As Nevada continues to lead the country in per capita bankruptcy filings, many Las Vegans are concerned they might be fired or face other retaliation by their employers if they file bankruptcy.
Nevada, like most states, considers employees “at will” which means that employees can be fired for any reason or even no reason as long as it is not done in violation of certain public policy protections such as race or gender. However, bankruptcy code specifically states that employees may not be fired simply because they filed for bankruptcy. The Bankruptcy Code, at 11 U.S.C. sec. 525(b), states that “No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt.” Employees terminated unlawfully based on filing for bankruptcy may receive back pay including fringe benefits and reinstatement, and may also recover damages for emotional distress.
However, it is highly unlikely that employers or anyone else will ever know who files for bankruptcy unless the employee discloses that information. The only parties that will know are creditors and any co-debtors (co-signers). No one stands outside the court house to read off the names of those who filed for bankruptcy that day and the names of people who have filed for bankruptcy are not published in local newspapers or community newsletters.
In summary, employers will only know if an employee files for bankruptcy protection if that employee tells them. Furthermore, if an employer does somehow learn of the filing and attempts to retaliate against the employee because of the bankruptcy, the employee can turn to the protections provided by the bankruptcy code.
Randy M. Creighton, Esq.
On December 21, 2009, President Obama signed the Fiscal Year 2010 Defense Appropriations Act into law. The Act will extend the current nine-month COBRA subsidy for an additional six months, allowing for a total of 15 months of COBRA subsidy. The Act will also extend eligibility to workers who are involuntarily terminated through February 28, 2010; prior to the enactment, the law covered workers involuntarily terminated through December 31, 2009. Please note that the Fiscal Year 2010 Defense Appropriations Act requires employers to provide current and future COBRA beneficiaries with notice of this new extension.
On November 25, 2009, the Nevada Supreme Court addressed an appeal on a lawsuit which was dismissed under Nevada’s anti-SLAPP statute. Nevada adopted a statute similar to several other states, which protects against a meritless suit filed primarily to chill the defendant’s exercise of First Amendment Rights, such as when a citizen makes a report or request to a government agency and someone else takes offense and sues them in retaliation. Thus, Nevada seeks to protect the free speech rights of its citizens. The Court found that Nevada’s anti-SLAPP statute can be applied to a cause of action based upon a federal statute, and that the district court was correct in dismissing the lawsuit under the terms of that statute.
The Justice Department announced October 28, 2009 that it reached a settlement to resolve its suit filed on behalf of former Utah Army National Guardsman and current Air Force Reservist Matthew T. Denning against Stonescape Pavers, LLC. The settlement must be approved by the federal court in Las Vegas. The Department’s complaint, filed in June 2009, alleges that Stonescape violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by terminating Denning during his statutorily protected reemployment period. Under the terms of the settlement, embodied in an agreement that has been submitted to the court, Stonescape must provide Denning with $10,000 to compensate him for his lost wages and benefits as a result of Stonescape’s actions.
