News & Resources

U.S. Court of Appeals says bankruptcy history can be a reason not to hire job applicants

Jan 10, 2011 Matt Roesly

In a recent ruling by the United States Court of Appeals for the Third Circuit, it was determined that a private company can legally take into account an applicant's past bankruptcy history when deciding whether or not he or she will be hired.
 While employers are forbidden under current law to discriminate against current workers who have filed for bankruptcy, it can be taken into consideration under the most recent ruling. The most current case centered on a person who had applied for a job and was no longer considered after a bankruptcy had been found in his history. The court found that, although Congress had forbidden public employers from taking bankruptcy into account, private employers were not subject to the same law. "Congress omitted the language prohibiting a private employer from 'deny[ing] employment to' a person that has been bankrupt. As the Supreme Court stated in a previous case, 'we refrain from concluding here that the differing language in the two subsections has the same meaning in each,'" the court stated in its decision. There have been other cases regarding background checks for employees. A new bill in the U.S. House of Representatives seeks to prevent anyone previously convicted of a violent or sexual crime from working in schools.