
SpaceX Slapped With Wage Class Action Over Mass Layoff - ericras
http://www.law360.com/articles/564591/spacex-slapped-with-wage-class-action-over-mass-layoff
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TrainedMonkey
Here is link that goes through Google and bypasses paywall:
[http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd...](http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CB8QFjAA&url=http%3A%2F%2Fwww.law360.com%2Farticles%2F564591%2Fspacex-
slapped-with-wage-class-action-over-mass-layoff)

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avz
(Only tangentially related) If you're a space exploration nerd working in the
space industry you'll realize one day that your salary and benefits are space
exploration costs. This produces the following dilemma:

Accept a small pay and benefits. Space exploration costs go down. More space
exploration is done per dollar.

Demand a good salary and benefits. Space exploration costs go up. Less space
exploration gets done per dollar.

Damn it.

~~~
AndrewKemendo
The ROI on space exploration (currently) is terrible and the only tangible
near term solution to that dilemma is asteroid harvesting. That is why SpaceX
is predominantly about getting government contracts - outside of satellites
(GEO and down) there isn't much economic incentive for humanity.

Look, manned spaceflight is cool and there are some really bad ass ideas about
space exploration, but the reality is that there really isn't that much in it
for us. Our bodies are fundamentally not suited for space travel - so much so
that the bulk of on-board systems are life support, making anything else a
small portion.

What are the goals anyway? I have heard many things like: having a second
habitable home for humanity in case (X) happens, or exploration for its own
sake. None of these are particularly compelling given the economics behind
them.

I certainly wouldn't pass up the chance to go to space, but I think it is not
where humanity should be putting its energy.

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avz
> ...second habitable home for humanity [...] or exploration for its own sake.
> None of these are particularly compelling given the economics behind them.

So this is what economics has done to "going boldly"? No wonder it's called
dismal science ;-)

But seriously, diversification of our real estate beyond a single small planet
seems like a necessity given the scale of the potential losses in case (X)
happens.

Exploration for its own sake seems like a perfectly valid reason too whether
done for touristic or scientific purposes.

As for ROI on space exploration, I wouldn't say it's terrible. It's just that
we're short lived creatures and we like our returns fast. Space exploration is
a very long term investment with potentially huge returns in far future.

~~~
AndrewKemendo
>So this is what economics has done to "going boldly"? No wonder it's called
dismal science ;-)

Yes the economist is typically the buzzkill.

To your other point, I think it is silly to think that it would take fewer
resources and time to terraform another planet^, than it would be to harden
ourselves from disaster. Strike that it's not silly, it's wasteful.

^there are no known planets that are habitable to humans and getting out of
our solar system is not feasible for humans given that it is 27,000 ly across

~~~
avz
You don't need to terraform a planet in order to inhabit it. Also, not all
disasters are easily managed or predicted. Hypothetical virus with long
incubation period that spreads quietly to almost every human on Earth before
giving any symptoms could pose a huge danger. There are other scenarios where
survival of civilization is doubtful or reconstruction is very difficult
without off-world help. Given high stakes directing 1% of human energy into
the long term goal of expanding our habitat beyond a single planet seems like
a reasonable hedge.

Not sure where the figure of 27kly comes from. Depending on how you measure it
our solar system is ~200 AU or ~28 light hours across (for comparison 1 ly is
~63241 AU). Our galaxy is ~100kly across and it contains hundreds of billions
of stars.

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bnejad
Seems like a clear wrong doing on SpaceX's side... Weird SpaceX would lay
people off when by all accounts their business is doing fairly well?

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TheHypnotist
According to this article ( [http://www.spacenews.com/article/launch-
report/41428spacex-s...](http://www.spacenews.com/article/launch-
report/41428spacex-says-%E2%80%9Cheadcount-reduction%E2%80%9D-due-to-annual-
reviews-not-layoffs) ) they were firings, not layoffs. Which may throw a
wrench in their lawsuit.

