Applicant's prior bankruptcy permissible basis for refusal to hire in U.S. Third Circuit

The United States Bankruptcy Code prohibits an employer from taking adverse action against an existing employee because of a bankruptcy filing.

Filed under:
USA, Employment & Labor, Insolvency & Restructuring, Litigation, Reed Smith LLP, Credit history, Bankruptcy, Credit (finance), Discrimination, Employment discrimination, Equal Employment Opportunity Commission (USA), Civil Rights Act 1964 (USA), Third Circuit
Authors:
John T. McDonald
Location:
USA
Firm:
Reed Smith LLP
Bankruptcy Code does not provide cause of action against private employer for failure to hire based on prior bankruptcy filing

Earlier this month, in Rea v. Federated Investors, 2010 U.S. App. LEXIS 25501 (Dec. 15, 2010), the United States Court of Appeals for the Third Circuit held that while federal law prohibits a private employer from firing or discriminating against an employee who files or has filed for bankruptcy, it does not prohibit a private employer from denying employment to someone simply because he had filed for bankruptcy in the past. Thus, 11 U.S.C. § 525(b) does not create a cause of action against private employers who engage in discriminatory hiring.

Filed under:
USA, Employment & Labor, Insolvency & Restructuring, Litigation, Porzio Bromberg & Newman PC, Bankruptcy, Discrimination, Debt, Employment discrimination, US Congress, US Code, Third Circuit
Authors:
Michael J. Naporano
Location:
USA
Firm:
Porzio Bromberg & Newman PC