The Plot Thickens for Fisker – Gets Hit with Federal Lawsuit

After losing its driving force, Henrik Fisker, and 75 percent of its employees, Fisker Automotive takes another blow. The fired workers are accusing the automaker of not having notified them in advance, and are calling the company’s action illegal, bringing about a federal lawsuit. Their motivation for pursuing the legal way also probably stems from the fact that aside from being paid for their unused days off, there wasn’t a severance package in sight.

What Fisker is being charged with is, breaking rules set by both the federal WARN Act and California’s own WARN Act (Worker Adjustment and Retraining Notification). The law states that employees need to be notified of impending contract terminations at least 60 days before it actually happens, so as to make the necessary arrangements and not be caught off-guard.

The company is also required to pay compensation to each and every former employee, which would equate to their total earnings for an additional 60 days after leaving (wages plus benefits).

Also, aside from the 60 days’ compensation, the ex-employees may get extra cash, as Fisker is now liable to pay a $500 penalty for each day it fails to comply.

Further accusations say that the makers of the Karma plug-in hybrid also failed to comply with California labor laws, as further notifications of the imminent layoffs would have had to be made elsewhere – the local workforce investment board and the top elected officials in Anaheim and Orange County.

The pressure on Fisker is even higher, though, as they are looking to become compliant with requirements set by the Department of Energy (DoE), in order to get a loan payment of around $10 million, due on April 22.

According to DoE spokeswoman, Aoife McCarthy: “The Department of Energy stopped payment on the federal loan (of $549 million) in 2011 after Fisker stopped meeting their milestones, and is committed to the best outcome for taxpayers [. . .] Despite Fisker’s difficulties, our overall loan portfolio of more than 30 projects continues to perform very well, and more than 90 percent of the $10 billion loan loss reserve that Congress set aside for these programs remains intact.”

By Andrei Nedelea

Story References: Reuters

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