Employment Newsletter
Thursday, February 23, 2012
- Protection Against Employment Discrimination Based on Bankruptcy Section 525 of the U.S. Bankruptcy Code prohibits employers from firing or otherwise discriminating against a person who "is or has been a debtor" in bankruptcy. This anti-discrimination provision of the Code is intended to furth...
- Cellular Phone Related Injuries and Employer Liability In one decade, cellular telephone use has gone from being a novelty for the fortunate few, to being commonplace in our society. Most Americans have a "cell phone" and many use them while driving. In light of the associated danger...
- Arbitration Provisions in Employment Agreements Arbitration is an alternative to court action. The dispute is submitted to one or more neutral third persons (arbitrators), who consider the evidence and relevant law and issue a decision, just as a court would. The arbitrati...
- Employment Law Considerations Pertaining to the Sarbanes-Oxley Act The Sarbanes-Oxley Act (the Act) became effective in July of 2002. The Act contains provisions that regulate the auditing and disclosure of corporate finances. Both public and private corporations may also be affected by the Act in the...
- Respondeat Superior in Theory and Practice In general, people are not liable for the actions of others. There are, however, exceptions to this rule. One long-standing exception is the doctrine of "respondeat superior," a Latin term meaning "let the master answer." Historica...
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Protection Against Employment Discrimination Based on Bankruptcy
Section 525 of the U.S. Bankruptcy Code prohibits employers from firing or otherwise discriminating against a person who "is or has been a debtor" in bankruptcy. This anti-discrimination provision of the Code is intended to further the goal of allowing debtors who have formally filed for bankruptcy to make a "fresh start."
Scope of Protection
The prohibition against employment discrimination based on bankruptcy applies to both government employers and private employers, and is meant to protect the following categories of people:
- An individual who is or has been a debtor
- An individual who has been insolvent prior to the commencement of a bankruptcy case, or during a case before grant or denial of a discharge
- An individual who has not paid a debt that is dischargeable in a bankruptcy case, or that has been discharged under the Bankruptcy Act
Intent to File Does Not Warrant Debtor Protection
The U.S. Court of Appeals for the Ninth Circuit has set forth a bright line rule for determining exactly which employees are protected by Section 525. Specifically, the court held that an employer who fires a debtor employee after learning of the debtor employee's intent to file bankruptcy does not violate the Code. Rather, protection only extends to employees who have already filed for bankruptcy.
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