A Florida worker applied for the manager’s position at a nearby site of a restaurant chain. After a 2-day tryout, he was given a conditional offer of employment. Accepting the offer, he gave his former employer 2 weeks’ notice. But before he could begin work at the restaurant, the employer withdrew the offer, citing bad news in his credit report.

What happened. “Miller” wanted to move from a managerial position at a Starbucks to one at Toojays Restaurant at The Villages. And, things looked good for him—until his prospective employer discovered that Miller had declared personal bankruptcy at some point (the opinion in this case doesn’t say how long before his application the filing occurred). On that basis alone, Toojays denied Miller the promised job.

He sued, charging, among other things, bankruptcy discrimination—“discriminatory nonselection, termination, and nonpayment of wages under the Bankruptcy Act.” He also asked for unpaid and lost wages under Florida contract law and minimum wage under the federal Fair Labor Standards Act. A federal district court judge reviewed “numerous” defenses offered by Toojays for its decision and ruled against Miller. But Miller complained to the court that at least two of the defenses were flawed, and he moved to have them stricken from the record. The judge agreed to hear Miller’s further arguments.

What the court said. Toojays’ “defense number 6” was that some 10 days after accepting the conditional offer, Miller had signed both his agreement to a thorough background check including credit history and his agreement to release Toojays from any liability for its decisions based on that check. Miller argued that earlier cases had been decided for plaintiffs in “prospective waivers of bankruptcy discrimination claims.” The judge found such case law scarce and refused to strike the defense.

Miller also asked that defense #7 be stricken: He cited a provision of a particular federal law reading 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.” But the judge pointed out that Toojays was not yet Miller’s employer when it withdrew its offer. So Miller’s case failed again. Myers v. Toojay’s Management Corp., U.S. District Court for the Middle District of Florida, No. 5:08-cv-365-Oc-10GRJ (4/7/09).

Point to remember: Employers that withdraw offers based on poor credit rather than on conviction for a felony should have solid reasons for doing so based on the relationship between job duties and a good credit history. We hope Toojays could cite business-related reasons for its decision.