Credit Union (the “Defendant”) seeks summary judgment on the complaint filed against it by the Debtor (“Plaintiff”). The complaint alleges a cause of action under §525(b) of the Bankruptcy Code, which prohibits discrimination by private employers against their employees based solely on an employee’s bankruptcy, insolvency, or failure to pay a debt that is dischargeable or that was discharged in a case under the Bankruptcy Code. The Defendant contends that summary judgment is appropriate because it terminated the Plaintiff’s employment based upon allegations of check kiting and not her bankruptcy. The Plaintiff asserts that the court should deny summary judgment because the check kiting allegations are untrue.
From 2008 to 2016, the Plaintiff worked for the Defendant and reliably received positive employee performance evaluations from 2009 to 2016. On February 5, 2016, however, Bayer Heritage Federal Credit Union, a third party financial institution, informed the Defendant of “suspicious activity” suggesting the Plaintiff was engaged in check kiting. According to the Defendant, it subsequently initiated an internal investigation based upon the communication from Bayer Heritage. Notably, this assertion is uncorroborated by anything in the record on summary judgment. For instance, there is no exhibit indicating when such investigation began, if at all, or what the investigation entailed.
On March 28, 2016, the Plaintiff filed a Chapter 7 bankruptcy petition. As of that date, the Plaintiff owed the Defendant a total of $208,000.00 for ten loans, both secured and unsecured. According to the Plaintiff, the Defendant directed her to teach other employees her job upon learning of her bankruptcy, but the Defendant disputes that uncorroborated fact. In any event, on April 5, 2016, the Defendant placed the Plaintiff on unpaid leave and hired an entity known as the West Virginia League Services Corporation to conduct an audit of the Plaintiff’s activity. The West Virginia League Services Corporation provided the Defendant with a summary report on April 30, 2016. The report noted numerous banking transactions that resembled check kiting activity on the Plaintiff’s part. On May 5, 2016, the Defendant informed its insurer, CUNA Mutual Group, of both its findings from its internal investigation and the findings of the West Virginia League Services Corporation. On the following day, CUNA Mutual Group informed the Plaintiff that her eligibility for insurance coverage for fraudulent acts was terminated, and the Defendant subsequently terminated the Plaintiff’s employment based upon the allegations of check kiting, which the Defendant found in violation of its written policy regarding employee fraud.