Interesting twist on hostile work environment claims and bankruptcy

You do not see this very often. A plaintiff claiming she suffered a hostile work environment lacks standing to pursue that claim because she did  not mention that claim in her bankruptcy petition. The Court of Appeals also finds that plaintiff cannot win her constructive discharge claim, either.

The case is Black v. Buffalo Meat Service, a summary order issued on July 22. When you file a bankruptcy petition, you have to list your assets. A legal claim is an asset. "All legal or equitable interests of the debtor in property as of the commencement of the case." That's from the bankruptcy law. The bankruptcy trustee then has ownership of the claim, not you, as a bankruptcy debtor. The twist here is that post-petition property will belong to the bankruptcy estate "if it is sufficiently rooted in the pre-bankruptcy past." 

The Court of Appeals (Livingston, Cabranes and Park) says Plaintiff cannot pursue her hostile work environment claim because she claims the work environment spanned her "entire employment," from 2005 through 2008. Since plaintiff's bankruptcy petition was granted in June 2009, less than one year before she resigned, and she did not list that claim in the bankruptcy petition, that claim is part of the bankruptcy estate. She lacks standing to bring that claim. The trustee, instead, has standing. 

She also asserts a constructive discharge claim. But these claims are hard to win. The Court wants you to show that management intentionally created an intolerable work atmosphere that forced you to quit involuntarily. People do win these cases, but that is a high evidentiary burden for plaintiffs. 

 Plaintiff's primary evidence on this claim is that a coworker used a racial slur in referring to her children. That is awful, but the Court notes that "we have have never held that the one-time use of a racial slur by a supervisor or a subordinate by itself supports a claim for a hostile work environment." Since a coworker made the racial slur, and not a supervisor, that makes her case even less compelling, notwithstanding case law holding that a racial epithet by a supervisor "can quickly alter the conditions of employment." In any event plaintiff cannot show that management's response to the slur was negligent or ineffective. While plaintiff suggests that management's response was ineffectual, that does not mean that management intended to force her to resign through its response.