Fiorani v. Caci
| Decision Date | 06 February 1996 |
| Docket Number | Civil Action No. 95-1536-A. |
| Parties | Rosario A. FIORANI, Jr., Plaintiff, v. CACI, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
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Rosario A. Fiorani, Jr., Alexandria, Virginia, plaintiff pro se.
Allen S. Rugg, Robert L. Magielnicki, Alan D. Strasser, Kutak Rock, Washington, DC, for defendant CACI.
Richard Wexell, Fairfax, Virginia, Matthew S. Watson, Washington, DC, for defendant Woodside Employment Consultants.
Section 525(b) of the Bankruptcy Code, 11 U.S.C. § 525(b), prohibits certain forms of employment discrimination against persons who have filed for bankruptcy. The question here presented is whether this provision applies to a private employer's discriminatory refusal to hire.
Plaintiff Rosario Fiorani's nineteen-count complaint alleges nineteen instances of discrimination by two corporate and four individual defendants. Named as defendants are Woodside Employment Consultants, CACI, Inc., Barbara Ibraham, Traci Bowles, William Clancy, and Kathleen Tresniak. Each count of the Complaint alleges a separate violation of 11 U.S.C. § 525(b). Because the matter is before the Court on a threshold motion to dismiss the complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P., the facts alleged in the complaint must be accepted as true. Scheuer v. Rhodes, 416 U.S. 232, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Martin Marietta Corp. v. International Telecomm. Satellite Org., 991 F.2d 94 (4th Cir.1992).
According to Count I, defendant Woodside Employment Consultants ("Woodside") supplies workers to companies on a temporary basis. On October 10, 1994, Woodside arranged for Fiorani to work for CACI on a government contract. On November 7, 1994, CACI asked Fiorani to complete the paperwork necessary to obtain a security clearance, allegedly "for permanent employment" with CACI. The form inquired, inter alia, whether Fiorani had filed for bankruptcy in the last five years. Fiorani truthfully responded that he had. On November 13, he was summoned to the office of defendant Barbara Ibraham, Project Supervisor at CACI, and asked about the bankruptcy filing. After the meeting, he alleges he was terminated from CACI and that Ibraham told him he was terminated because of the bankruptcy.
In Count II, Fiorani alleges that on January 5, 1995, he received a call from CACI soliciting him for a position as a para-legal on a different government contract. He was prescreened by being asked eight questions, none of which related to bankruptcy. He was then told he was approved for a paralegal position and could attend what the complaint terms "a CACI job fair."1 At the "job fair" on January 14, 1995, Fiorani was again interviewed. After the interview, Fiorani alleges he saw the interviewer sign her name to his "hire sheet," which he claims effected his hiring by CACI. He was then sent to defendant Traci Bowles, CACI's Security Manager. Upon reviewing Fiorani's credit report, Bowles noticed his previous bankruptcy filing, and when he admitted that he had indeed filed for bankruptcy, Fiorani alleges that she terminated him.2
Count III alleges that on March 20, 1995, Fiorani was called by defendant Kathleen Tresniak of CACI, again soliciting him for a position as a para-legal, and the two arranged a time for an interview. On March 21, however, Tresniak notified Fiorani that he was no longer being considered for the position because he had previously been denied a security clearance. Count III also includes allegations that defendant William Clancy made threatening and intimidating responses to Fiorani's letter and telephone calls,3 and made false and misleading misrepresentations to him.4
In Counts IV-XIX, Fiorani alleges in general terms the existence of sixteen other instances of discrimination by defendants, but does not identify any of the dates, places, or persons involved.5
Before the Court are (1) defendants' motions to dismiss all counts; and (2) plaintiff's "motion to set aside and dismiss defendants' motions."
The thrust of many of Fiorani's allegations is that defendants violated § 525(b) by refusing to hire him because of his earlier bankruptcy. At this threshold stage, therefore, the principal question presented is whether 11 U.S.C. § 525(b) applies to a private employer's refusal to hire an applicant because that applicant had previously filed for bankruptcy. Analysis properly begins with the language of the statute, which provides, in pertinent part, 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 or a debtor or bankrupt under the Bankruptcy Act . . . solely because such debtor or bankrupt . . . is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act. . . .
