we terminated them,” said company president Gwynne Shotwell in a brief interview at the NewSpace 2014 conference in San Jose last month. SpaceX also said the reduction was “less than 5%” of the company’s overall workforce, which would put the total number of terminated employees at no more than 200, not the 200-400 that the suit claims.
A second suit by a former SpaceX employee claims that the company is violating labor laws by not giving workers breaks as required by California law. In the suit filed with the LA Superior Court on August 8, former employee Joseph A. Smith alleges that the company’s hourly employees “were consistently required to work in excess of four hours without be provided proper ten minute rest periods” as required by state law, according to a copy of the suit obtained by this publication. The company also denied a 30-minute meal period for shifts longer than five hours, and a second such period for shifts in excess of ten hours. SpaceX also required hourly employees to “work ‘off the clock’ and without pay by rounding time entries.”
As with the termination lawsuit, this suit seeks class action status to cover all affected employees. The suit doesn’t provide a firm estimate of how many that would include beyond that it’s in excess of 100 people. The suit seeks a variety of compensation for pay due to those in the affected class, including interest on back pay and attorneys’ fees. However, the suit notes that the “aggregate potential damages and recovery” sought is believed to be less than $5 million.