Colorado Capitol Report

In this Capitol Report:

• CACI Opposes Arbitration Bills Targeting Businesses
• Civil Rights Division Director Speaks to CACI Labor & Employment Council
• Last Chance to Register for CACI Day at the Capitol
• Want to Play on the U.S. Senior Open Course? Register for CACI's 2018 Annual Golf Tournament
• Save-The-Date! Federal Policy Council
• CACI's Legislative Agenda

CACI Opposes Arbitration Bills Targeting Businesses

When labor unions and trial lawyers back legislation, CACI members should rightfully be suspicious.

A pair of bills (HB-1261 and HB-1262) have been introduced that seek to turn the arbitration process used by businesses to control legal costs into a rigged game that would unfairly benefit the plaintiffs—and their attorneys, of course.

The complex bills are the Colorado manifestation of a national movement advocated by unions and their natural allies, the trial attorneys, that targets businesses as well as an assortment of liberal social-economic justice organizations.

On Tuesday, the CACI Governmental Affairs Council voted to oppose the bills.  On Wednesday, the CACI Labor and Employment Council also agreed to oppose the measures.

CACI is allied in its opposition to the bills with the Colorado Civil Justice League (CCJL).

CCJL noted that the two bills “appear to undermine the efficiency of arbitration by making it as long as costly as court trials.  CCJL said both bills will:

• Make arbitration more difficult and expensive by encouraging repeated court challenges to arbitrators or arbitral institutions.
• Impact far more than just consumer and employment contracts, including arbitration between sophisticated businesses.
• Limit the impact of the Colorado Supreme court’s important Vallagio decision that will likely cut down on construction litigation and result in more affordable housing choices.

Proponents of the bill include the Communications Workers of America, 9-5 Colorado, Colorado AFL-CIO, Colorado Trial Lawyers Association, Colorado Common Cause, The Bell Policy Center, Build Our Homes Right, AFL-CIO Denver Area Labor Federation, Colorado Alliance for Retired Americans, Colorado Fiscal Institute and Colorado Senior Lobby.

 HB-1261 “Colorado Arbitration Fairness Act”

The bill is sponsored by Representative Mike Weissman (D-Aurora), who is an attorney.

The House Judiciary Committee yesterday approved the bill on a partisan 7-3 vote, with Republican Yeulin Willet (Grand Junction) excused.  The measure now goes to the House Floor for Second Reading consideration.

Here’s the legislature’s non-partisan summary of the bill:

The bill applies to certain consumer and employment arbitrations and:

• Establishes ethical standards for arbitrators;
• Specifies that any party may challenge in court the impartiality of an arbitrator or arbitration services provider;
• Requires specified disclosures by arbitrators and arbitration services providers; and
• Authorizes injunctive relief against an arbitrator or arbitration services provider who engages in certain specified acts.

The bill’s Fiscal Note provides a more detailed analysis:

Summary of Legislation

This bill creates the “Colorado Arbitration Fairness Act.”  The bill establishes ethical standards for arbitrators, including that an arbitrator perform his or her duties and require attorneys in arbitrations proceedings to perform their duties without bias or engaging in harassment.

Disqualification.  An arbitrator is required to disqualify him- or herself from a proceeding in which his or her impartiality might reasonably be questioned and under specified circumstances, such as the existence of a concurrent conflict of interest.  An arbitrator subject to disqualification may disclose the basis of the disqualification and provide an opportunity for the parties involved to waive disqualification. Violation of these requirements constitute evident partiality.

Disclosures.  The bill establishes procedures and processes to make required disclosures, including time frames and the types of information that must be disclosed, such as the financial interests, personal relationships, prior agreements of the arbitrator and any of the affected parties, as well as a five-year history of prior arbitrations.

Court procedures.  In any matter subject to arbitration, any party may challenge, in court, the impartiality of the arbitrator or arbitration services provider on the basis of evident partiality. The challenge must be filed no later than 30 days after the disclosures are due.  If the court finds potential or evident impartiality, it is required to disqualify the arbitrator or arbitration services provider and to appoint a new arbitrator.  The bill also provides a party to an arbitration injunctive relief if an arbitrator or arbitrator services provider has potential or evident partiality or fails to substantially comply with its requirements.

HB-1262 “Arbitration Services Provider Transparency Act”

The bill’s two co-sponsors are Representative Dominique Jackson (D-Aurora) and Representative Dylan Roberts (D-Eagle).

The House Judiciary Committee yesterday amended and approved the bill on a partisan  6-3 vote with Republican Yeulin Willet (Grand Junction) and Democrat Joe Salazar (Thornton) excused.  The measure now goes to the House Floor for Second Reading consideration.

Here’s the legislature’s non-partisan summary of the bill:

The bill requires arbitration services providers that administer consumer or employment arbitrations to collect, publish, and make available specified information on those arbitrations administered in the previous 5 years. The bill amends a provision of the uniform arbitration act to make the bill effective.

