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In a recent decision, the 3rd U.S. Circuit Court of Appeals held that the Bankruptcy Code’s anti-discrimination provisions applicable to private employers do not apply to hiring decisions. See Rea v. Federated Investors, No. 10-1440, 2010 WL 5094250 (3d Cir. Dec. 15, 2010). Finding that the language of the statute is plain and that Congress chose to prohibit discrimination in hiring in the anti-discrimination section of the Bankruptcy Code applicable to public employers but not in the section applicable to private employers, the court held that Federated Investors did not violate 11 U.S.C. §525(b) when it refused to hire the plaintiff because he had previously declared bankruptcy. While this decision indicates that private employers may avoid liability under the Bankruptcy Code when making hiring decisions on the basis of an applicant’s bankruptcy filing, such employers will face liability under the Bankruptcy Code’s anti-discrimination provisions if they terminate an employee or otherwise discriminate against an employee on the basis of his bankruptcy filing. Id.

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