~~~
georgemcbay
IANAL, but I don't think this is going to fly in court given that (4 times)
more than 50 people were let go at once. If it looks like a layoff and quacks
like a layoff, I don't think the judge or a jury is going to care what SpaceX
calls it.

Kind of surprised a company that is so on the ball technically would fuck
something like this up; it is definitely going to end up costing them way more
than 2 months severance to everyone (plus whatever they were owed -- some
people claim they didn't even get that) would have.

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gpm
In this case I think it might, I'm not a lawyer, but the relevant law seems to
be this one ([http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=lab&gr...](http://www.leginfo.ca.gov/cgi-
bin/displaycode?section=lab&group=01001-02000&file=1400-1408)), which defines
layoff as

> "Layoff" means a separation from a position for lack of funds or lack of
> work.

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sokoloff
US Dept of Labor and the Federal WARN Act have specific requirements for
employers over 100 employees where 50 or more are let go from a single
location in a 30-day period:
[http://www.dol.gov/compliance/guide/layoffs.htm](http://www.dol.gov/compliance/guide/layoffs.htm)

Doesn't matter if they're layoffs for lack of work or performance-based
firings: you still have to comply with the provisions of that law.

(I have no knowledge whether SpaceX did or did not comply, of course.)

~~~
gpm
The article says that the suit is about a alleged "violation of California's
Worker Adjustment and Retraining Notification Act.", and "The Cal WARN Act",
not the Federal WARN Act.

I have no knowledge of this lawsuit other then this article though.

~~~
hga
The " _not paying them wages earned before termination_ " would be a matter of
state law, and with California having its own WARN Act, I presume the lawyers
think it's best to sue in state court.

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bellerocky
Do the affected employees know they're in a bad state? Would be courtesy to
let them in on their low performance so that they can make a job change before
they are "terminated with cause" as that never looks good for future
employment. Are they put on a performance improvement plan? It sounds pretty
fucked up.

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ChuckMcM
Two comments: First when any 'vulnerable' company does anything at all out of
the ordinary you can see this. SpaceX is vulnerable because they trade on
their reputation. Legal extortion is not all that uncommon so it is not
necessarily true that the lawyers think they can win, but they may feel they
can get a settlement of some sort. Perhaps one of the lawyers in the gallery
will chime in.

Second, the laws apply differently in different states. California is an 'at
will' state which means you really can be tossed for any non-protected reason
at any time (not true if you have a labor contract). But SpaceX employs people
in Texas and Florida as well.

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FD3SA
Does anyone know why this layoff occurred? Was it a case of their designs
maturing, and thus SpaceX no longer needing the large R&D staff they
previously did?

Quite curious, as they seem to be doing very well. Musk has capitalized on the
Ukraine/Russian ordeal quite well, and is positioned to become a dominant
force in the US Aerospace industry. Wouldn't have thought he'd be the type to
let go of productive employees on a whim. He understands better than most that
talent is the only resource companies have in the long run.

~~~
krschultz
_The loss of up to 200 jobs at Space Exploration Technologies Corp. is due to
firing of “low performer” employees as part of its annual review process, and
not layoffs, the company’s president said July 26._ [1]

That sounds like trying to dodge officially having a layoff, or pretty shitty
company culture. I wonder what other SpaceX employees think of the matter. I
didn't see much news about it.

[1] [http://www.spacenews.com/article/launch-
report/41428spacex-s...](http://www.spacenews.com/article/launch-
report/41428spacex-says-%E2%80%9Cheadcount-reduction%E2%80%9D-due-to-annual-
reviews-not-layoffs)

~~~
bostonvaulter2
Is there something inherently wrong with firing "low performers" rather than
laying them off?

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krschultz
Well, generally speaking "firing" reduces the amount of unemployment insurance
you get, while a layoff gets you the full amount. So an employer that shrouds
a layoff in a firing is screwing the employee twice.

