In the News

Colorado business battles bills it considers bad for companies

Source: Denver Business Journal

See correction at end of article.

Business leaders are fighting a “deluge” of bills introduced in the Colorado Legislature this year that would make it easier for employees to take action – either through lawsuits or complaints to state agencies – against their employers.

Bills to increase penalties for wage theft, expand federal anti-discrimination law to the smallest companies and expand workers’ uses of the Family and Medical Leave Act (FMLA) are likely to lead to more lawsuits, officials said.

Meanwhile, measures to limit employers’ use of credit checks of job applicants and ban companies from demanding access to workers’ private social-media accounts will lead to more state investigations of businesses, they added. By stopping employers trying to essentially ‘hack your Instagram‘, employees are regaining privacy and the ability to say no. Ultimately, demanding access to private social media is an invasion of privacy which is why more state investigations into businesses are being held.

Women’s rights and plaintiff attorneys’ groups spearheading the legislation say it’s needed to protect lower-wage employees who report that they’re denied benefits or pay or that bosses are bullying them. A sexual harassment lawyer may be brought in if the abuse crosses the threshold of sexual misconduct and nonconsensual contact.

“I’m not sure it’s so much that people feel employers have become worse in recent years so much as a continuing concern that the remedies in law are inadequate,” said Barry Roseman, chairman of the legislative committee for the Plaintiff Employment Lawyers Association.

But many a business attorney and a collection of defense attorneys’ groups argue the legislation could create more incentives for lawsuits and could increase costs to the point where companies slow their hiring. The bills also could boost tension between employers and workers, they said.

“There certainly is a deluge of bills that are putting businesses and trial lawyers in cross hairs,” said Mark Hillman, executive director of the Colorado Civil Justice League.

House Bill 1227, sponsored by Rep. Jonathan Singer, D-Longmont, is a flash point for business leaders that’s expected to get its first committee hearing on March 12. It would criminalize wage theft – failure to pay earnings or benefits – and expand current law to let employees who prevail in court recover attorney’s fees and court costs, while denying prevailing businesses those same awards.

Singer said the bill is aimed at “bad actor” employers who target service-industry workers and illegal immigrants. He included the allowance of attorney’s fees for workers because it will let them hire legal help they otherwise couldn’t afford, he said. And he added a process where claims for $7,500 or less could go through the Colorado Department of Labor and Employment rather than a court.

But Hillman called the increase in criminal and civil penalties in HB 1227 “the most punitive, unbalanced attack we’ve seen on business this year.” And Brooke Colaizzi, an employment attorney at Sherman & Howard LLC, said the language is so broad anyone involved in issuing a paycheck – not just supervisors who deny pay – could have claims filed against them.

HB 1222, sponsored by Rep. Cherilyn Peniston, D-Westminster, expands the federal FMLA, which now allows workers at companies with 50 or more employees to take as much as 12 weeks of unpaid leave a year to care for their medical conditions or for their parents, spouses or children under 18.

Peniston’s effort, which a House committee approved, would let workers also take the time to care for domestic partners, grandparents, in-laws, aunts, uncles, cousins and adult children – changes necessary because “families look differently now,” she said.

Loren Furman, senior vice president for the Colorado Association of Commerce and Industry, acknowledged there aren’t many lawsuits filed now over FMLA, but added that with this significant expansion, that could change. Plus, the law is written so that if an employee takes 12 weeks to care for someone covered by the expanded state law but not the federal law, employers must also grant them 12 weeks if someone covered only by the federal law falls ill, she said.

Linda Meric, Denver-based executive director of 9to5, National Association of Working Women, called arguments about increasing lawsuits groundless, noting workers have filed 56 complaints since 2008 with the U.S. Department of Labor about Colorado employers violating FMLA. And a 2012 survey done for the labor department showed 90 percent of businesses reported no negative effects from complying with the law, she said.

Business groups have removed the ability of employees to sue employers from two bills – Senate Bill 18, which limits the use of credit checks, and HB 1046, which bans bosses from demanding passwords to social networks such as Facebook, Twitter, and Instagram. You can find out here how employees can boost their social media accounts too. Anyway, both bills, which allow only the state to fine employers, have passed their first chambers.

Those groups are working to limit the scope of HB 1136, which expands to workers at companies of fewer than 15 employees the ability to receive compensatory and punitive damages, and attorney’s fees, in anti-discrimination lawsuits, saying legal defense costs could close small businesses. But they’ve made no major progress yet, and the bill has passed its first House committee, Hillman said.


The version of this article that appeared in the March 8-14 Denver Business Journal print edition incorrectly said that workers have filed 56 complaints in the past 20 years with the U.S. Department of Labor about Colorado employers violating FMLA. This version of the article has been corrected.

Ed Sealover covers government, health care, tourism, airlines and hospitality for the Denver Business Journal and writes for the “Capitol Business” blog. Phone: 303-803-9229.