Employee Fails to Prove Termination Due to Bankruptcy

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By Diane Davis

Sept. 4 — The former regional manager of an automotive tire company can't get his job back after claiming that his former employer discriminated against him on the basis of his bankruptcy status, a district court in New York held.

Judge Michael A. Telesca of the U.S. District Court for the Western District of New York granted the defendant employer summary judgment because there was no genuine factual dispute between the parties.

Defendant employer Kost Tire Auto Care produced evidence justifying plaintiff/debtor Andrew Gurney's discharge of employment for reasons other than his bankruptcy petition, the court said.

Bankruptcy Code Section 525(b) provides that “private employers are prohibited from discharging bankrupt employees ‘solely' because they have filed for bankruptcy,” the court said.

Gurney failed to raise a question of fact as to whether his bankruptcy was the sole reason for his termination, the court said.

Termination of Employee 

Gurney worked for Kost as a regional manager of the Rochester, New York, section of stores. The company later decided to cut Gurney's position as regional manager and put one regional manager in charge of all of the New York stores. Gurney was the most junior regional manager in terms of seniority.

Gurney argued that Kost terminated his employment directly after receiving the bankruptcy court's order directing the company to garnish his wages in the amount of $533 per week.

Kost denied this allegation, contending that Gurney was terminated for business and financial reasons and that Gurney failed to prove that his bankruptcy was the sole reason for the termination of his employment.

In support of his allegation, Gurney pointed to the fact that his termination occurred on the same day that the company received notice of his bankruptcy-related wage garnishment.

Other Contributing Factors 

The district court said that it also had to consider whether other factors played a role in the decision as well.

Kost submitted affidavits and deposition transcripts establishing some of the other factors that contributed to his dismissal, including that Gurney was the most junior regional manager at that time, the Rochester area stores were experiencing declining sales under his management, and in 2013, there were instances of missing money at the stores overseen by Gurney.

In response, Gurney contended that the business-related reasons given for his discharge were “pretextual,” but he failed to raise a material, factual dispute with respect to the reasons Kost set forth. Gurney also acknowledged that his wages were already being garnished for child support obligations and that Kost had several other current employees with garnishments related to bankruptcy, child support, or tax obligations, the court said.

As a result, the court found that the record clearly supported Kost's contention that Gurney's discharge was not due solely to his bankruptcy petition.

Harvey P. Sanders of Sanders & Sanders, Cheektowaga, N.Y., represented the plaintiff/debtor Andrew Gurney; James L. Sonneborn, and Ryan Scott Suser of Bousquet Holstein PLLC, Syracuse, N.Y., represented the defendant Kost Tire Auto Care.

To contact the reporter on this story: Diane Davis in Washington at ddavis@bna.com

To contact the editor responsible for this story: Jay Horowitz at jhorowitz@bna.com

Full text at: http://www.bloomberglaw.com/public/document/Gurney_v_Kost_Tire_Auto_Care_No_14CV6006_2015_BL_284620_WDNY_Sept