Colorado’s Job Protection and Civil Rights Enforcement Act Expands Employee Remedies, Employer Liability

 

On January 1st, 2015, the Job Protection and Civil Rights Enforcement Act (Act) will come into effect, substantially amending the Colorado Anti-Discrimination Act (CADA). C.R.S. §24-34-405. The Act applies to employment discrimination claims arising under CADA, expanding, both, the remedies available to employees and the potential liability of employers, in particular, Colorado small businesses with fewer than fifteen employees.

Employees May Seek Damages Not Previously Recoverable Under CADA
Under the Act, employee-plaintiffs may now recover front pay, back pay for up to two years, interest on back pay, reinstatement or hiring, costs, attorney’s fees, and any other equitable relief that the court deems appropriate. In addition, an employee who demonstrates that an employer engaged in intentional discrimination or unfair employment practices may recover combined compensatory and punitive damages of up to $300,000.

While all of these remedies were already available under federal law, see generally Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, and the Americans with Disabilities Act, the Colorado Act is significant because CADA extends beyond federal law, applying to certain employees and small Colorado employers not subject to current federal anti-discrimination laws. For example, only employers with fifteen or more employees are subject to Title VII, and federal anti-discrimination laws do not currently prohibit discrimination on the basis of sexual orientation. CADA addresses both issues, prohibiting employment discrimination on the basis of sexual orientation and extending to all employers, most notably, small Colorado businesses with fewer than fifteen employees.

In addition, the Act expands protections for older employees. Previously, employees over seventy years of age were precluded from filing an age-discrimination claim under CADA; the Act removes the seventy year age-limitation, thereby allowing any employee who is forty years of age or older to potentially bring an age-discrimination claim under Colorado law.

Employers Face Increased Exposure to Litigation
In light of the significant increase in remedies available to plaintiff-employees, small businesses in Colorado are likely to see an increase in employment discrimination lawsuits under CADA. However, the new law affords employers some important protections and, with thoughtful preparation, employers may limit their exposure.

First, employers can proactively protect themselves from exposure to compensatory and punitive damages by making “good-faith efforts” to comply with the new law. Such good-faith efforts may include, for example: implementing and promoting a non-discrimination policy; ensuring that current and prospective employees are aware of said non-discrimination policies and familiar with the procedures for airing complaints; and providing training to supervisors and managers to aid in creating and maintaining a workplace free from discrimination, harassment, and retaliation. Under the Act, a court may not award punitive damages against an employer who demonstrates a good-faith effort to comply with CADA.

Next, employers may not be held liable for compensatory or punitive damages absent intentional discrimination. See C.R.S. §24-34-405(3)(a). This means that discrimination or unfair employment practices that are unlawful based solely on their “disparate impact” cannot result in liability for compensatory or punitive damages. Further, in order to recover punitive damages, plaintiff-employees must prove that an employer acted with malice or reckless indifference to the rights of the employee by clear-and-convincing evidence, a heightened standard. See C.R.S. §24-34-405(3)(b)(I).

Furthermore, combined compensatory and punitive damages are capped, depending on the size of the business. For instance, these combined damages are capped at $10,000 for small companies with fewer than five employees, $25,000 for businesses with between five and fourteen employees, and $50,000 for businesses with between fifteen and 100 employees. See C.R.S. §24-34-405(3)(d). The damage caps for larger employers are identical to those under current federal law. See EEOC Limits On Compensatory & Punitive Damages. Despite these limits on certain damages, the court may award a prevailing plaintiff-employee their attorney’s fees and costs, potentially increasing an employer’s exposure to liability.

Lastly, employers who successfully defend against frivolous, groundless, or vexatious claims may be awarded their costs and attorney’s fees. While the Act makes it considerably more difficult for an employer to receive such an award when compared to relative ease with which a prevailing plaintiff-employee may recover costs and fees, the provision may prove useful in certain circumstances, and may also serve as a deterrent against truly frivolous actions.

Other Notable Provisions

• Employees alleging employment discrimination must exhaust administrative remedies before filing a lawsuit. See C.R.S. §24-34-306(14). This means that an employee must first file a complaint with the Colorado Civil Rights Division, proceed through an investigation, and receive a “right-to-sue” letter before filing a CADA claim in state court.
• When determining an award of compensatory or punitive damages, the court must consider the size and assets of the employer and the “egregiousness of the intentional discriminatory or unfair employment practice” before determining an appropriate level of damages.
• In any suit involving a claim for compensatory or punitive damages, either party may demand a trial by jury. In certain circumstances, such a demand may be advantageous for defendant-small businesses wishing to demonstrate their good-faith efforts to comply with CADA.
• The Act only applies to causes of action accruing on or after January 1st, 2015.

For additional information, assistance preparing your business to comply these new laws, or if you are in the process of bringing or preparing to pursue or defend a discrimination claim, contact Miller & Steiert, P.C. to schedule a consultation.