Can an Employer in Atlanta, Georgia Refuse to Hire me due to my Bankruptcy Filing?

Unfortunately, yes. Although private employers CANNOT terminate or discriminate against a person who has filed bankruptcy, a private employer CAN refuse to hire you, simply because you have filed bankruptcy. In fact, there is a section of the Bankruptcy Code–11 U.S.C. § 525 (b)–that allows private employers to do so.

In a recent 11th Circuit case of Myers v. Toojay’s Management Corporation, the Florida Court of Appeals found that a private employer CAN deny employment due to a bankruptcy filing, even though government employers are prohibited from taking any negative action against people who are or have been in bankruptcy.

Eric Myers had recently moved from North Carolina to Florida and had expressed an interest in a regional manager position at a restaurant. In addition to an interview, Myers consented to a background check, which included a review of his credit history and credit report(s). Myers then participated in a two-day, on-the-job evaluation and was given a start date to begin working at the restaurant. So, Myers gave two weeks’ notice to his previous employer. However, that same day, Myers received a letter from the restaurant withdrawing his offer of employment based “in whole or in part” on information found in his credit report.

Myers contacted the restaurant’s human resources department and was told that he was denied employment because he had filed bankruptcy and it was restaurant policy not to hire people who had done so. Myers filed a lawsuit against the restaurant, but the District Court found against him. On appeal, the Court had to determine whether the restaurant could refuse to hire Myers, simply because he had filed for bankruptcy.

The Court of Appeals noted that one section of the Bankruptcy Code–11 U.S.C. § 525 (a)–clearly prohibits a governmental unit from denying employment to a person who has filed bankruptcy. However, the section relating to private employers–525 (b)–does not contain the same prohibition.

The Court of Appeals stated that, according to the Supreme Court, where Congress includes specific language in one section of a statute but omits it in another section of the same Act, it is presumed that Congress left the language out on purpose. The Court of Appeals did not think it was proper to assume that Congress meant to prohibit BOTH governmental units and private employers from denying employment to bankruptcy filers. So the restaurant, as a private employer, was allowed to refuse to hire Eric Myers because he had filed for bankruptcy.

If you are in debt and would like to discuss whether bankruptcy is appropriate for your financial situation, please contact the Law Offices of Charles Clapp at 404.585.0040 to schedule a free initial consultation.