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Burnett v. Stewart Title, Inc. (In re Burnett)
11 U.S.C. § 525(b) does not create a cause of action against private employers who discriminate in hiring on the basis of a job applicant's bankruptcy status.
Appeal from affirmance of grant of Rule 12(b)(6) motion to dismiss for failure to state a claim.
Appellant was denied employment after a background check revealed her bankruptcy filing. She sued under 11 U.S.C. § 525(b), alleging that the employer had unlawfully discriminated against her due to her bankruptcy status. The employer’s motion to dismiss was granted. Applying basis canons of statutory construction, the Fifth Circuit held that while § 525(a) expressly prohibits governmental units from denying employment to a person on the basis of her bankruptcy status, § 525(b) does not contain that prohibition for private employers.