Elon Musk has had some rough times in court lately.
First, two former employees file lawsuit against Tesla (Tesla) – Get Tesla Inc report CEO and world’s richest man, then U.S. Supreme Court rejects ex-Xerox challenge (XRX) – Get the Xerox Holdings Corporation report Musk-backed executives.
‘Destructive economic impact’
Former employees said they were fired amid mass layoffs at the electric car maker’s Gigafactory in Sparks, Nevada.
They allege the company failed to comply with federal laws on mass layoffs that require 60 days under the Worker Adjustment and Retraining Notification Act (WARN), according to a lawsuit filed in U.S. District Court in Austin, Texas. notice period. Home of Tesla’s headquarters.
The lawsuit was filed by John Lynch and Daxton Hartsfield, who were fired on June 10 and June 15, respectively. More than 500 workers at the Sparks factory were fired, the complaint said.
“Tesla failed to give plaintiffs and class members prior written notice of any termination of the contract,” the complaint states. “Instead, Tesla simply notified employees that their termination would be effective immediately. Tesla also failed to provide a rationale for reducing the notice period to zero days’ advance notice.”
Plaintiffs are seeking compensation and benefits within a 60-day notice period.
“Tesla’s failure to provide its employees with any advance written notice has devastating economic consequences for plaintiffs and class members,” the complaint states.
Musk described the case as a “preemptive lawsuit without standing.”
‘A lot of clicks’
“It seems like anything Tesla-related is going to get a lot of hits, be it trivial or significant,” Musk told the Qatar Economic Forum, according to Reuters. “I would attribute that lawsuit you mentioned. into trivial categories.”
Speaking at the same event organized by Bloomberg, Musk said Tesla would reduce its salaried workforce by 10% over the next three months while increasing the number of hourly workers.
The announcement will affect about 3.5% of Tesla’s overall workforce. The actual amount “is not a supermaterial,” Musk said.
Earlier this month, Musk said he had a “super bad” feeling about the global economy.
Separately, the Supreme Court declined to hear former Xerox Chief Financial Officer Barry Romeril’s appeal to a lower court over SEC rules that require people who agree to settle with the agency not to deny their allegations against them.
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Under the rules, Romerlier agreed not to deny accounting fraud charges he settled with the Securities and Exchange Commission in 2003, Reuters reported.
The lower court ruled that the rule did not violate the U.S. Constitution’s First Amendment right to free speech.
no one can deny
“Allowing the government to determine what it sees as its actions is anathema to the First Amendment,” Romerlier argued in a May 27 petition to the Supreme Court. “The SEC’s role in enforcing a non-denial policy The only expressed interest is to avoid giving the impression that the SEC allegations are not supported in any way.”
The “non-denial clause” allows individuals suspected of violating federal securities laws to settle civil lawsuits with the SEC without admitting or denying wrongdoing, but requires those individuals to agree not to publicly deny the SEC’s allegations against them.
“Corporate executives, constitutional scholars, activists and even members of the judiciary have raised concerns about the First Amendment, but so far no Any challenge succeeds.”
In 2003, the SEC charged Romeril and five other former Xerox employees with securities fraud and other violations of federal securities laws.
The SEC said the executives were involved in a scheme between 1997 and 2000 that misled investors about Xerox’s earnings to “enhance its reputation on Wall Street and boost the company’s stock price.”
$420 in Tweets
In April 2002, Xerox paid a $10 million civil penalty without admitting or denying the SEC’s allegations, agreed to restate its financial statements and said it would retain a consultant to review the company’s internal accounting controls and policies.
Musk, who wants to end his 2018 settlement with the Securities and Exchange Commission, signed a legal brief in support of Romeril.
The case stemmed from Musk’s Aug. 7, 2018 tweet, in which he said he was considering taking Tesla private at $420 a share with “funding security.”
Musk was ordered to pay a $20 million fine, resign as chairman for three years, and agreed not to deny the SEC’s allegations.
A federal judge rejected Musk’s proposal to terminate his SEC agreement and rejected his motion to quash a new SEC subpoena.
U.S. District Judge Lewis Liman cited the Romeril case in his April 27 ruling, saying that “Equally unfounded is Musk’s arguments that the SEC used a consent order to harass him and investigate his remarks, especially in this case. Ironic.”
“Musk can’t now seek to roll back an agreement he made intentionally and willingly by simply bemoaning what he felt at the time he had to agree to, but now — once the specter of the lawsuit is a distant memory, his company has become his estimate almost Invincible – wish he wasn’t,” Leeman wrote.