Does Colorado have anti discrimination laws?

Colorado employees enjoy protections from unlawful forms of discrimination under federal and Colorado anti discrimination laws. These employment discrimination laws prohibit employers from treating employees less favorably than other employees on the basis of one or more protected classes. Employees who suffer unlawful forms of discrimination have remedies under federal law and the Colorado Anti Discrimination Act. If you believe an employer discriminated against you as an employee or applicant then you should contact a Denver employment lawyer to discuss your case right away. Many employment discrimination claims require you to take specific acts within a short period of time to pursue a lawsuit or other remedy.

Federal employment discrimination laws in Colorado

Federal employment laws prohibit several forms of discrimination against employees and job applicants in Colorado. These laws often overlap with the Colorado Anti-Discrimination Act but provide separate rights and remedies from the state law. Federal employment laws prohibit employment discrimination on the basis of:

  • Race
  • Ethnicity
  • Gender
  • Sex
  • Religion
  • Disability
  • Age (over forty)
  • National origin

Other employment laws prohibit Colorado employers from discriminating against employees who exercise certain labor and employment law rights, like joining a union or taking FMLA leave, but these are often not thought of as explicitly anti-discrimination laws.

The patchwork of federal anti-discrimination laws (such as Title VII and the Americans with Disabilities Act) give Colorado employees remedies for discrimination on the basis of the protected classes above from acts such as:

  • failure to hire
  • failure to promote
  • harassment/hostile work environment
  • wrongful termination
  • pay disparity
  • demotions

Unfortunately these federal employment laws create a confusing mix of rights, remedies and procedures. For example, a Colorado employee who believes he or she suffers pay discrimination on the basis of sex could pursue claims under Title VII of the Civil Rights Act of 1964 and the Equal Pay Act. Under Title VII an employee must file an administrative charge with the EEOC within 180 days and follow an administrative procedure before a lawsuit filing a lawsuit. Under the Equal Pay Act a Colorado employee can directly file suit but must do so within two years. If you believe you have a claim for employment discrimination under federal law then you should talk to Denver employment lawyers right away.

Colorado Anti-Discrimination Act statute

Colorado anti-discrimination laws

Like most states, Colorado has its own anti-discrimination laws that apply within its borders. These anti-discrimination laws apply to employment as well as other areas such as housing and public accommodations. Colorado prohibits employment discrimination under a single statute, rather than a patchwork design of federal discrimination law. Colorado enacted the Colorado Anti-Discrimination Act to create a uniform structure of anti-discrimination protections for employees and applicants.

What is the Colorado Anti-Discrimination Act?

The Colorado Anti-Discrimination Act is the state statute prohibiting employment discrimination on the basis of protected classes. The protected classes under the Colorado statute today include all of the same classes protected by federal law but also include explicit protections for gender identity and sexual orientation.

Like federal law, the Colorado Anti-Discrimination Act establishes an administrative procedure to enforce the law’s protections and provide a forum for employees to pursue remedies. At one time employees could only pursue relief under the Colorado law through the Colorado Civil Rights Division and only limited types of relief. Today the statute allows Colorado employees to pursue claims either through the administrative process or by filing suit in Colorado state courts.

Unlike federal law, the Colorado Anti-Discrimination Act covers all employers in the state. Federal laws only apply to employers, depending upon the statute, with as few as two employees or as much as a minimum of twenty employees. For some types of employment discrimination in small businesses, the Colorado statute is the only available remedy for employees and applicants.

In many ways the federal and state employment discrimination laws overlap in remedies, rights and protections but it is important to be aware of the distinctions when pursuing a claim. Often employees and applicants will simultaneously pursue claims under both federal and state law which adds an additional layer of complexity to ensure compliance with both federal and state procedures. Hiring an employment lawyer in Denver can make it easier to ensure your claims are not defeated by failing to comply with statutory requirements.

When was the Colorado Anti-Discrimination Act passed?

The original anti-discrimination statute in Colorado was named the Colorado Fair Employment Practices Law enacted in 1957. This law prohibited discrimination only on the basis of race, ethnicity, national origin and religion. It created a rudimentary administrative agency and procedure to enforce its anti-discrimination protections in Colorado. A series of amendments added age (over forty), disability, gender identity and sexual orientation.

Colorado was a prominent battleground for LGBT discrimination protections in the 1990s. For as far back as the 1970s several cities had battled over creating municipal protections against various LGBT-related forms of discrimination.  In 1992 a state ballot initiative succeeded to prohibit cities from enacting their own anti-discrimination ordinances barring LGBT-related employment discrimination. This led to Romer v. Evans which went to the Supreme Court who ruled the amendment violated the federal Equal Protections Clause and struck it down. In 2007 the governor signed the Employment Non-Discrimination Act which amended the Colorado Anti-Discrimination Act to prohibit gender identity and sexual orientation in employment.

The Colorado Anti-Discrimination Act continues to evolve to improve protections for employees. As recently as 2015 the statute changed to allow employees to file suit in state court and to recover compensatory and punitive damages. Today the Colorado Anti-Discrimination Act continues to provide employees in the state with strong employment discrimination protections.

