Colorado Legislature Proposing to Expand Remedies for
Employment Discrimination

The Anti-Discrimination Act, Colorado's state discrimination law, could be dramatically changing for the worse for Colorado employers, especially employers too small to be covered by federal discrimination laws.  Under current state law, plaintiffs asserting discrimination claims have their cases decided by a judge without a jury, and they can recover damages for actual economic losses, such as lost wages.  However, a new bill in the Colorado Senate (S.B. 110) proposes to change this system to (1) permit jury trials, (2) allow the award of additional damages for pain and suffering and punitive damages, in amounts that would be capped depending on the size of the employer from $25,000 to $300,000, and (3) permit awards of attorney fees to a prevailing plaintiff.  In a time of economic turmoil, private sector job losses, and dramatic cuts in Colorado's state government budget, this bill could have significant adverse impacts on employers and the public.

Senate Bill 110 was originally designed simply to renew the authority of the Colorado Civil Rights Commission and Division as part of the required "sunset review" process.  However, this gave lawyers who represent employees an opportunity to attempt to change the law to be more favorable for employees.

Supporters of the bill have argued that the proposed changes merely mirror the procedure and remedies already available under federal discrimination laws.  In some respects, that is correct, as federal law does permit jury trials, and an employee can seek damages for pain and suffering and punitive damages that are capped depending on the size of the employer, and attorney fees.  However, if S.B. 110 were enacted, there would still be significant difference between federal and state laws.

Two important differences between Colorado and federal discrimination laws are that state law covers more employers and has more types of protected classes of persons who can assert employment discrimination claims.  For instance, employers with less than 15 employees are not covered by federal law but are subject to state law.  These smallest employers, often the most vulnerable to economic challenges and least able to afford employment claim liability, would become subject to the higher liabilities.  In addition, certain types of discrimination prohibited by state law are not covered by federal law, such as, for example, sexual orientation discrimination.  Thus, the bill would represent a significant expansion of liability and risk of damages in the employment context, impacting all Colorado employers. To make matters worse, under S.B. 110, the damage caps would be adjusted every year for inflation, unlike federal law, guaranteeing that the state recovery caps would soon be higher than under federal law.

The practical consequences of this bill could be significant.  First, expanding remedies would induce claimants to take more discrimination claims to the Colorado Civil Rights Division ("CCRD").  During a time of budget cuts, the CCRD budget would need to be increased to permit it to investigate the additional claims.

Second, an increase in state law discrimination claims would also require an increase in the budget for the state court system.  If remedies under federal law were no longer the most favorable available, plaintiffs would no longer need to file federal claims, and therefore could avoid federal court and instead bring suit in state district courts.  Again, the state's already financially strapped judicial system would require additional funding.

Third, employment discrimination case trials are typically longer than the trials of most of the cases now filed in state court.  Shifting such trials onto the state court system, with an already crowded docket, postpones further the already delayed trials of those other cases.

Fourth, this bill would make inefficient use of personnel and intellectual resources.  Federal courts, including the U.S. District Court in Colorado, have decided discrimination cases for more than 40 years, and the judges presiding over those cases have developed a large body of case law interpreting the federal discrimination laws.  By contrast, Colorado state court judges have comparatively little experience with such cases and lack a large body of established Colorado law.  Federal judges also have more resources than state court judges in Colorado, including both federal magistrate judges who decide pre-trial disputes and conduct settlement conferences, and numerous law clerks.  To shift employment discrimination cases from the federal court system to the state court system would be to overload judges who are less equipped to consider and decide such claims.

A number of our clients, including a number of employers with fewer than 15 employees, have expressed to us their concern about this proposed legislation.  Regardless of the size of your organization, if you wish to take part in the effort to resist S.B. 110, please let us know.

Sherman & Howard has prepared this advisory to provide general information on recent legal development 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.

© 2009 Sherman & Howard L.L.C.                                                February 6, 2009