Spirit Airlines Told Workers To Ignore Shutdown Rumors — Now They’re Suing For 60 Days Pay
There’s a new proposed class action lawsuit on behalf of Spirit Airlines workers, filed on Tuesday, arguing that the airline terminated nearly its entire workforce on May 2 without the required 60 days written notice required by the WARN Act.
Employees were told on May 2 that it would be their last day, and the suit alleges everyone was given misleading assurances before the layoff. Just two weeks earlier Spirit had been claiming it planned to continue operating and to ignore rumors that it was near ceasing operations. There were even positive statements “in the hours immediately prior” to the shutdown announcement. So the suit seeks 60 days of wages, accrued vacation pay, retirement contributions, and benefits.
- There are WARN Act exceptions that allow reduced notice, although the employer has to still give as much notice as practicable and a brief statement for why the period was shortened.
- Spirit’s WARN letter does lay out their reason for late notice – they were actively seeking new capital, they had an agreement with debtor-in-possession lenders from March, and they were in discussions with the Trump administration about a taxpayer bailout – which did not collapse until the last minute. And they continue to blame the spike in fuel prices for their lack of a viable business plan.
- The exception for ‘unforeseeable business circumstances’ is what will be litigated. Spirit was in its second Chapter 11. There was an expectation it would shut down since at least December before the spike in fuel prices. The airline chose blind optimism and secrecy over giving conditional notice when it said two weeks before shutdown to ignore the rumors.
- Spirit’s argument becomes that a notice would have made financing impossible, and they had a realistic opportunity to obtain it. Did Spirit notify workers as soon as it knew the path to funding had failed? And they’ll argue fuel prices are what did them in, and it wasn’t clear what would happen with the direction of prices. Spirit will also argue to break down operations into different locations, some of which would be too small to be covered by the WARN Act and thus reduce the size of any class.
The President talking up a (likely illegal) taxpayer bailout and then failing to deliver it is the strongest reason why workers were not entitled to WARN Act notice of their impending layoff.
It seems like $200 million to $250 million as an order of magnitude in worker pay that could be at issue. Spirit’s 2025 annual report shows $1.44 billion of salaries, wages, and benefits and 60 days of that is ~ $237 million.
And a claim here would generally sit alongside ordinary administration expenses and above equity and unsecured claims, but below secured claims, debtor-in-possession claims, and carve-outs under the debtor-in-possession order like taxes.
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