On a Friday conference call, Fyre Festival co-founders Billy McFarland and Ja Rule informed employees they will no longer be paid, according to a report from Vice News. The report includes edited audio of the conference call where McFarland reveals the staff isn't fired, but they'll no longer be paid.
On the call, a voice said to be McFarland quickly breaks the news to staff. "After conferring with our counsel and all financial people, unfortunately, we are not able to proceed with payroll,” he said. “We’re not firing anyone. We’re just letting you know that there will be no payroll in the short term.”
He offers employees the option to continue working for free. “I understand that this is not an ideal situation for everybody, and this will likely cause a lot of you to resign, which we totally get and understand,” he said. “That said, if you want to stick with us, we’d love to have you and we’d love to work together and hunker down and get back to a place where everything resumes to business as usual.”
The problem for employees is if they aren't being paid and aren't being fired, the only option for most is to quit. However, if they quit, they aren't able to apply for unemployment benefits. On the call, the co-founder says he didn't realize that. "If that impacts you, you can email me," he tells employees, promising to "circle back up" on the issue. "The last thing I want to do is put anybody in a bad position."
In addition to the abysmal news for employees, the call starts with McFarland discussing a "preservation notice." Employees are instructed to not delete emails or files from company accounts, likely in connection with the many lawsuits reportedly filed against Fyre, including a $100 million class-action lawsuit.
Toward the end of the call one employee is heard to ominously ask, "Billy, should we have any concern about the FBI?"
"I don't know. I think that's an individual thing," he responds. "The company has council, who I'm happy to loop everybody in with."
Vice reports that most employees quit over the weekend or on Monday. Listen to the full call here.
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