Employment discrimination lawyers in Colorado

Hiring Denver employment lawyers for Colorado Anti-Discrimination Act claims

When pursuing an employment discrimination claim in Colorado there are many immediate issues to consider. The employee or applicant must determine if federal law also applies to the situation or just the Colorado statute. If federal law may apply then one must assess which laws apply and what procedures are required to pursue claims under them. Those procedures, plus Colorado procedures must be satisfied–often with technical, precise compliance. The Colorado person pursuing claims must also consider the precise explanation of the discriminatory practices to ensure the description matches prohibited acts under the applicable statutes. There are then later decisions about valuing the claims, when and where to file suit and how to proceed in court or an administrative hearing.

Employees and applicants in Colorado typically are not experienced or familiar with these issues. Failing to follow the right procedures can result in completely losing the right to pursue a valid discrimination claim. One of the best things you can do for yourself is to hire Denver employment lawyers as soon as you believe you may have a claim to give your lawyers an opportunity to investigate your claims and follow the process that presents the strongest case.

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Colorado Labor and Employment Law 2019 Legislative Session Review

With the 2019 legislative session here in Colorado behind us it is time to check out how workers performed. The 2018 midterm election ushered in a Democratic majority but a purple state like Colorado is not always the most aggressive state for labor laws and employment laws favoring workers. Many areas of Colorado remain deeply red and antagonistic to employee rights both in specific industries and across the workforce. This year brought a large number of labor law and employment law bills in both the state house and senate, many favoring workers. Not all bills succeeded but overall workers fared well. This earlier post discussed the 2019 proposed labor and employment law bills in greater detail.

employment discrimination lawyer in Denver, Colorado

Employment discrimination laws proposed for Colorado in 2019

The 2019 legislative session saw some…interesting proposals on employment discrimination as a result of the Supreme Court’s opinion in Masterpiece Cakeshop that generally found the Colorado Civil Rights Commission and the Colorado judiciary wrongly decided whether a business can discriminate on its supposed religious beliefs. Part of the opinion relied upon what the court viewed as an antagonistic view of the Colorado Civil Rights Commission of the shop owner’s religious beliefs. Colorado Republics responded by introducing H.B. 19-1081 which would have made it harder to prove discrimination complaints before the Civil Rights Commission.  In short, this bill would require Colorado to finance a legal defense for a business accused of unlawful discrimination and repay the business if it ultimately prevails. Thankfully this ridiculous bill failed. 

A second Masterpiece Cakeshop related bill, H.B. 19-1111, would require members of the Colorado Civil Rights Commission to undergo First Amendment training to avoid repeating what the Supreme Court found offensive about the commission’s behavior. Although training on civil rights is not a terrible idea, the purpose of this law was to backdoor a legislative admonishment  to the Colorado Civil Rights Commission. This bill also failed.

Non-Masterpiece Cakeshop employment discrimination bills

A few employment discrimination bills unrelated to Masterpiece Cakeshop also made their way to the Colorado legislature.

H.B. 19-1039 proposed making it easier for transgender individuals to obtain government identification documents. While this bill does not directly apply to employment settings it likely will reduce instances of hiring discrimination against transgender workers who present as a different gender from the gender or sex marked on state identification. H.B. 19-1039 passed.

S.B. 19-056 proposed allowing employers to give veterans preference for jobs as long as the veteran is as qualified as other applicants. This bill intended to clarify existing law permitting preferred hiring for veterans by sharpening language prohibiting veteran preference to act as pretext for other forms of discrimination. This bill failed the 2019 Colorado legislative session.

H.B. 19-1025 proposed “banning the box” by limiting inquires into criminal backgrounds on initial applications for many jobs. Many employment discrimination lawyers observe that questions on criminal backgrounds often result in discrimination in hiring practices against people of color as a result of institutional racism in the criminal justice system. H.B. 19-1025 passed.

S.B. 19-085, the Equal Pay for Equal Work Act, proposed an explicit prohibition on pay-based mechanisms of sex discrimination. This Colorado bill creates state remedies similar to the federal Equal Pay Act. The Equal Pay for Equal Work Act also prohibits employers from asking about pay history which has historically allowed prior acts of sex-based pay discrimination to follow employees through their careers. After years of fighting to pass similar bills, S.B. 19-085 succeeded. S.B. 19-085 will go into effect in 2021.

Family and medical leave laws proposed in 2019 Colorado legislative session

The 2019 Colorado legislative session took yet another stab at expanding family and medical leave laws for employees. Colorado workers already enjoy family and medical leave protections under the federal Family and Medical Leave Act and the Colorado Family and Medical Leave Act; however, these laws only protect the right to take unpaid leave for family or medical situations. Many employers allow or require employees to exhaust paid sick time or vacation time but once paid time off runs out the employees must choose between unpaid leave or returning to work prematurely.

