Can You Get a Job with a Bank After Filing Bankruptcy?

Employment Exhibition

Employment Exhibition (Photo credit: Modern_Language_Center)

When you file for bankruptcy protection, it is likely you will have included a bank as one of your creditors you are filing against. What happens if you have filed a bankruptcy and have included as one of your creditors a bank that now has a job opening? Can you get a job with a bank after filing bankruptcy?

This happened to a blogging debtor who shared his personal bankruptcy story on a bankruptcy forum website. The former filer wrote, “Is it even possible to get a job with a bank after bankruptcy, or is it just a pipe dream? I know somebody in a bank who said that the bank was hiring, and told me to use her as the person who referred me to the job. Of course, there will be a background check. Thing is, not only are they a bank and will probably frown upon a bankrupt person working for them, but they were also one of my creditors that I filed relief against.”

Bankruptcy laws, like any other legislated laws, evolve through various court interpretations over time. The precedence set in these evolving cases determine in many incidences how other similar court decisions might turn out. Discrimination in hiring over bankruptcy has recently evolved in a direction worthy of note.

The bankruptcy laws most used in determining discrimination in hiring practices is found under the bankruptcy code’s “nondiscrimination” provision, 11 U.S.C. Section 525. There are two parts to the law that apply in determining discrimination:

  1. Section 525 (a) reads in part, “[A] governmental unit may not … deny employment to, terminate the employment of, or discriminate with respect to employment against, a person that is or has been a debtor under this title…”

  2. Section 525 (b) reads in part, “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 this title….”

In interpreting these two statutes, the federal Eleventh Circuit Court of Appeals ruled in Myers v. ToJay’s Management Corporation on May 17, 2011, that a private employer can refuse to hire a person based solely upon the fact that he or she filed for bankruptcy. This is the third federal appeals ruling of its kind, marking a clear trend for a precedence allowing such discrimination in hiring practices. All three rulings were handed down in 2010 and 2011.

All of this means that bankruptcy lawyers will most likely be informing their clients of the possibility they can be discriminated against in hiring practices if they file for bankruptcy protection.

In times past, hiring discrimination for potential employees who had filed a bankruptcy was allowed by many courts for those who sought employment in industries with sensitive financial natures. Any type of employment handling larges sums of money, like certain bank employees, would qualify. The employer could deny employment on those grounds.

Myers, a shift manager for Starbucks, applied for employment as a restaurant manager at TooJays. The restaurant turned him down because Myer had a bankruptcy on his credit report, and when Myer sued them in court for discrimination, TooJays won their case. The case findings enhanced the new precedent for hiring discrimination for jobs outside of sensitive financial handling when you consider Myer was already handling and managing a budget.

Can you get a job with a bank after filing bankruptcy? In today’s work environment, there is a real possibility you cannot.

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