SpaceX Sued Under Warn Act for Up to 400 Layoffs

In a stunning development just 48 hours after Breitbart California published “Elon Musk Plays California for Tax Breaks, Then Moves SpaceX Operations to Texas,” employees at Space Exploration Technologies Corporation (SpaceX) headquarters in Hawthorne, California filed a lawsuit claiming the rocket builder on or about July 21st violated California Labor Law by laying off up to 400 factory workers, or about 11% of the entire company workforce. The employees claim that SpaceX failed to give proper notice under law and are seeking class action status and damages.

The law firm of Feldman Browne & Olivares filed the suit representing former SpaceX technicians Bobby Lee and Bron Gatling under both under California’s Worker Adjustment and Retraining Notification Law (WARN ACT) and California’s Unfair Competition Law. The lawsuit seeks class action status and damages for back pay, wages, injunctive relief, restitution, and civil penalties for illegal mass layoffs of 200 to 400 factory workers on or about July 21st.

According to the Daily Breeze local newspaper, attorney for the plaintiffs Leonard Sansanowicz said, “The [WARN] notice is designed to provide the employees with the opportunity to get training in another field or to look for another job.” He added, “This is more of an issue with smaller communities, but even here the effects of laying off 400 people in one day is not minimal.”

The WARN ACT requires every California industrial or commercial establishment that employed 75 or more people in the last 12 months “may not order a mass layoff [defined as 50 or more employees in a 30 day period], relocation, or termination at a covered establishment unless, 60 days before the order takes effect” the employer gives written notice of the order to the employees, California “Employment Development Department, the local workforce investment board, and the chief elected official of each city and county government within which the termination, relocation, or mass layoff occurs.”

Given the late breaking story of the lawsuit on Friday afternoon, no Hawthorne or Los Angeles County elected official was available for comment. But the size of the layoffs is sure to infuriate and humiliate the local and state politicians, along with the vendor community who just lobbied the California State Legislature and Senate in April to pass AB 777 as a special purpose bill to save SpaceX millions of dollars in property taxes. 

After the normally tax-averse Wall Street Journal blasted the bill and Elon Musk’s clout, Democrat Assemblyman Al Muratsuchi of Torrance wrote an op-ed vigorously supporting the legislation because “Private companies like Space X are building rocket ships and creating thousands of good paying manufacturing jobs right here in Southern California. We want these companies to invest and grow in our state.”  

The layoffs came after an annual review cycle that included “some rebalancing of resources,” SpaceX spokesman John Taylor said in an email to the Daily Breeze just before the lawsuit was filed. “Our resulting head-count reduction was less than 5 percent,” Taylor added. “SpaceX expects to see net positive employee growth in 2014 of approximately 20 percent.”

President Gwynne Shotwell said the total number of employees at SpaceX in October of last year was 3,800, but the company’s website now says they only have 3,000+ employees.  

Breitbart has learned that at the NewSpace 2014 conference on July 26th, Shotwell said, “We did our annual performance review, there were some low performers, and we terminated them.” She said she didn’t know how many employees were fired, but noted that in past performance reviews, the figure was around 3% of the company’s workforce. But “some” 3% of 3,000 employees would have been only about 90 terminations.

It is unclear how many of the employees at the supposedly engineering-driven company might work in the factory, but it seems doubtful that over half would have such a designation. Consequently, SpaceX firing of 200 to 400 “factory workers” at Hawthorne could be a large percentage of their blue collar workers.  

Governor Rick Perry was all smiles last week when he announced $100 million in state of Texas support for SpaceX to build the world's first private commercial rocket launch facility on an isolated beach near Brownsville, Texas. Knowing that SpaceX was shrinking in California and growing in Texas probably gave him something extra to smile about.  

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