In May, 2011 a job applicant sued Toojay’s Mgmt. Corp, a private employer, when after the interview process the employer rescinded an offer of employment after finding out the applicant filed for bankruptcy in the past.

The applicant claimed that the company’s actions violated a section of the Bankruptcy Code, which 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…”

The court rejected the applicant’s claim, since the applicant was not yet an employee and the company was simply reacting on facts provided by a background check. Read more about this case.