Big Changes to Colorado Employment Law

June 20, 2023

Earlier this month Governor Polis signed the Protecting Opportunities and Workers’ Rights (POWR) Act. The act becomes effective on August 7, and it makes significant changes to Colorado employment law. This article summarizes some of the key changes.

Workplace Harassment Claims

For many years courts have held that workplace harassment (other than quid pro quo sexual harassment) must be “severe or pervasive” to be actionable under federal law or the Colorado Anti-Discrimination Act (CADA). However, the POWR Act jettisons that standard and states that the alleged harassment “need not be severe or pervasive to constitute a discriminatory or unfair employment practice” under CADA. Under the POWR Act, the alleged harassment needs to be offensive to the person brining the harassment claim and “objectively offensive to a reasonable individual who is a member of the same protected class.” This new standard will make it easier for claimants to successfully assert claims of workplace harassment.

As part of its rationale for this approach, the General Assembly opines that the “severe or pervasive standard…does not take into account the realities of the workplace or the harm that workplace harassment causes.” That statement should seem peculiar to anyone who has held a job for any appreciable length of time. The “severe or pervasive” standard is an acknowledgment that potentially offensive remarks and conduct – intentional or not – are not uncommon in the workplace and employers should not be held liable for all such offenses. Moreover, it would be unusual for harassment that is not severe or pervasive to produce substantial or lasting harm.

However, the amendments also state that “petty slights, minor annoyances, and lack of good manners do not constitute harassment” unless, “under the totality of the circumstances,” they meet the standards set forth in the statute.

Although the alleged harassment does not have to be severe or pervasive, it must fall within one of the following three categories:

1. Submission to the conduct or communication is explicitly or implicitly made a term or condition of the individual’s employment;

2. Submission to, objection to, or rejection of the conduct or communication is used as a basis for employment decisions affecting the individual; or

3. The conduct or communication has the purpose or effect of unreasonably interfering with the individual’s work performance or creating an intimidating, hostile, or offensive working environment.

Affirmative Defenses for Harassment Claims

The POWR Act provides that, when an employee proves that a supervisor unlawfully harassed the employee, the employer can raise an affirmative defense only if it can establish all of the following.

1. The employer has established a program that is reasonably designed to prevent harassment, deter future harassers, and protect employees from harassment. The employer’s program satisfies this requirement if the employer can demonstrate that (a) it takes prompt, reasonable action to investigate or address alleged discriminatory or unfair employment practices and (b) it takes prompt, reasonable remedial actions, when warranted, in response to complaints of discriminatory or unfair employment practices.

2. The employer has communicated the existence and details of the program to its supervisory and nonsupervisory employees.

3. The employee unreasonably failed to take advantage of this reporting program.

A comment about item 1, above, is in order. The employer’s program must be reasonably designed to prevent harassment. But note that employers demonstrate they have such a program by showing that they take appropriate action to investigate and correct any employment practice that is discriminatory or unfair under CADA, not just unlawful harassment.

Every employer should have a policy addressing harassment. It should be communicated to all employees, and it should be enforced. But employers should take timely and appropriate action in the event of any alleged or suspected violations of CADA or federal anti-discrimination laws.

Marital Status as a Protected Category

Since 1989 CADA has prohibited employers from firing or refusing to hire a person solely because that person is married to, or plans to marry, another employee of the employer. That prohibition does not apply to employers with 25 or fewer employees. Furthermore, it does not apply where:

(A) One spouse directly or indirectly would exercise supervisory, appointment, or dismissal authority or disciplinary action over the other spouse;

(B) One spouse would audit, verify, receive, or be entrusted with moneys received or handled by the other spouse; or

(C) One spouse has access to the employer’s confidential information, including payroll and personnel records.

The POWR Act modifies the statute by adding refusal to promote an employee based on marital status. But more significantly, the POWR Act adds marital status to the list of protected categories. Thus, any employment action that would be discriminatory or unfair based on other protected categories (race, religion, age, disability, etc.) will also be unlawful if taken on account of the person’s marital status. However, the statutory exceptions listed above remain.

Non-Disclosure Agreements

The POWR Act adds a new section to CADA that imposes specific requirements on non-disclosure agreements. A non-disclosure agreement or clause that limits the ability of an employee or prospective employee to disclose or discuss any alleged discriminatory or unfair employment practice is void unless it meets the following criteria:

1. It applies equally to all parties;

2. It expressly does not restrain the employee or prospective employee from disclosing the underlying facts of any alleged discriminatory or unfair employment practice;

3. It expressly states that disclosure of the underlying facts of any alleged discriminatory or unfair employment practice does not constitute disparagement;

4. It includes a condition that if the agreement contains a non-disparagement provision and the employer disparages the employee or prospective employee to a third party, the employer may not seek to enforce the non-disparagement or non-disclosure provisions or seek damages from the employee violating those provisions;

5. Any liquidated damages provision in the agreement does not constitute a penalty or punishment and must provide for an amount of damages that is reasonable and proportionate in light of anticipated actual damages, and is not punitive; and

6. The agreement contains an addendum, signed by all parties, attesting to compliance with these requirements.

Failure to comply with the statutory requirements can subject the employer to actual damages and a penalty of $5,000 per violation. Each non-compliant agreement constitutes a separate violation. Merely presenting a non-compliant agreement to a worker constitutes a violation of the statute.

Record-Keeping Requirements

The POWR Act requires employers to preserve personnel or employment records for at least five years. The statute includes a broad description of what constitutes “personnel or employment records.”

All complaints of discriminatory or unfair employment practices are to be kept in “an accurate, designated repository.” Records of those complaints must include the date of the complaint, the identity of the complainant (if not anonymous), the identity of the alleged perpetrator, and the substance of the complaint.

NOTE: The information in this article (and all others on this website) is for informational purposes only. It does not constitute legal advice or a legal opinion.