As fractional-share provider Volato faces financial challenges and the termination of a fleet purchase agreement with Honda Aircraft, a group of former employees has filed a class-action lawsuit alleging violations of the Worker Adjustment and Retraining Notification (WARN) Act.
According to law firm Kwall Barack Nadeau, “The complaint seeks justice for Volato’s failure to provide the legally required 60 days’ notice before mass layoffs.”
The lawsuit was filed on September 12 and “asserts that on or about August 30, 2024, Volato terminated the employment of over 233 employees without providing any advanced notice. This action, as outlined in the lawsuit, constitutes a clear violation of the WARN Act, which mandates that employers with over 100 employees provide 60 days' notice in advance of plant closings or mass layoffs.”
“This case is about holding Volato accountable for the harm it has caused its employees,” said lead counsel Ryan Barack. “Employers are required by law to provide notice before significant layoffs, and Volato’s failure to comply with the WARN Act has had a devastating impact on its workforce.”
Three days before the lawsuit was filed, as first reported by Private Jet Card Comparisons, Volato revealed that Honda Aircraft notified that it had terminated Volato’s fleet purchase agreement (FPA) “effective immediately.” The May 5, 2023 agreement included the purchase of 23 HondaJets for a total of $161.6 million. According to Volato’s Securities and Exchange Commission Form 8-K filing, “Pursuant to the terms of the FPA, Honda Aircraft will retain the deposits that have been previously paid by the Company and the Company has to enter into individual purchase agreements for each aircraft for which a deposit had previously been paid.”
Volato Group’s stock price on the New York Stock Exchange dropped below $1 in June and on June 17 was $0.43 per share. The company suffered a net loss of $34.3 million in the first six months of this year.
In early September, FlyExclusive took over management of Volato’s fleet of HondaJets and Gulfstream G280s, including flight operations, sales, and expenses.
AIN contacted Volato CEO Matt Liotta but did not receive a response by press time.