Published by Mark

Bankruptcy And Discrimination Are An Illegal Combination

August 14, 2009 at 5:28 pm

Just one week ago, I answered a blog reader’s question about his chances of getting hired after filing bankruptcy.  I explained that it’s illegal for a company to refuse to hire someone solely because that person has filed bankruptcy. What’s more, as FindLaw.com adds, no private employer may discriminate against a an employee with respect to promotions, firing, or unequal treatment at work, if that discrimination is based on that employee’s having filed bankruptcy. 

The same anti-discrimination law applies to government agencies as well, even when employment is not involved., explains Stephen Elias in his book The New Bankruptcy.

Just because you filed bankruptcy, you can’t:

  • Be evicted from public housing
  • Be denied public benefits
  • Be refused a state liquor license or renewal of a license
  • Have a college transcript withheld
  • Be denied a contract for a construction project or other work
  • Be excluded from a government guaranteed student loan program
  • Denied a driver’s license

In today’s job market, employers are doing credit checks along with criminal background checks before hiring. According to Workforce Management, some employers are looking at civil records as well, including records of lawsuits and divorce.  Employers say these checks are not looking for bankruptcy, but for history of litigation against former employers, records of harassment in the workplace, or a history of giving away an employer’s trade secrets.

The reality of today includes background checks by employers, who feel that, with so much embezzlement going on, corporations need to do their homework before hiring. At the same time, the Bankruptcy Act has a specific prohibition against employment discrimination based on bankruptcy.
 

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