Tesla must face lawsuit alleging it replaced laid-off US workers with H-1B visa holders

A federal judge has ruled that Tesla must face a class-action lawsuit alleging the automaker systematically discriminated against American workers by preferring H-1B visa holders for engineering positions, even as it laid off more than 6,000 US employees in 2024.

U.S. District Judge Vince Chhabria said the plaintiff had offered “just enough facts” for the case to proceed, though he expressed skepticism about the strength of the claims.

The ruling

Software engineer Scott Taub filed the proposed class action in September 2025, alleging Tesla passed him over for an engineering job as part of a broader “systematic preference” to hire foreign visa holders in violation of federal civil rights law. Taub claims a recruiter for a staffing company told him the engineering position he sought was “H-1B only.”

Judge Chhabria, in a brief order issued late Monday, allowed Taub’s claims to move forward. The lawsuit alleges that Tesla hired an estimated 1,355 H-1B visa holders in 2024 while laying off more than 6,000 workers domestically, with the vast majority of those let go believed to be U.S. citizens.

The judge did dismiss claims from a second plaintiff, human resources specialist Sofia Brander, saying it was “implausible” that Tesla prefers to hire foreign workers for HR positions. He gave Brander two weeks to file an amended complaint.

Tesla has denied the claims and called them “preposterous” in court filings.

The H-1B controversy at Tesla

This lawsuit adds legal teeth to a controversy that has been building for over a year. As we reported in December 2024, Tesla replaced laid-off US workers with foreign workers using H-1B visas — a fact backed by US Department of Labor data showing Tesla requested over 2,000 H-1B visas during the same period it was conducting mass layoffs. With an annual cap of 65,000 H-1B visas for the entire country, Tesla alone tried to secure over 3% of them.

The judge acknowledged that the statistics from 2024 “merely show that Tesla hired a substantial number of H-1B holders that year, but not that it preferred them over U.S. citizens.” He wrote that “all of this causes the Court to be somewhat skeptical of Taub’s allegations”, but not skeptical enough to dismiss the case outright.

The recruiter’s alleged “H-1B only” comment was the key factor in keeping the case alive. If true, it represents direct evidence of the kind of discrimination the lawsuit alleges.

The Musk H-1B contradiction

The timing of this lawsuit is particularly awkward for Elon Musk. In late 2024, when the H-1B debate erupted within MAGA circles, Musk wrote that he would “go to war on this issue the likes of which you cannot possibly comprehend”, firmly positioning himself as a defender of the visa program. Musk claimed to have himself come to the US on an H-1B visa before becoming a citizen, which is false. He came in as a student and then illegally stayed in the country to launch his first startup, according to his own brother, Kimball Musk, an Epstein-connected Tesla board member.

But when President Trump imposed an unprecedented $100,000 fee on new H-1B visa applications in September 2025, a move that directly targeted the kind of large-scale visa use Tesla engages in, Musk went silent. He was photographed smiling beside Trump at a funeral event shortly after.

By December 2025, Musk had softened his position, conceding the system was “broken” and suggesting higher salary thresholds. The problem for Tesla is that a lawsuit now alleges the company exploited the very program Musk publicly championed, laying off American workers and replacing them with visa holders who have less leverage to negotiate pay or push back on working conditions.

Electrek’s Take

We broke the story in late 2024 that Tesla was replacing laid-off US workers with H-1B visa holders, and now a federal judge has allowed a class action based on those same allegations to move forward. That’s significant, even if the judge is skeptical.

The core problem here is straightforward: Tesla laid off thousands of US workers in 2024 while simultaneously requesting more than 2,000 H-1B visas. The company says these are unrelated, different roles, different skill sets. The plaintiff says it’s a deliberate strategy to replace American workers with foreign workers who are essentially tied to their employer and less likely to demand better pay or conditions.

The judge is right that the statistics alone don’t prove discrimination. But the alleged “H-1B only” recruiter comment is the kind of direct evidence that can move a case from speculative to serious. If Tesla’s hiring pipeline was explicitly filtering out American applicants, that’s not an aspirational goal that fell short, that’s a policy.

In our own reporting at the time, we did note that Tesla was not directly replacing role for role, but it might as well have. It was firing senior staff and filing the responsability with different junior roles, including those from H-1B workers.