Review of Credit Reports by Employers

As a bankruptcy lawyer I often hear clients express concern that, if they file bankruptcy, their employers will fire them. I can in this case point out that it is illegal for an employer to take action against an employee for filing bankruptcy, which I believe is a law most employers, who obtain legal advice on employment matters will follow. However, some people still express fear that their employers will merely deny that bankruptcy was the real cause of the hostile action against the employee. Senator Elizabeth Warren from Massachusetts has just introduced a bill that could also make it illegal for an employer to look at an employee’s credit report in making hiring or firing decisions. This would of course strengthen the protection, because if employers cannot look at credit reports, they are less likely to even know the employee filed bankruptcy. Since January 1, 2011 Illinois has had a similar law barring employers from considering credit reports although the Illinois law has a number of exceptions.