The bill’s Fiscal Note provides a more detailed analysis:

Summary of Legislation

This bill requires that an arbitration services provider (provider) that administers consumer or employment arbitrations collect and make available specific information on those arbitrations administered over the previous five years. Information must be published on at least a quarterly basis and made available on its website, in a searchable and sortable manner and free of charge. If a written request is received, a single cumulative report must be made available.  The provider must provide the following information concerning each arbitration:

• whether the arbitration was demanded due to a predispute arbitration clause and if so, whether this clause designated that provider;
• the name of a nonconsumer party or employer and whether that party initiated the arbitration or was the responding party;
• the category of the dispute involved;
• whether the consumer, nonconsumer, employee, or employer was the prevailing party;
• the total number of occasions, if any, that the nonconsumer or employer party had previously been a party to an arbitration or mediation administered by that provider;
• the name of the attorney and law firm who represented a party, if any;
• information about key case-related dates;
• the type of disposition of the dispute;
• if applicable, the manner in which any hearings were conducted;
• the amount of the claim and awards involved; and
• the name of the arbitrator, with his or her fee information.

A provider shall not conduct arbitrations unless it has substantially complied with the bill’s requirements.  A party to an arbitration agreement is entitled to injunctive relief against any provider who fails to substantially comply with these requirements.  For purposes of vacating an award, the bill establishes the circumstances under which a provider and judicial officer’s partiality would require disqualification from participating in a particular arbitration.

For information on the two bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.

For news media coverage, read:

“Colorado Democrats seek to make corporate arbitration more transparent,” by Ed Sealover, The Denver Business Journal, February 26^th.

Civil Rights Division Director Speaks to CACI Labor & Employment Council

This week, Aubrey Elenis, Division Director of the Colorado Civil Rights Division spoke to CACI’s Labor & Employment Council members regarding her goals on behalf of the Division.  She shared some of the recent changes made within the Division including:

• More training of mediators and investigators;
• The creation of an on-line filing system for claims and to allow businesses to request information from the Division;
• Additional training of Division staff.

Ms. Elenis discussed the CCRD’s case priorities which have included race, national origin and pregnancies.  She also discussed the number of mediations and settlement of claims experienced through the mediation process and stated that the majority of those claims are being settled versus later being pursued in District Court.  Ms. Elenis also shared that there has been a significant uptick in the number of case filings since the revision to the CO Anti-Discrimination Act in 2013.  Case filings have increased from approximately 900 to 1,400 annually, however, she stated that there has not been an uptick in the number of probable cause cases and that there are more frivolous cases being filed.

The Council also discussed several pieces of legislation and took positions on those bills which included:

HB 1261 – Arbitration Services Provider Transparency Act –Oppose

• Requires private, arbitration organizations to disclose certain data about the arbitration proceedings that they administer, who the parties re and the outcome of the arbitration proceeding.
• The two organizations that do these types of proceedings are:  JAMS & AAA (American Arbitration Association).
• Concern here is that disclosing this type of info could violate confidentiality between the parties who are part of the arbitration process.
• 4 other states have passed similar laws but none as extensive as this bill.

HB 1262 – CO Arbitration Fairness Act – Oppose

• This bill imposes certain impartiality standards and disclosure requirements on those same arbitration organizations.
• Concerns are that currently arbitrators have to comply with all kinds of impartiality and ethical requirements already through the: Uniform Arbitration Act; CO Rules of Professional Conduct; and the Federal Arbitration Act as well as state and federal case law.
• Not only applies to consumer or employment contracts, it also applies to contracts with any purchaser or contracts with independent contractors.
• The bill creates layers of new partiality and conflict standards placed on arbitrators which could create increased litigation and slow down the arbitration process.

HB 1250 by Rep. Kraft-Tharp, Sias & Senator Priola – Analysis To Improve Compliance With Rules By Businesses – SUPPORT

SB 178 by Sen. Smallwood & Rep. Kraft Tharp – Similar Coverage Independent Commercial Vehicles – SUPPORT

SB 193 by Sen. Coram – Limit State Agency Occupational Regulations – OPPOSE

Last Chance to Register for CACI Day at the Capitol

Thursday, March 22, 2018
9 – 11:15 a.m.
Colorado State Capitol
200 E Colfax Avenue
Denver, CO 80203
Register Here

Agenda

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Save-The-Date! Federal Policy Council

Join us for CACI’s next Federal Policy Council on April 3rd!  Look for more information soon on one of today’s biggest topics: tariffs & how they affect businesses

CACI's Legislative Agenda

Below is a list of bills and their status on which CACI Policy Councils have taken positions. For more information on the bills, contact Loren Furman, CACI Senior Vice President, State and Federal Relations, at 303.866.9642.