Best Ohio Employment Discrimination Attorney Answer: Can my employer discriminate against me because I filed for bankruptcy? Can a company refuse to hire me because I filed for bankruptcy? Do I have a claim for wrongful termination?
Bankruptcy carries a certain stigma with it that is unfair to most people who are forced to file. Despite the fact most bankruptcies are caused by unforeseen financial burdens such as medical bills, job losses, and divorce, many people still see bankruptcy as evidence that someone is financially irresponsible or otherwise a failure. Can an employer who believes this discriminate against someone who had filed for bankruptcy? The answer is yes, and no.
Section 525b of the Bankruptcy Code makes it clear that employers may not take an adverse action against a current employee just because the employee has filed for bankruptcy:
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
However, a majority of courts have found that the above language offers no protection to people seeking employment with private employers. This seems ironic, especially since the same courts have found that Section 525a prohibits government employers from refusing to hire someone because of a bankruptcy. This inconsistency has to do with the slight difference in the language of section 525a, which states:
a governmental unit may not…deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title or a bankrupt or a debtor under the Bankruptcy Act, or another person with whom such bankrupt or debtor has been associated, solely because such bankrupt or debtor is or has been a debtor under this title or a bankrupt or debtor under the Bankruptcy Act
Despite the fact that Congress added Section 525 to the Bankruptcy Code in 1984 with the intent of giving debtors who filed for bankruptcy a fresh start, courts have justified this differing standard by adhering to the “plain language” jurisprudence, which holds that where Congress uses different language, it intended a different result. For example, in Rea v. Federated Investors, the Third Circuit Court of Appeals held:
Where the language of the statute is plain, “the sole function of the courts is to enforce it according to its terms.” Although § 525(b) was enacted years after § 525(a), its language regarding employment discrimination is nearly identical to that used in § 525(a) and Congress chose to place the two subsections adjacent to each other in the Bankruptcy Code. It is abundantly clear that Congress modeled § 525(b) off of § 525(a) and that any differences between the two are a result of Congress acting intentionally and purposefully. As the Supreme Court stated in Russello v. United States, “[w]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusive or exclusion.”
Section 525(a) provides that the Government may not “deny employment to, terminate the employment of, or discriminate with respect to employment against” any person that has been bankrupt. In § 525(b), on the other hand, Congress omitted the language prohibiting a private employer from “deny[ing] employment to” a person that has been bankrupt. As the Supreme Court stated in Russello, “[w]e refrain from concluding here that the differing language in the two subsections has the same meaning in each. We would not presume to ascribe this difference to a simple mistake in draftsmanship.”
It seems odd that Congress would intentionally prohibit the government from refusing to hire someone who has filed for bankruptcy while allowing private employers to do so freely. Such an outcome is not only unfair, but it is also inconsistent with the overriding goals of the law: to give those in bankruptcy a fresh start. How can you get a fresh start when you can’t get a job?
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