In re Hopkins, Bankruptcy No. ED 85-38M.
| Citation | 81 BR 491 |
| Decision Date | 07 August 1987 |
| Docket Number | Bankruptcy No. ED 85-38M. |
| Parties | In re David HOPKINS and Mary Hopkins, Debtors. |
| Court | United States Bankruptcy Courts. Eighth Circuit. U.S. Bankruptcy Court — Western District of Arkansas |
Jack Dickerson, Hot Springs, Ark., for debtors.
Joseph A. Strode, Pine Bluff, Ark., for Bank of Bearden.
A.L. Tenney, Trustee, Little Rock, Ark.
On September 24, 1985, this Court conducted a hearing on the debtors' complaint to cite the Bank of Bearden (Bank) and the Bank's president, Ricky Green, for contempt for violating 11 U.S.C. § 525, the debtor antidiscrimination statute. The Court entered its memorandum opinion on August 5, 1986, holding that the Bank had violated 11 U.S.C. § 525(b). However, the Court denied without prejudice the complaint for contempt, but allowed the debtors to amend their complaint to seek the appropriate remedy.
A hearing was held January 21, 1987, on the debtors' amended complaint. The debtors sought reinstatement of Mary Hopkins to a full-time teller position, back pay, attorney's fees and other relief for the Bank's section 525(b) violation. The Court's findings, as stated in its first memorandum opinion are adopted here, with the exception of certain changes noted below.
A brief statement of the facts is necessary. Mary Hopkins (debtor) had occasionally worked as a part-time teller for the Bank, as dictated by the Bank's needs, since 1972. In late March of 1985, she was contacted by the Bank's employee in charge of hiring, Ken Riley, about resuming her part-time teller position. The debtor was told the position could develop into full-time employment due to the imminent departure of another bank employee. The debtor began work in April, working each Monday and Friday, as well as the third day of each month.
On April 29, 1985, Mr. Riley and another employee discussed with the debtor the possibility of the debtor assuming a full-time position. The Bank had begun receiving job applications for the position. Although the parties recall the details of the conversation differently, all parties agree that the debtor was to report back to the Bank's president, Mr. Green, after she discussed the possibility of accepting the full-time position with her husband.
The debtors filed their chapter 13 petition in bankruptcy on April 29, 1985. The following Friday, May 3, 1985, the debtor reported to work in her part-time capacity. She met with Mr. Riley to inform him of her bankruptcy. The debtor testified that she accepted the full-time position at that time; the Bank's position is that nothing was mentioned regarding her full-time employment during this meeting. Later that afternoon, the debtor met with Mr. Green. The debtor claims that Mr. Green fired her at that meeting. The actual content of the conversation is in dispute, but Mr. Green did admit that he suggested to the debtor that she not work at the Bank.
In its August 5, 1986, memorandum opinion, the Court found that the Bank had hired the debtor as a full-time employee, and that the debtor had worked at least one day in a new teller position for the Bank. After reconsideration and review of the record, the Court finds that the debtor did not actually begin work as a full-time employee, although she was offered the job and properly accepted it on May 3, 1985, at the meeting with Mr. Riley. Friday, May 3, was the debtor's scheduled part-time day of work, and she was performing her normal part-time duties as teller at the time of her conversations with Mr. Riley and Mr. Green, who dismissed her. There was no testimony as to the actual starting date of the full-time position.
The Bank terminated the debtor's part-time employment solely because she and her husband filed for bankruptcy. In addition, the evidence is clear that but for the filing of bankruptcy by the debtor and her husband, the debtor would have been hired in a full-time capacity. The Court must now decide the appropriate remedy for the 11 U.S.C. § 525(b) violation.
Section 525(b) provides:
There is no provision for remedies in section 525(b). Similarly, section 525(a) and its legislative history, which concern the prevention of discrimination by a governmental agency due to the filing of a bankruptcy petition by a debtor, do not provide for any specific remedies for violating the statute. Courts have used a wide variety of remedial awards to compensate victims of governmental discrimination. See, e.g., In re William Tell II, Inc., 38 B.R. 327 (N.D.Ill.1983); In re Aegean Fare, Inc., 35 B.R. 923 (Bkrtcy.D.Mass. 1983); In re Rath Packing Co., 35 B.R. 615 (Bkrtcy.N.D. Iowa 1983). Presumably, the remedies awarded are derived from 11 U.S.C. § 105(a), which grants the bankruptcy court the power to enforce provisions of the Bankruptcy Code. In re Fasse, 40 B.R. 198 (Bkrtcy.D.Colo.1984); In re Douglas, 18 B.R. 813 (Bkrtcy.W.D.Tenn.1982).
