One might think that bankruptcy is a private matter, with little to no bearing on whether one can meet the qualifications for a particular job. As my colleagues report today, the U.S. Court of Appeals for the Eleventh Circuit (with jurisdiction over Alabama, Florida and Georgia) joins its sister Circuits (the Third and Fifth Circuits) in holding that it is not impermissible under the Bankruptcy Code for an employer to refuse to hire an applicant due to a prior bankruptcy. Myers v. Toojay’s Mgmt. Corp., No. 10-10774 (11th Cir. May 17, 2011). However, as discussed in their report, the Code does state that a private employer may not “terminate the employment of, or discriminate with respect to employment against” an employee due to a bankruptcy. 11 U.S.C. § 525(b).

Of course, what is permissible under the Bankruptcy Code may not be under state law. As the report notes, and as reported here, a handful of states (e.g., Hawaii, Illinois, Maryland, Oregon, and Washington) have enacted limitations on an employer’s ability to acquire or use credit information in making hiring decisions. Further, any bankruptcy information acquired with respect to an applicant may include personal information that may need to be safeguarded, and as my colleagues advise, the use of that information should be based on job-related considerations to avoid Equal Employment Opportunity Commission claims based on adverse impact theories.