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Bankruptcy Discrimination

by The Human Equation, Inc. on 7/25/2008
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It has come to my attention that my best cashier recently filed for bankruptcy. I no longer feel comfortable letting him operate the checkout line without supervision, however, I am finding it difficult to watch him all the time. Can I fire this employee based on his bankruptcy filing?

No. The United States Bankruptcy Code ("Code") prohibits private employers from discriminating against individuals because they filed for bankruptcy. Specifically, the Code provides that "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 [the Code]...solely because such debtor:" 1) filed a bankruptcy case; 2) was insolvent prior to, or during, the bankruptcy case; or 3) has not paid a debt that is dischargeable or that was discharged under the Code.

It is important to note that this provision prevents discrimination "solely because" the individual filed for bankruptcy. This has been interpreted to mean that private employers cannot fire an employee "solely and only because they applied for bankruptcy protection." To do so would constitute a violation of federal law, and culpable employers will be hauled into bankruptcy court to explain their actions.

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Categories: 2008

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