- Sexual Orientation Discrimination
- Is Extended Leave a Reasonable Accommodation?
- Parental Leave
- Pay Disparity
- Religious accomodation in the workplace
- Equal pay and prior salary information
- I quit! How to avoid constructive discharge
- You Can't Shred Email
- Navigating Unemployment Claims
- Considering Criminal History in Pre-Employment Decisions
- Defamation Claims from Former Employees
- Mixed Motive Causation
- Requesting Accomodation: Kowitz v. Trinity Health
- Antitrust Law in Human Resources
- An Evolving Standard: Joint-Employment
- What Does At-Will Employment Mean for Employers?
- Let's Talk About Wages
- THE FLSA: CHANGES ARE COMING
- Follow Up: Obesity and the ADA
- The Importance of Social Media Policies
- Is Obesity a Qualifying Disability under the ADA?
- Retaliation on the Rise: The EEOC Responds
- What Motivates You?
- "But I thought ...
- Who’s expecting? And what is he expecting?
- Are You Still Doing Annual Performance Reviews?
- Who is Your Employee?
- The unpaid intern trap Part II
- “We’ve been the victim of a cyber-attack”
- So, a Hasidic Jew, a nun in a habit and a woman wearing a headscarf walk into your office?
- The unpaid intern trap
- Pregnancy in the workplace
- Let's talk about honesty.
- "Did You Know" Series - Part I
- Conducting an Internal Investigation
- What HR can look forward to in 2015!
- The chokehold of workplace technology
- Does your company have trade secrets?
- North Dakota Construction Law Compendium for 2014
- Does the North Dakota baby boom affect you?
- Ban the Box? Why?
- The end of the world as we know it
- Everybody has an opinion
- Changes, Changes, Changes!
- Nick Grant presents at North Dakota Safety Council's 41st Annual Safety and Health Conference
- Email impairment: A potentially harmful condition
- Are Employers Required to Give Stressed-Out Employees Time Off?
- Can you obtain a credit report when investigating employee wrongdoing?
- Can’t we just sidestep the ACA?
- Should Your Employees Telecommute? Part III
- Should Your Employees Telecommute? Part II
- Should Your Employees Telecommute?
- Proper Investigation of Employee Misconduct
- Battles in the Wellness War
- Rules are rules! Aren’t they?
- What's going on in Bismarck
- A glimpse ahead
- Obesity as a disability under the ADA – reweighing the issue
- What’s next for your business under the Affordable Care Act?
- Criminal Background Checks
- Becoming a lawyer is a process, not an event [Section 5 of 5]
- Congress Says Yes To North Slope Energy Jobs Bill
- Test Your Knowledge of Social Media Policies and Employee Discipline
- Becoming a lawyer is a process, not an event [Section 4 of 5]
- What Every Employer Needs to Know About the NLRA
- Will the 2012 Elections Make A Difference
- Where There's Smoke...
- Dress Code Etiquette: Is Casual Friday Becoming Freaky Friday
- The Next Disaster May Be Yours
- Hostile Work Environment Claims
- North Dakota Employment Law Links
- There's An App For That
- Am I a “Business Associate”? Why Should I Care?
- Do You Recognize a Cat's Paw When You See One?
- Cell Phones Can Cost a Lot, Part II
- Becoming a lawyer is a process, not an event [Section 3 of 5]
- Cell Phones Can Cost a Lot, Part I
- The Economy - What HR Professionals Need To Know
- Becoming a lawyer is a process, not an event [Section 2 of 5]
- Three New Challenges For HR Professionals
The Economy - What HR Professionals Need To KnowBy: Paul Ebeltoft
The recession of 2008 destroyed more personal wealth than any other event since the Great Depression. One of the sad effects is that persons displaced in the job market are becoming increasingly desperate to get back in. A recent survey by Vault.com found that almost 25% of your applicants either have or would lie to you in the job interview process.
As personal finances are going the way of Lindsay Lohan’s career, it is becoming increasingly likely that some of your applicants’ falsehoods will include fudging about past fiscal responsibility. The purpose of this article is not to suggest that past personal economic instability is a predictor of a potentially dishonest employee. At the same time, it is true that, for hiring decisions, a poor credit history can be a substantial negative factor.
As human resource professionals, you are aware that you must comply with the Fair Credit Reporting Act to obtain a credit report. But, what do you do when you lawfully learn of an applicant’s ongoing or prior bankruptcy?
THE BANKRUPTCY DILEMMA
Consider the case of a Pennsylvania man, Dean Rea. Rea filed for bankruptcy in 2002 and the Bankruptcy court discharged his debts in 2003. In 2009, Rea applied for employment with Federated Investors. Although it appeared after Federated interviewed him that Rea was the successful applicant, Federated refused to hire him when they learned of his bankruptcy. There was, apparently, nothing in his background, other than his bankruptcy, to stain Rea’s past conduct or character.
Rea sued Federated. Rea claimed, rightly, that a government employer could not have denied Rea employment because of the bankruptcy or, once hired, fired or discriminated against him for a past or future financial failure. Rea claimed, again rightly, that no private employer may terminate the employment of or discriminate with respect to an individual who has been or who is associated with a bankrupt. Why then, Rea argued, should a private employer be able to use the bankruptcy against him as a job applicant?
Rea lost. His logic was good but the law as written by Congress, the court found, did not extend as far as Rea’s logic.
Consider, however, the case of New Yorker, Marlene Leary. She received her discharge in bankruptcy in 1999. Later that year she interviewed for a job with a private employer called Warnaco, Inc. Warnaco awarded Leary the job, subject to the results of a credit report. The report disclosed her bankruptcy and Warnaco refused to hire her.
Leary sued. Unlike poor Rea, she won. In Leary’s case, the court found that the law is clearly broad enough to extend to a private company refusing to hire a bankrupt solely on those grounds. The court said, “The evil … is no different when an employer fires a debtor simply for seeking refuge in bankruptcy, [than] refusing to hire a person who does so. The ‘fresh start’ policy is impaired in either case.”
SO, WHAT’S AN EMPLOYER TO DO?
• If you are working in HR for a governmental employer, you cannot use a bankruptcy to discriminate against an applicant or a current employee.
• If you are a human resource professional in the private sector and you obtain notice of the bankruptcy of a current employee, you cannot discriminate because of the bankruptcy.
The only grey area is for private employers who are considering applications for employment. In this regard, commentators and courts increasingly believe that it is the Rea case, not the Leary case, which will eventually hold sway.
However, until that is decided, the safe path for private employers is to disregard a prior bankruptcy, however disclosed, in a hiring decision. If your company would not otherwise hire an applicant for valid, non-discriminatory reasons, and you learn of the applicant’s bankruptcy, be sure to document the business-related reasoning for rejecting the applicant. Be sure to use these reasons as the basis for your eventual hiring decision.
Reprinted with permission from an article submitted for publication in the February 2011 Southwest Area Human Resource Association newsletter.