Nscale sued in Norway over a data centre engineer’s dismissal

An engineer at Nscale’s Stavanger data centre has sued the AI cloud firm and subcontractor CloudBrothers, Bloomberg reported. He claims Nscale directed his work like an employer and that he was fired after raising pay concerns. The case comes as Nscale prepares a contested IPO.

An engineer at Nscale’s data centre in Stavanger, Norway, has sued the British AI cloud company, claiming he was wrongly fired and hired through an illegal subcontracting setup, Bloomberg reported. The suit, backed by local trade unions, was filed on 16 October.

The engineer was employed through CloudBrothers, a subcontractor that is also named in the suit. He claims Nscale directed his daily work and shifts, which under Norwegian law would make it his real employer.

Norway allows subcontracting, but the subcontractor must manage its workers itself. If the client company treats them as its own staff, it must pay and treat them as full employees.

The engineer says he was fired in June after he pushed back on a CloudBrothers warning that staff who filed holiday requests late would lose two weeks of holiday pay. He replied to the whole team, according to the complaint:

“You cannot deduct our worked salary.”

He says he then contacted Norway’s labour inspection authority, and that CloudBrothers fired him in retaliation. CloudBrothers told him he was dismissed for repeated breaches of confidentiality, according to the filing. He is seeking compensation and a ruling that he should have been an Nscale employee.

Nscale and CloudBrothers did not immediately respond to Bloomberg’s requests for comment. Nscale had earlier told Bloomberg it cut ties in Stavanger with Technimove, the contractor that brought in workers through CloudBrothers.

The case comes as Nscale races to build data centres for more than $100B in contracts, most not yet earned, ahead of a New York stock market listing. Its flagship site in Glomfjord, Norway, is about six months late after cooling leaks and a fire, Bloomberg has reported.

Some investors have said Nscale’s target valuation of about $30B is too high, and Microsoft reportedly pulled out of its planned UK data centre this month. This week, Korea’s Elice fell 32% in its stock market debut as investors sold off firms that rent out AI computing power.