Only one court to date has addressed the issue of the appropriate remedy for a section 525(b) private employer violation. See In re Hicks, 65 B.R. 980 (Bkrtcy.W.D.Ark. 1986). Pursuant to its power under section 105(a), the court in Hicks restored the debtor to her former bank teller position from which she had been transferred solely because she had filed bankruptcy.
Clearly, this Court has the power to fashion a remedy for the Bank's violation of section 525(b). In seeking guidance for an appropriate remedy for job discrimination by a private employer, the Court has looked to the general principles of federal job discrimination law, particularly 42 U.S.C. §§ 2000e to 2000e-17 (Title VII) and 29 U.S.C. §§ 621-634 (Age Discrimination in Employment Act (ADEA)).
Title VII and the ADEA give courts the power to grant legal or equitable relief as appropriate to effectuate the purposes of the law. The types of relief may include reinstatement, injunctions, and the payment of back pay and back benefits. One of the purposes of Title VII is to make persons whole for injuries suffered on account of unlawful employment discrimination. Albemarle Paper Co. v. Moody, 422 U.S. 405, 95 S.Ct. 2362, 45 L.Ed.2d 280 (1975). The "make whole" approach is also applied in ADEA cases. Rodriquez v. Taylor, 569 F.2d 1231 (3rd Cir.1977), cert. denied, 436 U.S. 913, 98 S.Ct. 2254, 56 L.Ed. 2d 414 (1978). In determining specific remedies, district courts must fashion such relief as the particular circumstances require in order to effect complete restitution. Albemarle Paper Co., 422 U.S. at 415-16, 95 S.Ct. at 2370-71.
It is not imperative to decide whether the debtor held a full-time or a part-time position with the Bank at the time she was terminated. Section 525(b) should not be interpreted to mean that only termination of employment is prohibited due to the filing of a bankruptcy petition by a debtor. Rather, the Court interprets the statutory language of section 525(b), which prohibits "discrimination with respect to employment against a debtor," to preclude the Bank from refusing to hire, or promote as the case may be, the debtor solely because of her bankruptcy, once an offer for full-time employment has been extended and accepted.
Except for the Bank's discriminatory actions, the debtor would have started her work on a full-time basis. The debtor, therefore, asks to be reinstated to a full-time teller position. This affirmative relief would arguably return the debtor to her "rightful place" — that is, the position she would have had but for the discrimination. However, the decision to deny or grant reinstatement lies within the sound discretion of the trial court after careful consideration of the facts of each case. Ginsberg v. Burlington Industries, Inc., 500 F.Supp. 696 (S.D.N.Y.1980); Combes v. Griffin Television, Inc., 421 F.Supp. 841 (W.D. Okla.1976). The rightful place theory of relief is recognized in Title VII cases, but there are exceptions to that remedy. Some courts have held that a victim of discrimination may not "bump" the incumbent off his job in seeking reinstatement to his former position. Local 189, United Papermakers & Paperworkers v. United States, 416 F.2d 980 (5th Cir.1969), cert. denied, 397 U.S. 919, 90 S.Ct. 926, 25 L.Ed.2d 100 (1970); Rivers v. Washington County Board of Education, 770 F.2d 1010 (11th Cir.1985). The rationale is not difficult to discern; the discrimination victim's replacement would suffer from the affirmative relief and, therefore, negate the Court's attempt to fashion a remedy that is fair to all innocent parties.
The business necessity exception to the rightful place remedy has also been applied by some courts. The courts recognized that reinstatement would be impractical, considering the disruption to the employer's personnel system and employee relations. See, e.g., Chewning v. Schlesinger, 471 F.Supp. 767 (D.D.C.1979) (); Equal Employment Opportunity Commission v. Kallir, Philips, Ross, Inc., 420 F.Supp. 919 (S.D.N.Y.1976), aff'd without op., 559 F.2d 1203 (2nd Cir.), cert. denied, 434 U.S. 920, 98 S.Ct. 395, 54 L.Ed. 2d 277 (1977) (...
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