Bankruptcy

Court Says Private Employer Can Deny Job Because Of Debtor's Bankruptcy

By Jonathan Alper

Most people who file bankruptcy are concerned about how bankruptcy might affect other aspects of their life. One of the most common concerns is bankruptcy?s effect on future employment. Many bankruptcy debtors are afraid their bosses will fire them if they learn about the bankruptcy; debtors also worry that a bankruptcy will hurt chances of getting a new job.

I have stated previously on this blog that bankruptcy law prohibits an employer from terminating someone because they filed bankruptcy. Section 525 of the Bankruptcy Code prohibits a private employer from discrimination against or termination of an individual who files bankruptcy, and the section prohibits a governmental unit from discrimination or denial of employment with respect to a bankruptcy debtor.

One bankruptcy debtor argued in an appellate court case that the Code?s prohibition against discrimination in employment by a private employer is broad enough to prohibit a private employer from denying employment on the basis of a prior bankruptcy. The appellate court denied the debtor?s appeal. The court said that the Code clearly stops a government employer from denying new employment because of a prior bankruptcy, and if Congress wanted the same rule applied to private firms it would have said so in the legislation. The court said that Section 525 is not broad enough to stop a private employer from denying employment because the job applicant previously filed bankruptcy. Third Circuit Court of Appeals No. 10-1440

Full post as published by Florida Bankruptcy Law on January 02, 2011 (boomark / email).