The 11th Circuit Court of Appeals, following a trend among appeals courts, issued an opinion ruling that private employers could make hiring decisions based on whether or not an applicant had previously filed for bankruptcy.
The court hung their hat on Section 525(b) of the Bankruptcy Code, which states:
No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt—
(1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act;(2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or(3) has not paid a debt that is dischargeable in a case under this title or that was discharged under the Bankruptcy Act.
The 11th Circuit is following the example of the 5th Circuit in In re Burnett (see below for full opinion) and the 3rd Circuit in Rea v. Federated Investors (see below for full opinion).
I’m disappointed to see the courts heading this direction. It undermines the whole premise of bankruptcy: providing a new start. Bankruptcy is a responsible decision and the first step in taking control of your financial future. Employers should think twice about not hiring someone who has taken this step.
You can read Myers v. Toojay’s Management Corp. here:
[gview file=http://www.ca11.uscourts.gov/opinions/ops/201010774.pdf]
You can read In re Burnett here:
[gview file=http://www.ca5.uscourts.gov/opinions%5Cpub%5C10/10-20250-CV0.wpd.pdf]
You can read Rea v. Federated Investors here:
[gview file=http://www.ca3.uscourts.gov/opinarch/101440p.pdf]