In re Norbert MAJEWSKI; In re Muriel Majewski, Debtors, William J. Leonard, Trustee-Appellant, v. St. Rose Dominican Hospital, Appellee, 310 F.3d 653

Opinion by Chief Judge SCHROEDER; Dissent by Judge REINHARDT ■ SCHROEDER, Chief Judge: Debtor Norman Majewski incurred large medical expenses at the hospital where he was employed, and he did not pay them. After repayment negotiations failed, he told the hospital he intended to file for bankruptcy, and the hospital fired him before he did so.

The trustee in Majewski’s bankruptcy, William Leonard, now contends that the firing violated the bankruptcy code provision barring termination of an individual who “is or has been” a bankruptcy debtor “solely because” the individual is or has been a debtor in bankruptcy. 11 U.S.C. § 525(b). The bankruptcy court dismissed the trustee’s claim against the hospital for violation of the statute, holding that the statute did not protect persons who had not yet filed for bankruptcy. The district court affirmed. We affirm as well.

The anti-discrimination provision of the bankruptcy code provides: No private employer may terminate the employment of, or discriminate with respect to employment against, an individual who is or has been a debtor under this title, a debtor or bankrupt under the Bankruptcy Act, or an individual associated with such debtor or bankrupt, solely because such debtor or bankrupt— (1) is or has been a debtor under this title or a debtor or bankrupt under the Bankruptcy Act; (2) has been insolvent before the commencement of a case under this title or during the case but before the grant or denial of a discharge; or (3) has not paid a debt that is dis-chargeable in a case under this title or that was discharged under the Bankruptcy Act. 11 U.S.C. § 525(b).

In this appeal, Leonard contends that we should interpret the provision of subparagraph 1 liberally to apply to debtors before they file a bankruptcy petition. In support of his argument, Leonard calls our attention to our cases interpreting the anti-retaliation provisions of remedial statutes such as Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., and the Fair Labor Standards Act, 29 U.S.C. § 201 et seq.

We have interpreted those statutes to protect persons who report illegal conduct to government agencies or complain about such conduct to their employers, even though they have not yet instituted a formal proceeding. For example, in Lambert v. Ackerley, we held that the FLSA’s anti-retaliation provision protected an employee who protested about the failure to pay overtime wages. Lambert v. Ackerley, 180 F.3d 997, 1001 (9th Cir.1999) (en banc). We so held even though the language of the relevant FLSA provision does not seem to expressly extend to persons who have not actually filed a formal complaint.

That statute provides that it is unlawful: [T]o discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to this chapter, or has testified or is about to testify to in any such proceeding, or has served or is about to serve on an industry committee. 29 U.S.C. § 215(a)(3). We pointed out, as the Supreme Court has noted, that the FLSA relies for its enforcement on the complaints of employees, rather than on monitoring payroll records or other government surveillance.

Lambert, 180 F.3d at 1003 (quoting Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 292, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960)). In line with the remedial purposes of the statute, we therefore held that the anti-retaliation provision should be interpreted broadly, to give effect to the statute’s remedial purpose. Id. (quoting Tennessee Coal, Iron & R. Co. v. Muscoda Local No. 123, 321 U.S. 590, 597, 64 S.Ct. 698, 88 L.Ed. 949 (1944)). In so doing, we agreed with six of the seven other circuits to address the issue. Id. at 1003.

We also noted that other courts had interpreted the anti-retaliation provisions of other remedial statutes equally broadly, in order to facilitate the enforcement of those statutes, which also rely on employee complaints about employer misconduct. Id. at 1006-07 (citing cases involving the Federal Mine Health and Safety Act, the Federal Railroad Safety Act, and the Clean Water Act). By protecting complaining employees’ jobs, we intend to encourage reports of illegal activity. The bankruptcy context of this case is very different.

While we encourage reporting of statutory violations, we do not wish to encourage persons to file for bankruptcy or to threaten bankruptcy. We wish only to protect those persons who have invoked the bankruptcy law’s protections to obtain a fresh start. Sliney v. Battley (In re Schmitz), 270 F.3d 1254, 1258 (9th Cir.2001). The formal act of filing is more significant in bankruptcy than in the other contexts relied upon by the dissent. Filing a petition in bankruptcy triggers an automatic stay of actions against the debtor, the creation of an estate, and the appointment of a trastee.

See 11 U.S.C. §§ 362, 541 and 701. The dissent relies heavily on the legislative history from a 1983 bankruptcy bill that was never enacted. However, the statute enacted in 1984 — the one now before us — is clear in its exclusive application to anyone who “is or has been” a debtor in bankruptcy. See 11 U.S.C. § 525(b). We therefore interpret the statute according to its terms, as the Supreme Court has instructed. See U.S. v.

Ron Pair Enters., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) (in interpreting bankruptcy statutes, if “the statute’s language is plain, ‘the sole function of the courts is to enforce it according to its terms’ ”). “[W]e are not free to substitute legislative history for the language of the statute.” Aronsen v. Crown Zellerbach, 662 F.2d 584, 588 & n. 7 (9th Cir.1981) (citations omitted). We also express our suspicion that the legislative history upon which the dissent relies inaccurately reflects the intent of the bill’s drafters.

It is unlikely that Congress would have chosen the words “is or has been” to mean “has been or will be.” Compare Omnibus Bankruptcy Improvements Act of 1983 (OBIA), S. 445, 98th Cong. § 352 (1983) and S.Rep. No. 98-65, at 80 (1983). In Arden v. Motel Partners, 176 F.3d 1226, 1229 (9th Cir.1999), we explained that bankruptcy provisions will be interpreted according to their plain meaning “except in the rare cases[in which] the literal application of a statute will produce a result demonstrably at odds with the intention of its drafters.” This is not such a case.

The bankruptcy provision at issue in this case forbids firing an employee solely because that person “is or has been” a debtor. 11 U.S.C. § 525(b). At the time the hospital fired Majewski, he was not, and had not been, a debtor in bankruptcy. The bankruptcy statutes therefore did not forbid the hospital from firing him. We reject Leonard’s proposed reading of the statute, which is both inconsistent with the statute’s text and incompatible with its purpose.

Bankruptcy’s fresh start comes at the cost of actually filing a bankruptcy petition, turning one’s assets over to the court and repaying debts that can be paid. One is not entitled to the law’s protections, including employment security and the automatic stay of litigation, before being bound by its other consequences. We therefore affirm the bankruptcy court’s dismissal of Leonard’s action against the hospital. AFFIRMED.