In this Capitol Report:
This Capitol Report is brought to you by:
State Policy News
Senate Bill to Repeal Controversial 2013 Anti-Discrimination Law Clears First Hurdle
In 2013, HB-1136 was signed into law by Democratic Governor John Hickenlooper. Passed by a Democratic-controlled legislature, the measure allowed plaintiffs suing their employer—no matter the size of the employer–in state court in an employment discrimination case to seek awards of both compensatory and punitive damages.
HB-1136 was labeled by its sponsors as the “Job Protection and Civil Rights Enforcement Act of 2013.” CACI, in opposing HB-1136, worked with the bill’s sponsors to lessen its potential harm to employers, especially small ones.
The Senate Business, Labor and Technology Committee Monday approved a bill to repeal HB-1136 on a 6-3 vote with Senator Cheri Jahn (D-Wheat Ridge), who is a small businesswoman, breaking ranks with her fellow Democrats to support the measure.
Loren Furman, CACI Senior Vice President, State and Federal Relations, testified in support of the bill before the Committee. Here’s an edited version of Loren’s prepared testimony:
It goes unsaid that discrimination in the workplace is unacceptable and, of course, we don’t condone the behavior. We believe that the law created by HB-1136, however, is very flawed for three reasons and creates severe inequities for those whose livelihood is on the line.
HB-1136 made Colorado one of the most punitive states when it comes to discrimination claims.
It goes beyond what Congress enacted with Title VII of the Civil Rights Act of 1964 and the damages/remedies in 42 USC 1981, which specifically exclude businesses with 15 or fewer workers from being sued for punitive or compensatory damages.
With this threat of damages, any small business faced with just the potential of going to court, will likely settle immediately, even if the claim may be frivolous, because it can’t afford to spend hundreds of thousands of dollars to defend itself.
This law is completely one-sided for the plaintiff.
The plaintiff will receive attorneys’ fees and costs if he or she wins in a lawsuit, but the employer will rarely, if ever, recoup the money it spent to defend itself if it wins the case.
The only time the employer could get an award of attorneys’ fees and costs is if the court finds that the claim is frivolous, vexatious or groundless, which is an extremely high standard.
The plaintiff only has to win to receive his or her attorneys’ fees and costs.
The law created through HB-1136 is unnecessary.
Employers and workers have relied on the resources invested by the State via the Colorado Civil Rights Division (CCRD) to resolve these types of claims.
The State’s currently spends nearly $2.6 million, employing 31 full-time equivalent (FTE) workers, to keep the Division operating.
In a presentation to CACI by the CCRD last summer, we learned that as many as 90 percent of these claims are resolved through the CCRD process and have prevented the parties from going to court, which can cost an employer thousands of dollars.
It appears that the CCRD is doing its job in hearing and resolving these discrimination claims, which is why the State continues to fund this Division.
In closing, this law has many problems and essentially creates a bounty over the heads of small employers. In this regard, Colorado should be known as the most punitive state in the nation.
The SB-69’s fiscal note summarizes the proposal:
This bill modifies provisions of Colorado statute related to legal recourse for employment discrimination. The bill also repeals a requirement that the Colorado Civil Rights Division (CCRD) form a volunteer working group of employer and employee representatives.
Recourse for employment discrimination. The bill reverses certain changes to state employment law enacted by House Bill 13-1136, which took effect January 1, 2015. Specifically, the bill repeals and reenacts provisions of state statute related to remedies for employment discrimination.
Under current law (HB 13-1136), any employee who proves to the CCRD or, as applicable, the State Personnel Board (personnel board) workplace discrimination on the basis of disability, race, creed, color, sex, sexual orientation, religion, age, national origin, or ancestry may seek equitable relief (e.g., reinstatement) or an award of back pay and prospective earnings. In cases of intentional discrimination, and subject to certain limits, HB 13-1136 permits an employee who has prevailed at the CCRD or personnel board to pursue compensatory and punitive damages in state court. The present bill eliminates the option to pursue damages in court and limits remedies awarded by the CCRD to certain equitable remedies, removing prospective earnings from CCRD remedies.
A conforming amendment repeals the authority for the Risk Management Fund in the Department of Personnel and Administration (DPA) to be used for payment of compensatory damages to state employees.
Volunteer working group. Under current law, the volunteer working group organized by CCRD in the Department of Regulatory Agencies (DORA) is to develop education and outreach resources for employers to prevent discriminatory employment practices. An education and outreach plan was to be produced in FY 2013-14, and the group was also to compile educational resources for dissemination on the CCRD website. The bill repeals all statutory requirements for the working group.
