Colorado Legislature Again Considering Bill to Expand Remedies Under State Discrimination Law to Match or Exceed Federal Law

By Andy Volin

The Colorado Legislature is considering a bill to expand the remedies available for discrimination under state law to include jury trials, pain and suffering damages, punitive damages, and attorneys' fees.  House Bill 1269 provides that the employees of all sizes of companies will have, for claims of discrimination under state law, remedies equal or greater than those under federal law. Last year, a similar bill was narrowly defeated, but this year, the bill has been changed slightly, and there is chance that it will become law.

If this bill is enacted, employees will have more financial incentive than ever before to assert claims.  Far more claims would be brought in state agencies and in state courts under the new state law as compared to now, and resolving discrimination claims will be more difficult and expensive.

In an economic era where the emphasis is on creating favorable conditions for jobs, House Bill 1269 will likely be counter-productive, as it will increase the costs of employment in both the private and public sector.  It will also lead to increased budgetary pressure on Colorado state government.  Concerned employers should make their concerns known to their legislators.

A more detailed explanation of the features of this bill and practical advice are offered below.

In many ways, House Bill 1269 tracks the provisions of the 1991 Civil Rights Act, the federal statute that provides for compensatory and punitive damages - above and beyond recoverable back pay, front pay and attorney fees - in cases brought under Title VII and the Americans with Disabilities Act.  Like the federal law, the current bill provides for the award of compensatory and punitive damages, subject to a cap based on the size of the employer, with maximum damages of $300,000.  However, there are significant differences between this bill and federal law.

First, some federal statutes, like the Age Discrimination in Employment Act, do not provide for these types of damages. Thus, state law will provide a better remedy than federal law for this type of claim.  In light of the aging workforce, age discrimination claims will become even more likely to be asserted.

Second, federal statutes typically only apply to private employers with at least 15 employees, but Colorado's state law applies to employers of all sizes.  House Bill 1269 does include a one-year period before these new remedies are available against smaller employers, but after that one year expires, employees can be awarded compensatory and punitive damages of up to $25,000, in addition to back pay, front pay and attorney fees. This one-year delay for small employers is a change from last year's bill.

Third, the Colorado anti-discrimination law covers types of employment discrimination not even addressed by federal law. For example, sexual orientation is protected by state law, but not federal law. 

Finally, the rules will be different for public and private employers.  Punitive damages cannot be awarded against the state or political subdivisions, and compensatory damages cannot be awarded against the state (but apparently can be awarded against political subdivisions of the state). 

Colorado employers of all sizes, both private and public sector, should expect a number of practical consequences if this bill is enacted. First, if more charges are filed, as expected, because of these increased remedies, employers will have to respond to more charges of discrimination filed with the Colorado Civil Rights Division.  Thorough early investigations of charges will become even more critical.  Employers must expend additional time and resources on each charge, regardless of whether the charge has merit, in order to prepare a defense as soon as possible.  In addition, the CCRD budget will have to be increased, further increasing the budgetary pressures impacting the state.

Second, because of the increased remedies, employers should expect that more charges will be followed by lawsuits, regardless of the outcome at the CCRD level.  Even employees who lose at the CCRD level will have an incentive to continue to press their claims.  The delay between when the challenged action takes place, and when a jury trial takes place in a subsequent lawsuit, could be several years.  During that time, witnesses may move away or forget the facts.  Therefore, preserving records and documentation for challenged actions will be more important than ever.

Third, employers should expect that most discrimination lawsuits will be brought in state court, under the new state law, rather than under federal law.  This will happen because employees will prefer a state court forum over federal court, for a variety of reasons.  The cost of defense in state court will likely be more than in federal court, and it is likely that more cases will proceed to jury trial.  These factors, among others, may inflate the value of these cases, creating further incentives for an employee to assert a claim.  This will also increase the funds necessary to operate the state court system, creating another budgetary problem.

Sherman & Howard has prepared this advisory to provide general information on recent legal developments that may be of interest. This advisory does not provide legal advice for any specific situation. This does not create an attorney-client relationship between any reader and the Firm. If you want legal advice on a specific situation, you must speak with one of our lawyers and reach an express agreement for legal representation.

©2010 Sherman & Howard L.L.C.                                                       March 5, 2010