Empowering the Future: Our Annual Scholarship Essay Contest

I.. Key legal authorities include:

Introduction – Legal Background and Issues

Discuss the legal foundations governing discrimination based on bankruptcy status. Key legal authorities include:

• 11 U.S.C. § 525 — Prohibits discrimination by governmental units (subsection (a)) and private employers (subsection (b)) solely because a person has filed for bankruptcy, been insolvent, or has not paid a discharged debt (ny-bankruptcy.com, Roemerman Law).

• Historical context: Perez v. Campbell (Supreme Court, 1971) struck down state laws that penalized bankruptcy filers, shaping § 525 protections (Roemerman Law).

• New York City and New York State local anti‑discrimination laws — NYCHRL and NYC’s Stop Credit Discrimination in Employment Act (§ 8‑102(29), § 8‑107(24)) prohibit use of credit history including bankruptcy in hiring decisions (NYC).

Define core legal issues: What constitutes prohibited discrimination under § 525 and local law? Where do protections start, and what limits remain?

II. Legal Challenges – Why Are There Disputes in This Area?

Explore contested questions and real‑world friction points:

1. Scope of § 525: Courts differ on whether § 525(b) prohibits private employers from making hiring decisions based on past bankruptcy filings, or only protects current employment. Some circuits allow hiring-based discrimination despite § 525(b) covering termination/hiring (St. John’s Law Scholarship Repository, Division of Human Rights).

2. Proving causation: Employers may cite unrelated reasons for adverse employment actions, which can complicate enforcement. Disentangling bankruptcy‐motivated firing or demotion from legitimate misconduct remains a challenge (Roemerman Law, Sasser Law Firm).

3. Overlap with credit history bans: Even where § 525 protects, employers in NYC and NY may still consider bankruptcy data through credit checks—an apparent conflict between federal and local laws.

4. Bankruptcy in broader civil rights context: Emerging scholarship (like Melissa Jacoby’s Unjust Debts) suggests systemic racial disparities in who files and benefits or suffers from bankruptcy, implicating civil rights and equal protection concerns (Axios).

III. Trends – Emerging Movements and Legal Resolution

Identify recent shifts in legislation, case law, and public policy:

• Legislative expansion: NYC’s 2015 Stop Credit Discrimination Act bans use of credit history—including bankruptcy filings—in hiring/employment decisions, strengthening protection beyond § 525 (NYC).

• Judicial divergence: Circuit splits remain on whether § 525 covers pre‑employment screening. Some circuits exclude hiring decisions; others interpret broadly. There is no Supreme Court resolution yet (St. John’s Law Scholarship Repository, United States Courts).

• Increased enforcement and awareness: Employees have begun filing EEOC or NYCHRL claims when terminated or not hired after bankruptcy filings. Agencies scrutinize the correlation between filing and adverse action more closely (Derek Smith Law Group).

• Critical scholarly framing: Legal academics and civil rights advocates emphasize how bankruptcy intersects with racial and economic inequality, advocating for reforms that expand access to bankruptcy relief and mitigate disparate impact (Axios).

IV. Essay Questions

Below are four to six possible essay prompts. Each is suitable for a 2,500‑word analysis. State which question(s) you select when writing your essay.

1. Question 1: Analyze the legal scope and limits of 11 U.S.C. § 525. Should its protections extend explicitly to hiring decisions? Evaluate circuit splits and recommend a path forward.

2. Question 2: How do local laws such as the NYC Stop Credit Discrimination Act and NYCHRLinteract with federal § 525 protections? Should federal law be amended to close gaps and harmonize with state/local anti‑credit‑check restrictions?

3. Question 3: Consider a hypothetical: A private New York employer ends the candidacy of an applicant immediately after discovering a recent bankruptcy. Outline the legal claims available (federal § 525, NYCHRL, EEOC), and assess the employer’s likely defenses.

4. Question 4: Discuss the policy and civil rights implications of current bankruptcy anti‑discrimination law. Does the existing regime adequately address racial and socioeconomic disparities raised by critics like Jacoby? Propose meaningful reforms.

5. Question 5: Evaluate whether employers’ use of bankruptcy information via consumer credit reports should be categorically banned or allowed with restrictions. What balance should courts and legislatures strike between employer informational interests and debtor privacy/protection?

6. Question 6: Trace the historical development of protections against bankruptcy discrimination—from Perez v. Campbell (1971) to § 525’s adoption, and the emergence of local anti‑credit laws. How has legal interpretation evolved, and what lessons does that history hold for future reform?

Summary

This frames the intersection of bankruptcy law and employment discrimination, centering on § 525, local credit history bans, judicial interpretations, and broader policy debates. You may pick one or more of the above questions. Be sure to:

• Use legal citations (statutes, cases, regulations).

• Take a clear position and support it with authority and policy reasoning.

• Briefly define your chosen essay question(s) at the outset.