Federal 5th Circuit Court Joins 3rd Circuit in Holding that Private Employers May Reject Applicants Based on Bankruptcy History

In Shani Burnett v. Stewart Title, Inc., the 5th Circuit became the second federal appellate court to hold that private employers may discriminate against job applicants based on their bankruptcy history.  While not surprising (considering the statutory analysis that was done), this holding has the same danger as the 3rd Circuit case of giving employers a false sense of security in the legality of discriminating against applicants based on their financial history.

As I warned here, the EEOC is going to prosecute such cases if it believes such a policy has a disparate impact on protected groups.  It would be wise for employers to track the recently filed case EEOC v. Kaplan Higher Education Corp.   In the meantime, if you wish to consider such financial history in hiring, it would be prudent to limit it to sensitive positions, and to differentiate between the sorts of debt the applicants have.  For more on this see here

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