Ex-Spirit Airlines Workers Bring Class Suit Over Abrupt Layoffs

Former Spirit Aviation Holdings Inc. employees lodged a proposed class action saying that the grounded discount airline improperly laid off thousands of workers without adequate warning—even as it pitched bonuses for three top executives.

Six laid-off Spirit employees are seeking to represent a class of about 17,000 people whose jobs were terminated in violation of the federal Worker Adjustment and Retraining Notification Act, they said in a Tuesday complaint in the US Bankruptcy Court for the Southern District of New York.

The six employees include a compliance specialist, software engineer, and flight attendant.

Spirit failed to provide 60 days notice of terminations as required by the WARN Act, the complaint said. While senior management gave assurances of the airline’s viability as recently as April 16, they suddenly terminated nearly the entire workforce via email on May 2. Employees were left without their final paychecks, accrued vacation, retirement contributions, or sick leave, according to the complaint.

“Spirit had advised its employees that it planned on continuing operations and that they should ignore the rumors that Spirit was near a termination point,” the complaint said.

The employees are seeking 60 days’ back pay, compensation for accrued sick and vacation time, payment for medical expenses that would have been covered within the 60-day time frame, and a priority claim against Spirit for attorney fees.

A Spirit spokesman with FTI Consulting said the company doesn’t comment on pending litigation.

The budget airline shut down on May 2 following failed talks for a federal government rescue proposed by President Donald Trump and surging fuel prices. The carrier rolled out a proposed contingency plan last week to maintain a skeleton crew of “key officers and employees” to liquidate its aircraft and other assets on an expedited basis.

The airline has requested to pay up to $10.7 million in retention payments to 130 non-management employees and to implement a separate bonus plan designed to for its CEO, Dave Davis, and two other senior officers to encourage them to quickly implement a wind-down. Details of the senior executive compensation package are still under discussion.

Spirit hasn’t disclosed the specific amounts of the executive bonuses. But based on 2025 payouts that totaled more than $5 million for the three executives, the employees said they expect the airline to seek potentially millions of dollars per person.

The proposed wind-down budget says retirement plans would receive their vested 401(k) accounts and terminated employees would receive payment for their final hours. The company said it shut down its flights only a day after it became clear that government and lender funding wouldn’t materialize.

The low-cost carrier based out of Dania Beach, Fla., filed Chapter 11 last August, the second time in less than a year. It eliminated about $800 million in debt in its first bankruptcy, which began in 2024, but didn’t sell assets or shrink its leased fleet—steps it said it had planned to take in its second bankruptcy while scaling back in certain markets.

Spirit blamed its second bankruptcy on industry-wide pressures, including more capacity, less demand, and an unexpected termination and default notice from AerCap, its largest aircraft lessor, in August, according to court documents.

The employees are represented by Edelson Lechtzin LLP and Todd E. Duffy PLLC. Spirit is represented by Davis Polk & Wardwell LLP.

The case In re Spirit Aviation Holdings Inc., Bankr. S.D.N.Y., No. 25-11897, complaint 5/12/26.