how an attorney changed the outcome of my lawsuit

Posted on: 28 August 2018

When you fall on financial hard times, you're perfectly within your rights to file bankruptcy as a means of dealing with your debt. An unfortunately consequence of this, though, is some employers will fire employees who demonstrate they have money problems. While this is technically illegal, employers find creative ways to get around the law. Here's what you need to know.

Bankruptcy Discrimination is Against the Law

Federal law clearly prohibits both the government and private businesses from firing or taking other adverse actions against employees who exercise their rights and file for bankruptcy protection. In fact, employers can't even use the fact that an applicant has filed for bankruptcy as a reason to not hire the individual for a job.

So, if it is clear you were denied a job, promotion, or were terminated because you discharged your debts through chapter 7 or chapter 13 bankruptcy, you could sue the offending party for the damages and losses you sustained as a result.

Ways Employers Subvert the Law

Unfortunately, just because something is illegal doesn't prevent people from doing it or, at least, finding ways to subvert the prohibition. Although the employer can't use your bankruptcy against you directly, one way the company may get around this issue is by taking adverse action based on your credit history.

For example, the company can require employees maintain a minimum score or not have any past due accounts. Thus, your employer could deny your promotion if the bankruptcy causes your credit score to fall below the threshold. This commonly seen in cases where employees must maintain clean files to obtain security clearances of some kind. If you can't pass the clearance check because of your credit, then you could not continue to work at your job since you don't have the necessary access.

Another popular tactic employers take is to make up other reasons to let targeted employees go. For instance, a manager will start giving a star employee negative performance reviews for no apparent reason and then fire the worker based on that. If this happens after the manager finds out about the employee's bankruptcy, then it's likely the sudden downturn in performance reviews is just cover for the manager's real motivation for letting the employee go (i.e. the bankruptcy filing).

Because an employer's workaround isn't always illegal or obscures the real reason for an adverse action against an employee or applicant, it can be difficult bringing a discrimination suit against the company. If you think you have a case but aren't sure the evidence is there to support you, discuss the issue with a discrimination attorney anyway. There may be other courses of action you can take to get the outcome you want.