Although statehouse observers believe that SB-69 is likely to pass out of the Republican-controlled Senate, the bill likely will face tough sledding in the Democratic-controlled House.
Consequently, the business community is placing more realistic hopes on a House bill, HB-1172, which would simply eliminate the punitive damages provision of HB-1136.
Sponsored by House Minority Leader Brian DelGrosso (R-Loveland), HB-1172 has been assigned to the House Judiciary Committee, which is scheduled to hear the bill when it convenes at 1:30 p.m., Thursday, January 19th, in Room 112 at the State Capitol. CACI also supports HB-1172.
HB-1172’s fiscal note describes the bill:
Summary of Legislation
Under current law, an employee may file an employment discrimination claim and seek compensatory and punitive damages in state court after pursuing administrative relief through the Colorado Civil Rights Division (CCRD). This bill eliminates punitive damages as a remedy for these state law employment discrimination cases.
In 2013, preexisting state employment law covered employers of all sizes, and prohibited employment discrimination on the basis of sexual orientation. House Bill 13-1136 amended Colorado employment discrimination law to provide the same forms of relief available under federal law, specifically compensatory and punitive damages. However, employees of small organizations (under 15 employees), as well as employees aggrieved on the basis of sexual orientation, are not covered by federal employment law. Under HB 13-1136, these employees may pursue employment discrimination claims under state law that are unrecognized by federal law, though employees of state and local government in Colorado are precluded from seeking punitive damages.
For news media coverage of this issue, read:
“Repeal of Colorado anti-discrimination lawsuit bill receives first approval,” by Ed Sealover, The Denver Business Journal, February 9th.
“Colorado lawmakers attempt to undo 2013 discrimination law,” by Ed Sealover, The Denver Business Journal, February 6th.
For more information on this matter, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.
NAM President Targets Improving Manufacturing Competitiveness
Yesterday, Jay Timmons, President & CEO of the National Association of Manufacturers (NAM) delivered the 2015 “State of Manufacturing” address to a room of 100 Colorado business and community leaders at the Ball Corporation in Broomfield.
The event was co-hosted by NAM board members, CACI-member Ball Corporation, and Centennial Bolt. Timmons speech was the eighth stop on a ten-city nationwide tour.
The speech focused on ways to make American manufacturers more competitive. Timmons asserted that manufacturing is one of the most highly regulated sectors of the American economy but that it has historically been and remains one of the most important sectors to the nation’s success. He cited numerous policies in the areas of: workforce development, tax reform and regulatory reform that could be enacted, repealed or improved to benefit manufacturers.
This topic dominated Timmons’ speech, including everything from the importance of intellectual property rights, promoting innovation, proposed regulations from the U.S. Environmental Protection Agency and new rulings from the Federal National Labor Relations Board. Timmons empathized with manufacturers who often feel under attack from governmental agencies and promoted a regulatory agenda that balances American values with manufacturers’ interests.
Timmons mentioned a number of efforts that are underway nationally and in Colorado to address the skills gap and workforce shortages. Specifically, he touted the accomplishments of the NAM Manufacturing Institute’s “Dream It. Do It.” campaign and Manufacturing Day which occurs annually in October. Timmons said that the NAM supports the philosophy behind President Obama’s National Network for Manufacturing Innovation, but that NAM is waiting to see what the specific action items look like that come from the network before making a final determination. Timmons also mentioned the importance of manufacturers being involved in addressing workforce issues through internships, training programs and relationships with higher education.
In the speech, Timmons mentioned that the U.S. has the highest corporate tax rate in the world. He emphasized the need for corporate tax reform while realizing that many manufacturers are registered as S Corps or partnerships and pay at the individual tax rate. Infrastructure improvement was also mentioned as a part of tax reform. While the NAM is not opposed to a gas tax increase, Timmons believes that a long-term fix needs to be found to fund construction and reconstruction of the nation’s roads and bridges.
Immediately before his speech, Timmons met with a small group of manufacturers and business-services providers organized by CACI, and moderated by CACI President Chuck Berry. Timmons previewed the themes of his speech and spent additional time on promoting changes to the Federal Affordable Care Act and comprehensive immigration reform (including a path to citizenship). CACI thanks the manufacturers who participated in the roundtable, including:
- Tom McNamara, Foam Fabricators,
- Leland Lorentzen, Golden Aluminum,
- Steve Fabos, Steven Roberts Original Desserts, and
- Kathleen Pitre, Ball Corporation.