Bridgewater Credit Union v. McCarthy (In Re McCarthy)

**What Happened** This case involved a dispute between Bridgewater Credit Union and their former employee McCarthy over a breach of contract claim. The credit union tried to collect money from McCarthy through bankruptcy court, arguing that McCarthy owed them money that shouldn't be wiped out by bankruptcy (called a "nondischargeability complaint"). McCarthy fought back against these claims. **What the Court Decided** The court sided with McCarthy, rejecting the credit union's attempt to collect the disputed debt. Additionally, when McCarthy asked for the credit union to pay his attorney's fees for having to defend against the lawsuit, the lower court initially said no. However, the appeals court reversed this decision and sent the case back, saying the lower court used the wrong legal standard when deciding whether McCarthy should get his attorney's fees paid. **Why This Matters for Workers** This ruling shows that employees can successfully fight back when former employers try to collect disputed debts, even in bankruptcy situations. More importantly, it demonstrates that when employers file weak or unsuccessful claims against former employees, the workers may be entitled to have their legal defense costs covered. This can help level the playing field when workers face expensive legal battles against their former employers.