No Bar to Private Employers Using Applicant’s Bankruptcy History in Hiring Decisions

Rea v. Federated Investors, 2010 WL 5094250 (3d Cir., December 15, 2010) – The Third Circuit Court of Appeals has ruled that a provision in the Bankruptcy Code which prohibits private employers from “terminat[ing] the employment of, or discriminat[ing] with respect to employment” against an individual who had previously declared bankruptcy, does not create a cause of action against a private employer who declines to hire based upon an applicant’s previously declared bankruptcy. Analyzing the bankruptcy provision at issue, 11 U.S.C. § 525 (b), the Third Circuit noted that it was proper to decline the plaintiff’s request to read the phrase “discrimination with respect to employment” in Section 525(b) as broad enough to encompass discrimination in the denial of employment.