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March 27, 2015
You may be wondering whether your employer may terminate you because your paychecks are garnished pursuant to a court order. The answer is that this is a classic instance of “good-news, bad-news.”
On the one hand, Federal and Georgia Law alike expressly prohibit an employer from discharging an employee by reason of the fact that his or her earnings are subject to garnishment. See 15 U.S.C § 1674; O.C.G.A. § 18-4-7. Therefore, technically the answer to the question is “no,” an employee may not be terminated due to his or her paychecks being garnished.
There are limitations, however. For example, both the Federal and Georgia statutes prohibit termination by reason of garnishment only to the extent of “one indebtedness.” Therefore, the law does not prohibit an employer from terminating an employee who has multiple wage garnishments based upon more than one indebtedness. Furthermore, very little case law exists relating to the Georgia statute because although terminations by reason of wage garnishment are prohibited under the Georgia Code, courts have interpreted this law so as not to afford wrongfully terminated employees a civil cause of action. See, e.g., Mattox v. Yellow Freight Sys., Inc., 243 Ga. App. 894, 895, 534 S.E.2d 561 (2000) (citing O.C.G.A. § 18-4-7 as an example of a statute that “proscrib[es] employer conduct [but] do[es] not provide employees with an express cause of action”).
Courts are split on whether the Federal statute (the Consumer Credit Protection Act) provides a private right of action to employees improperly terminated by reason of garnishment for a single indebtedness. Multiple cases have held that aggrieved employees may sue and recover under the Federal statute. See, e.g., Ellis v. Glover & Gardner Const. Co., 562 F. Supp. 1054 (M.D. Tenn. 1983); Maple v. Citizens Nat. Bank & Trust Co., 437 F. Supp. 66 (W.D. Okla. 1977); Stewart v. Travelers Corp., 503 F.2d 108 (9th Cir. 1974). Meanwhile, other courts have held that the Federal statute does not allow an aggrieved employee to institute a private lawsuit. See, e.g., LeVick v. Skaggs Companies, Inc., 701 F.2d 777 (9th Cir. 1983); McCabe v. City of Eureka, Mo., 500 F. Supp. 59 (E.D. Mo. 1980); Smith v. Cotton Bros. Baking Co., 609 F.2d 738 (5th Cir. 1980).
Garnishment is an important tool that allows prevailing parties (judgment creditors) to collect on judgments issued by courts. See, O.C.G.A. § 18-4-60. After obtaining a judgment, the judgment creditor files a separate judicial action known as a garnishment proceeding, in which the court orders that the losing party’s (judgment debtor’s) employer withhold wages and pay them directly to the creditor. Garnishments are used in a wide variety of instances, including, but not limited to, collection of income taxes, child support, alimony, student loans, medical bills, and even consumer credit card debt.
As important as garnishments are for collection of debts arising from judgments, the Georgia and United State Legislatures have likewise found it important to protect employees from termination by reason of wage garnishment. However, it is curious that this “protection” would prohibit the employee’s termination, but not provide the employee any ability to file a lawsuit as a result of the termination. In order to truly protect employees from improper termination by reason of garnishment, the Legislatures must clarify that the statute should create a private right of action.