Breaking with a Sixth Circuit decision to the contrary, in a
March 2021 decision in
Stewart v. Holland, the District
Court for the Western District of Pennsylvania held that unfair
labor claims brought by the Department of Labor against a debtor
under the Fair Labor Standards Act ( FLSA ) were not
barred by the automatic stay but could instead proceed under the police powers exception.
A debtor s bankruptcy filing triggers the automatic
stay, which immediately enjoins, among other things, the
commencement and continuation of most litigation against the
debtor.
2 The purpose of the automatic stay
is to afford the debtor breathing room either to