11 U.S.C. § 525(b).6 The statute's explicit reference to discrimination with respect to termination leaves no doubt that terminations are covered. But notably absent from the statute is any explicit reference to discrimination in hiring. This omission would be conclusive were it not for the statute's general reference to discrimination "with respect to employment" against one who has filed for bankruptcy, which reference arguably furnishes a basis for stretching the statute to cover hiring. Yet, this argument seems to stretch the statute too far, for if the reference to discrimination "with respect to employment" is read to cover hiring, it would, for the same reasons, seem that the phrase was also meant to reach termination. But it is quite apparent that this is not so, given that statute's framers found it necessary to make separate, explicit reference to termination. More likely, the phrase discrimination "with respect to employment" refers neither to hiring nor termination, but to other terms and conditions of employment.
In any event, the statute includes a more compelling clue to its scope. The language of § 525(b) in issue here was added by Congress in 1984. It was antedated by § 525(a), which Congress enacted in 1978. A comparison of the two provisions is instructive on the issue at bar. Subsection (a), which applies only to governmental units, states that a governmental unit may not "deny employment to, terminate the employment of, or discriminate with respect to employment against" a debtor or bankrupt. 11 U.S.C. § 525(a) (emphasis added).7 Thus, this portion of § 525 explicitly includes a prohibition against discrimination in hiring on the basis of an applicant's bankruptcy filing. By contrast, § 525(b), the private-employer provision, omits the prohibition of "denying employment" on the basis of an applicant's bankrupt status. This is compelling evidence that § 525(b) does not reach hiring, for it is well established that where "Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acted intentionally and purposely in the disparate inclusion or exclusion." Russello v. United States, 464 U.S. 16, 23, 104 S.Ct. 296, 300, 78 L.Ed.2d 17 (1983) (quoting United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir.1972)); see also United States v. Wooten, 688 F.2d 941, 950 (4th Cir.1982). Indeed, some courts have held that such a rule is particularly appropriate when construing the Bankruptcy Act, "a detailed and calculated statutory scheme." See, e.g., Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194 (6th Cir.1983) (); General Motors Acceptance Corp. v. Bell (In re Bell), 700 F.2d 1053 (6th Cir.1983) (); Waldschmidt v. Ranier (In re Fulghum Construction Co.), 706 F.2d 171 (6th Cir.1983) (). This rule of construction, applied here, points persuasively to the conclusion that § 525(b) was not intended to subject private employers to liability for choosing not to hire an applicant on the basis of his bankruptcy status.
Pertinent authority is scant, but what little there is supports this conclusion. In Madison Madison Int'l, P.C. v. Matra (In re Madison Madison Int'l, P.C.), 77 B.R. 678 (Bankr.E.D.Wis.1987), the bankruptcy court, relying in large part on the textual argument made here, held that the statute does not impose liability on private employers who refuse to hire those who have filed for bankruptcy. In re Hopkins, 81 B.R. 491 (Bankr. W.D.Ark.1987), is not to the contrary. That court held that § 525(b) "precludes the employer from refusing to hire . . . the debtor solely because of her bankruptcy, once an offer for full-time employment has been extended and accepted." Id. at 494 (emphasis added). The emphasized language makes clear that in Hopkins an employment contract had been formed, an offer of employment having been made and accepted. This sharply distinguishes Hopkins from Madison, for in Hopkins, because an employment contract had been formed, the employer terminated the person, rather than simply declined to hire her.8 In Madison, by contrast, employment negotiations between the parties were ongoing; no contract had been formed; the employer thus did not terminate the person, but simply declined to hire her.9 In sum, Madison, the sole decision directly on point, supports the conclusion reached here that § 525(b) does not reach hiring actions.
One commentator disagrees, summarily dismissing the text of the statute and the approach of Madison as "strictly textual." See Douglass G. Boshkoff, Bankruptcy-Based Discrimination, 66 Am.Bankr.L.J. 387 (1992). He argues instead that courts should look beyond the mere words of § 525(b) and should seek to give effect to the statute's broad purpose of preventing discrimination against debtors as reflected...
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