I generally think that the employer should have a very high bar on proving
that it was performance based when you are laying off significant % of the
workforce at one time. Every time I was involved in an employee firing, it
happened out of phase with the typical performance review cycle, and it was
typically one person at a time.

~~~
seanflyon
> "firing" reduces the amount of unemployment insurance you get

Could you describe how this works? Do you get unemployment for a longer period
of time or larger payments if you were laid off?

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ranran876
severance pay is given out for layoffs and not firings. It always seemed like
a weird system to me b/c if you're laying people off, you're probably already
strapped for cash - so you'd try to find an excuse to fire the person.

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FireBeyond
Yes and no... if your fiscal management is that shoddy that severance is a
problem, you're beyond screwed as a company. The idea is that "Well, we're
running down our funds, best to get these people out the door now with x
month's salary, rather than hope something turns around in x+y months."

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snitko
SpaceX doesn't owe anything to you unless it signed a contract that says it
has to employ you for this amount of time. I don't understand neither laws,
nor the people who would foster such lawsuits. That's using government to
steal someone else's money because _you feel_ it's unfair that they laid you
off.

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dragonwriter
> SpaceX doesn't owe anything to you unless it signed a contract that says it
> has to employ you for this amount of time. I don't understand neither laws,
> nor the people who would foster such lawsuits.

If they agreed to employ you in a state, they agreed to do so under the laws
of the state. Even if you don't understand the laws, you should be able to
understand that the existence of laws providing various protections is part of
the context in which people agree to accept employment from a particular
employer, in a particular place, and under particular payment terms.

Employers certainly consider the legal environment when they choose to employ
people in a particular location, and when they decide on the terms of
employment.

~~~
snitko
I was trying to argue from a moral point of view. The existence of state,
which itself is an immoral institution, doesn't justify the absurdity of the
idea to demand being employed.

~~~
dragonwriter
> I was trying to argue from a moral point of view.

One might argue that it is moral (if not legal) for parties to by mutual
consent expressly agree to conduct an economic exchange under terms other than
those set by the law of the jurisdiction in which the exchange is conducted
(even if the law prohibits such waivers and alternations), but I think its a
much harder case to make that it is generally moral for one party in arms-
length exchange where no such waiver is expressed to simply elect to ignore
the governing law, except when one makes the case that what the law demands
would be immoral _even as a term agreed to by consent_ , or that the change in
the law which occurred after the agreement violated the fundamental premises
on which the agreement was based (and even in the last case, only if the the
party acted timely to notify the other party of their objection and to either
terminate or renegotiate the relationship based on the changed context.)

~~~
snitko
Of course I don't suggest SpaceX ignores the law. That would put them in a lot
of trouble. What I'm saying is, people should stop and think for a moment:
wait a minute, why do we have this monopoly on law which many people exploit
and why can't we allow people to freely sign employment contracts with the
terms defined in advance?

If, for example, 100% of people who SpaceX could hire would express concern
over a possible layoff, then SpaceX would have no choice, but to put this into
the contract, specifying potential payouts in the case of such a layoff.
However, I think people would actually compete to get into SpaceX, thus the
actual terms of the contract wouldn't include that. In short, let the market
decide voluntarily, what are the best terms.

What's going on now is one side (employees) taking advantage of the other
side. I don't care how rich Elon Musk is. If he made his money honestly, he
doesn't owe a cent to those employees.

~~~
dragonwriter
> What's going on now is one side (employees) taking advantage of the other
> side.

No, its not. Both sides voluntarily entered into an agreement with knowledge
of the legal context (well, at least constructive knowledge -- in terms of
actual knowledge, there _is_ a real imbalance, here, but it almost always
favors the employer, as the side who is more likely to both motivated and able
to secure expert assistance prior to making decisions whether, where, and on
what terms to engage in employment agreements.)

> I don't care how rich Elon Musk is. If he made his money honestly, he
> doesn't owe a cent to those employees.

To the extent that SpaceX makes money by not treating people according to the
law under which they agreed to employment, the money is not made honestly, so
even if I accepted your maxim, it would be irrelevant.

