I've seen the discussion on bankruptcy and hiring a person. But what about an employee who files for bankruptcy. In most circumstances, a bank would ue some excuse not to hire an individual with one, can we use it as a reason for dismissal especially if the employee has certain access rights?

I'm not sure about dismissing someone due to bankruptcy, depending on cause (I think there is a difference between issues such as medical reasons vs bad judgement) but you definitely have to notify your bonding company if you find out about it. Depending on your bonding company, they may or may not be bondable and you would have to dismiss them. If the employee causes a direct loss to the bank due to the filing (i.e., had outstanding loans that were charged-off) I would most likely explore all avenues for dismissal. If you are a National Bank you can fire without cause at any time.

Randy, your answer raises several questions. Please enlighten me.

Our financial institution bond protects the bank in the case of employee dishonesty, and certainly any losses due to dishonesty need to be reported. But the employees themselves are not bonded as they are in some other industries. Furthermore, I've never been asked about my employee screening at any level in any bond application. What would raise the obligation to notify them of an employee bankruptcy?

Also, you state that a National Bank can fire without cause. While our employees have employment-at-will status, don't we still need to be very careful to avoid wrongful termination actions?

Your personnel policy better address the termination of employess dismissed for bankruptcy even if your in an at will state. You may be hard pressed by the courts to explain the choice otherwise. Bankruptcy does not a bad employee make. You may want to find out what brought on the bankruptcy, issues like a divorce, a major health problem, the loss of employment of a spouse, or additional care for an aging parent. Many financial institutions are not requiring employees to disclose bankruptcy if it's filed after employment. Someone who has filed bankruptcy may be less desperate for funds than one who is sinking in too much debt, who is looking to find extra funds to stay ahead. They just want to get their life back in order.

You need to read your bond policy. Many policies require that the bank perform background checks prior to hiring and also notify the bond company when any number of things about a specific employee are uncovered. While you can never prevent someone from sueing you, case law is on your side if you are a national bank due to the National Bank Act, unless you have violated the employees rights under another discrimination law.

How would the bank know that you filed bankruptcy if you had no loans with the bank?

The old and ever present grapevine or if you monitor filings in the local business paper. It is public information.

Yes, there are many sources for bankruptcy information since it is public record. My bank actually receives a monthly booklet that has all public filings.

This may be one of the "stupid" questions of mine, but, why are these things public record?

I'm not sure exactly but it probably has something to do with the court system. Isn't everything public information that goes through the system (i.e. real estate sales, arrests, etc.)?

It's public record and is printed in the newpapers, etc. so that all creditors can be notified of the filing so if they have a creditor's claim, they can become part of the proceedings.

I ask the same question. Heres a little background http://www.cdt.org/privacy/pubrecs/pubrec.html

I hate to go to OT here, but I have a question. Banks generally frown on employees who do not handle their personal accounts appropriately sometimes resulting in termination. But for the most part this decision comes from activity on accounts at their own f/i. I know several employees who do not have an account at their f/i of employment but move funds on payday to another f/i. It may be very unlikely that adverse activity on an employees account at another f/i will become known by their employer and is not a matter of public record. Could their be a problem if one employee is reprimanded/terminated for such activity on accounts at their place of employment when another employee may have the same situation elsewhere?

Most banks that I have recently worked with addressed this in the employee handbook in the following manner. Employees were expected to maintain thier account at the bank in financial order. If they didn't, their account would be closed (under the same circumstances that customers' accounts would be closed). No special requirements were placed on an employee and unless there was fraud involved, it did not reflect on their job performance. Basically, the banks developed policies to treat employee accounts exactly the same as other customer accounts. When I first started, the bank in which I worked had a policy that if I overdrew my account twice in a sixth month period it was grounds for dismissal. I think those days are gone.

Under Federal bankruptcy law, an employer can not terminate an employee in retaliation for filing a personal bankruptcy. If the employer terminates the employee for filing a bankruptcy, the employee may be entitled to reinstatement, back pay, and payment of attorney's fees.

You should also check with your bank's counsel before dismissing someone for filing bankruptcy. A common phrase is that someone files for "protection" under the bankruptcy laws. The laws may prohibit you from terminating a person for filing bankruptcy.

See my comments above. You can't terminate them for filing.