Thursday, June 2, 2011

Employer May Consider Job Applicant’s Bankruptcy History

The Eleventh Circuit Court of Appeals has held that an employer may consider a job applicant’s bankruptcy history in deciding whether or not to hire the individual. Myers v. Toojay’s Mgmt. Corp., No. 10-10774 (11th Cir. May 17, 2011). While the federal bankruptcy code contains a provision that an employer may not “terminate the employment of, or discriminate with respect to employment against” an employee due to a bankruptcy filing, the Court found that this prohibition does not apply to applicants, therefore joining the Third and Fifth Circuits in this analysis. While the ruling may be helpful to employers in these circuits, they should be careful to make sure that hiring decisions are, in fact, job related in order to prevent other claims of discrimination – i.e., claims of adverse impact.

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