Joseph Beachboard

Ogletree Deakins P.C.
Torrance, CA
www.OgletreeDeakins.com
Joe.Beachboard@OgletreeDeakins.com
(310) 217-8191

Joseph L. Beachboard is a nationally recognized expert on employment law issues who speaks regularly at SHRM and other HR events. He also is a regular contributor to several national and California publications. In 2000, Mr. Beachboard sold The Labor Letters, Inc., a publisher of monthly employment law journals that he founded to advise human resource professionals. He is a founding member and executive director of the Management Employment Law Roundtable, a national, invitation only, organization of management labor and employment lawyers.

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Within 48 hours, Premium Plus subscribers will receive e-mail answers to their employment law questions from attorney Joseph Beachboard. Here's this week's sample  Q&A:

Q. I recently discovered that an employee who handles my company’s accounts receivable has filed for bankruptcy. Can I discharge this employee?

A. Under the Federal Bankruptcy Act, bankruptcy is not a legal reason for rejecting an applicant or firing an employee.

The statute provides: “No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt.”

The limited number of court rulings that have addressed this provision in the Bankruptcy Act have been willing to apply a retrospective “but for” analysis to determine whether the bankruptcy information was the reason for an adverse employment decision (i.e., but for the bankruptcy, the worker would not have been terminated).

Thus, an employer that obtains information indicating that an applicant or current employee has filed for bankruptcy should base any adverse employment decision only on facts independent of the bankruptcy filing—and should ensure that clear documentation exists establishing this explanation.

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The answers to these questions are provided for informational purposes only and should not be relied on as legal advice. The posting and viewing of these answers do not create an attorney-client relationship.