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Rea v. Federated Investors, 10-1440

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By FindLaw Staff on December 15, 2010 3:49 PM

Plaintiff's suit against defendant for refusing to hire him because he had formerly declared bankruptcy

Rea v. Federated Investors, 10-1440, concerned a plaintiff's suit claiming that defendant violated 11 U.S.C. section 525(b) for refusing to hire him because he had previously declared bankruptcy.  In affirming the district court's grant of defendant's motion to dismiss for failure to state a claim, the court held that the district court properly declined plaintiff's request to read the phrase "discrimination with respect to employment" in section 525(b) as broad enough to encompass discrimination in the denial of employment.


As the court wrote: "Section 525(a) provides that the Government may not "deny employment to, terminate the employment of, or discriminate with respect to employment against" any person that has been bankrupt.  In section 525(b), on the other hand, Congress omitted the language prohibiting a private employer from "denying employment to" a person that has been bankrupt.  As the Supreme Court stated in Russello, "we refrain from concluding here that the differing language in the two subsections has the same meaning in each.  We would not presume to ascribe this difference to a simple mistake in draftsmanship."" 

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