Space Exploration Technologies (SpaceX) faces lawsuits from some of the hundreds of workers it “laid off” from its main plant in Hawthorne, California, at the end of July. In fact, the definition of “laid off” is at the heart of the argument for one of the class action lawsuits under Californian law. That is, under Californian law a person is defined as being “laid off” if they have lost their job for the economic reasons: “lack of funds or lack of work”. If this is the case then a 60-day notice period has to be given before an employee can be laid off in this way which SpaceX is accused of not doing.
As was previously reported, SpaceX’s official line was that nearly 5% of SpaceX’s workforce were fired due to “poor performance” rather than for economic reasons and, as such, this notice did not need to be given. It has been alleged by some sources that SpaceX’s cash flow position meant that near-term savings needed to be made and that this was the real reason for the “lay offs”.
Comment by David Todd: Rather than a quibble about employment procedure or severance pay, a “face saving” correction of their employment record might be the real reason for this class action lawsuit by former SpaceX workers. Whether these SpaceX workers were fired for “poor performance” or not, either way, instead of firing them, SpaceX would have been better served by declaring these workers as economically redundant and then laying them off using the correct procedure.
Although it is a slightly disingenuous approach which might hinder SpaceX’s financial reputation in the short term, the reason why many firms never actually “fire” even incompetent employees is that there is usually more honour and goodwill to be had by all sides in having the said leaving workers being declared as “economically laid off/redundant”. For while being declared “redundant” should not hinder the departing worker’s attempts to find new work, being declared as being “fired for poor performance” will. And correcting this might be the real motivation in the plaintiffs’ minds in this instance.
This column reminds its readers again: “Be careful how you fire and be careful who you fire.”
