Many clients ask me if a private employer can refuse to hire them simply because they declared bankruptcy. The unfortunate answer is, "yes." The National Association of Consumer Bankruptcy Attorneys posted this update today.
Third Circuit Finds No Violation of § 525(b) by Failure to Hire
In Rea v. Federated Investors, No. 10-1440 (December 15, 2010), the Third Circuit upheld the lower court's finding that the anti-discrimination provision, § 525(b), does not extend its protection to debtors seeking employment from private employers. The court was persuaded by the contrast between the language in § 525(a), which specifically proscribes discrimination in hiring by public employers, and § 525(b), which applies to private employers and does not include the language relating to failure to hire. The court found that although § 525(b) was enacted some years after § 525(a) the difference between the two provisions was intentional. In Burnett v. Stewart Title, No. 10-20250, a case involving the identical issue, the Fifth Circuit has scheduled oral argument for January 31, 2011. NACBA filed an amicus brief in that case.