The recent recession tarnished the credit histories of thousands of Americans and spurred an uptick in personal bankruptcies. That focused public attention on whether it is fair in such a climate to screen job applicants based on their credit reports. Several legislatures said no and passed laws restricting the practice. The Equal Employment Opportunity Commission (EEOC) took a renewed interest, too, contending that the use of credit reports can have a disparate impact on minority applicants.
Because of that political climate, employment lawyers are taking a cautious approach to the 3rd Circuit’s Dec. 15, 2010, opinion in Rea v. Federated Investors, which upheld an employer’s right to reject a job applicant based on a previous bankruptcy.
