As if it weren't hard enough to get a job. Atlanta's unemployment rate has hovered around 10 percent for the last year. One out of every 276 housing units in Fulton County was in foreclosure in January -- up almost 7 percent from December. Now, a federal appeals court is telling a company that it's okay not to hire someone because she has filed for bankruptcy.

The case is out of the 5th Circuit, which doesn't include Georgia. The decision, however, mirrors decisions in other circuits, and the ruling could be applied nationwide, in time. These decisions don't bind a Georgia court, but they can be used to persuade a Georgia court to follow their lead. It's the thin end of the wedge.

The case involved a Houston woman who was offered a job. The offer was contingent on her passing a background check and a drug test. She passed both, but the employer, a private company, discovered that she had filed for Chapter 13 bankruptcy protection a year before. The company rescinded the offer. The woman sued.

The woman's argument revolves around a section of the Bankruptcy Code. The provision states that a private company may not "terminate the employment of, or discriminate with respect to employment against" a person who has declared bankruptcy. Unfortunately, that's only one subsection of the law -- subd. (b) of 11 U.S.C. ยง 525. The first part, subd. (a), prohibits government employers from discriminating against "bankrupts."

The language in sections (a) and (b) is not identical, and this court, agreeing with the other decisions, said the language in section (a) governs.

We'll explain the judges' reasoning, and what it means, in our next post.

Sources:

Westlaw News & Insight, "Appeals court rules against job seekers who file for bankruptcy," 3/09/2011

Burnett v. Stewart Title, --- F.3d ----, 2011 WL 754152 (C.A.5 (Tex.)), (page unavailable online) via Westlaw