Recently I received an email from a prospective client who works for a banking institution. His income is partially commissioned based and with the downturn in the real estate market, he has seen a significant decrease in take home pay. With the pay reduction he is not able to pay his bills and wants to file a bankruptcy.
My prospective client told a friend about his plans and the friend told her boss who is a senior executive for another financial institution. According to the "friend," her boss says that if my prospective client files a bankruptcy, he (the boss) will personally call my client’s boss to tell him about the filing.
My prospective client fears that he could lose his job or that his future prospects with his company could be in jeopardy. He also wants to know if he has any recourse against his friend’s boss, or perhaps against his own company if he does file bankruptcy and ends up losing his job.
Here are my thoughts: first, I think that the overriding lesson here is to be very careful about discussing your finances with anyone unless you are certain that the other person can be trusted. I can’t imagine why the friend felt it necessary or appropriate to discuss my client’s very personal financial matter with her boss, or why she felt compelled to identify my client in that discussion. This friend doesn’t sound like much of a friend to me.
With regard to the friend’s boss, I don’t think that my prospective client would have much recourse. Bankruptcy is a public record so I don’t think that there is any privacy problem here. There is a cause of action for "tortious interference with a business relationship" but I think this would be a long, and possibly expensive roard to pursue.
With regard to her own employment, the Bankruptcy Code addresses employment security at Section 525 of the Bankruptcy Code provides that "no private employer may terminate the employment of, or discriminate with respect to employment" against a debtor. The issue, of course, is that most employers are not going to say that a bankruptcy is the reason why an employee was terminated or not given a promotion. This is especially true for debtors employed in a financial industry job.
I suppose that in my prospective client’s situation she could wait several weeks or months prior to filing with the hope that her friend’s boss might forget his threat, she could go to her boss to bring up the subject proactively to guage his reaction, or she could contact a lawyer and have the lawyer draft a threatening letter to be sent to the friend’s boss advising him that if he opens his mouth, she will sue him for tortious interference with a business relationship.
It is unfortunate that my prospective client has put himself in this situation – and it is really too bad that his big mouthed friend opened her big mouth to her nosy-body boss. My prospective client has some difficult decisions to make.