Unions for former Spirit Airlines workers have withdrawn their objections to Google's $10 million purchase of the defunct carrier's internal data for AI training, after the airline and Google agreed to keep more employee records out of the deal and to scrub what remains under a stricter standard. That clears the way for a bankruptcy judge in New York to consider approving the sale at a hearing set for Nov. 17.
The settlement matters beyond Spirit because nothing in the law made Google or the airline offer it. The Bankruptcy Code requires extra review before a debtor sells customers' personal information, but it has no comparable rule for employees. The Association of Flight Attendants-CWA, which led the objection, said in a Nov. 10 statement that workers have no privacy protections under the Bankruptcy Code or under federal or state law. What the unions won came from negotiation. If the judge approves the deal, its price and its terms will be the first court-tested example of how a failed company's emails, chats and files can be sold to an AI developer.
Spirit Aviation Holdings filed revised sale papers on Monday night in its Chapter 11 case, In re Spirit Aviation Holdings, No. 25-11897, before Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York. The court's calendar lists the sale for 11 a.m. Eastern on Nov. 17, with a pretrial conference on Nov. 12.
According to the AFA, the revised deal excludes employee health and medical information, drug and alcohol testing records, disciplinary records, safety-program records and identification documents. Remaining data must be de-identified under the international ISO/IEC 27559 framework, which the union called more rigorous than the U.S. standard Spirit had planned to use. An independent verification agent, chosen in consultation with the unions, will review the work. Google may not try to re-identify anyone, and it must process the data in a secure environment and treat it as confidential.
"Worker data privacy in the age of AI has become a whole new worker's rights issue," Sara Nelson, the AFA's international president, said in the statement. "Without our union, there would have been no one to speak for workers in this fire sale of their private information."
A docket summary by Bankruptcy Observer, which tracks bankruptcy filings, says the revised agreement lists 20 categories of excluded employee data, including payroll records, grievance files, crew pairings, pilot and flight attendant time cards, and records from the FAA-backed Aviation Safety Action Program. Records in 16 of those categories may still be included in de-identified form if they cannot reasonably be pulled out. Four categories, including biometric data and recordings of flight attendants, stay out entirely. Sayer has not independently reviewed the revised filing.
Google, not Spirit, pays for the scrubbing, on top of the $10 million price. The de-identification will be done by Tonic AI, a company that makes software for removing personal details from data. Tonic was named in an Oct. 5 report by the court-appointed consumer privacy ombudsman, Lucy Thomson, and again in the revised papers, according to Bloomberg Law.
Bloomberg Law also reported that Google can back out of the deal if search-term exclusions, which are used to filter out sensitive records, cut the volume of data it is buying. The visible portion of that report does not say how large a reduction would let Google walk away, and Sayer has not seen the clause.
How much data is still in the deal is unclear. Spirit's August asset schedule listed about 100 million emails from 80,000 accounts, 500 million Microsoft Teams items and roughly 30 million lines of source code. A letter to Google and Spirit from 121 members of Congress, led by Sen. Elizabeth Warren and Rep. Steven Horsford, cited the email and Teams figures in October. Skift, the travel-industry publication, reported that the 157-page revised filing describes a larger pool, including about 1.9 billion emails across 91,000 accounts and 664 million Teams items. No filing reviewed by Sayer gives a volume after the new exclusions.
Google won the data at an Aug. 14 auction, with the AI data startup Mercor as backup bidder at $7.5 million. Another startup, micro1, later said in a filing that it would pay $12.5 million, according to the docket summary. The ombudsman recommended approval in October after Google and Spirit agreed to drop databases holding the personal information of about 97 million passengers. Her supplemental report said she reached no conclusion on the risks to employees.
Google did not immediately respond to requests for comment from Reuters and Business Insider. In October, a Google spokesperson told Reuters that the company was "not looking to buy any personal information from Spirit" and that the data would be excluded or de-identified by an independent third party before Google received it. Spirit said it was pleased to reach a resolution.
The hearing may not be a formality. As of the Nov. 9 filing, the docket summary still lists unresolved objections from the trade group Airlines for America and several vendors that want their proprietary data excluded, and it lists filings by two other pilot unions as outstanding. The AFA says both of those unions joined its coalition.
In a brief supporting the flight attendants, the Electronic Privacy Information Center argued that approving the sale as first proposed would "create perverse incentives for employers to over-collect employee data," according to the AFA. Nelson said the union will now push employers for contract protections and press lawmakers for federal and state laws.
Until such laws exist, the protections workers get in a liquidation will be whatever their unions can negotiate before the buyer's bid is approved.