finance
Spirit Airlines Shuts Down Operations After Failed Rescue Deal, Faces WARN Act Lawsuit
Former employees filed suit in New York on May 12 seeking 60 days of wages and benefits under the WARN Act after the carrier ceased operations on May 2 without advance warning. Spirit reduced its workforce by roughly 17,000 and cited stalled federal rescue talks and rising oil prices. Many workers have yet to receive final paychecks or compensation for accrued vacation and sick time.
May 14, 1:41 PM·2m read2 sources
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Spirit Airlines is confronting a proposed class-action lawsuit after the low-cost carrier announced earlier this month that it would cease operations permanently. The lawsuit was filed May 12 in the Southern District of New York on behalf of former Spirit Airlines employees.
It accuses the airline of violating federal labor law by shutting down without the advance notice required for mass layoffs.
Spirit Airlines shut down operations on May 2. The carrier ceased operations and informed employees the same day via an email from company leadership. Workers immediately lost their jobs, benefits, and access to company systems on May 2.
The email told employees the company was unable to give more advance notice of the layoffs because the Company was actively seeking capital to avoid these layoffs and closures and notice would have precluded the Company from obtaining the capital needed.
Spirit Airlines announced on May 2 that it had begun an orderly wind-down of our operations, effective immediately. The announcement came after negotiations with the federal government to secure a $500 million rescue deal stalled.
Spirit Airlines cited a material increase in oil prices and other pressures on the business that had impacted Spirit’s financial outlook. The carrier had hoped to serve our Guests for many years to come after 33 years of operation. A message on the Spirit website stated that all flights have been cancelled, and customer service is no longer available.