H.B. 19-1058 proposed creating family leave savings accounts similar to Health Savings Accounts (HSA) or Flexible Spending Accounts (FSA) for family and medical leave. Like an HSA or FSA it provides benefit to those employees who can afford to set aside funds but does nothing at all for working class employees most financially vulnerable to unpaid leave from work. Employees are already free to save money for unpaid leave. This bill would have done little more than create another tax shelter for wealthier employees. This bill failed.

S.B. 19-188 proposed creating paid family and medical leave as a statutory right. Paid family and medical leave has been proposed several times in Colorado but fails due to strong resistance by business groups and their lobbyists. Eventually the proposed bill set out in the Colorado Senate only created funding and programming to study the creation of a state insurance program to pool the costs of paid family and medical leave. This bill passed. Creating a formal program to study the issue is great but leaves open the door that the eventually analysis will be diluted to worthlessness by business interests.

Wage and hour bills proposed by the Colorado legislature in 2019

Colorado also saw movement on minimum wage and other compensation issues on behalf of employees. The result of four bills proposed in the 2019 legislative session favored employees.

H.B. 19-1210 proposed creating a statutory right for Colorado cities to set their own minimum wages higher than the state’s own minimum wage. One might think such law is needless political pandering by Democrats but that is not the case. Around the country business interests pursue legal avenues to prevent this from happening. They file lawsuits challenging the authority of cities to set higher minimum wages along with statutes prohibiting cities from setting their own minimum wages. Creating a statutory right for cities to enact their own minimum wages higher than the state minimum allows larger metro areas with higher costs of living to set minimum wages matching those costs while not requiring smaller towns across Colorado to follow suit. This bill passed into law but I expect to see judicial challenges to its constitutionality nevertheless.

H.B. 19-1267 proposed making it a felony to fail to pay wages to a worker when the amount of unpaid wages meets or exceeds $2000. Colorado labor and employment law already contains criminal and civil penalties for failure to timely pay wages; however, like in most states these penalties are mild and ineffective at deterring employers from paying employees waged owed. Hopefully raising the stakes will nudge employers to do the right thing and pay wages in full and on time. This bill also passed.

S.B. 19-022 proposed funding a bonus program for teachers who are “highly effective” at their jobs. This Republican bill responded to demands this year for higher teacher pay through typical tactics of wanting workers to fight each other over scraps and make them teach to bonus metrics rather than to the curriculum. Democrats refused to join the bill and as a result it failed.

H.B. 19-1107 proposed providing funding for state programs to provide job training to lower income and unemployed Coloradans. State programs create an alternative for workers to improve job skills and earning potential from expensive college and technical programs. This bill passed.

Labor law bills proposed in the 2019 Colorado legislative session

This year’s legislative session only brought one labor law bill to the floor but it proposed an incredible shift in Colorado labor law. H.B. 19-1101 proposed prohibiting employers from requiring union membership as a condition of employment. Colorado has a unique function under the Colorado Labor Peace Act in which an employer may be required to only employ union workers if a second vote, following the vote for union representation passes, with a supermajority to close the employer from nonunion employees.

Union opponents often criticize closed shops or union shops as destroying a fictitious free labor market and push these types of bills to make it more difficult for unions to provide effective representation in the workplace and weaken their ability to pool resources for that purpose. If employers can always hire nonunion workers then the employer has a reason to hire workers who are unlikely to join the union. That increases the likelihood workers may vote away the union and at a minimum reduces support for the union in the workplace. Thankfully, this bill failed.

Other labor and employment laws proposed in the 2019 Colorado legislative session

A smattering of labor law and employment law bills were proposed in this Colorado legislative session. S.B. 19-018 proposed reducing the driving age to receive a commercial driving license to eighteen. This bill opens job opportunities to younger adults by eliminating a legal barrier to jobs requiring operation of commercial vehicles. This bill passed. H.B. 19-1119 proposed expanding access to records of peace officer internal investigations. While not directly a labor or employment law issue, this bill would indirectly affect the employment record of peace officers in the state. Easier access to negative investigation findings may limit opportunities for affected officers. This bill, however, passed. H.B. 19-1105 proposed permitting nurse practitioners to treat workers compensation patients. This also passed.

H.B. 19-1117 proposed requiring the Colorado Department of Regulatory Affairs to regulate professions in the least restrictive means possible to avoid public harm. While that might sound okay on its face the function of the proposed statute is to create a judicial avenue to challenge any regulatory system and force the government to defend any professional regulation. Typically government regulation need only prove a rational basis; this bill would require DORA to meet a high burden by proving it regulated from the least restrictive means possible and that the purpose of the regulation can only be to avoid public harm. This Republican-led bill failed.

Conclusion

Overall this session advanced the interests of Colorado employees and defeated several bills that would have had broad negative effects for workers. While we could always chase a better result, we should be happy that Democrats took a step forward and fought for employees. The totality of bills passed in this session reflects the Democrats in the legislature and the presence of a more liberal Democrat in the executive than the bland governor he replaced.

Labor and employment law bills proposed in the 2019 Colorado legislative session

Colorado starts 2019’s legislative session with a healthy list of 227 proposed bills, many including provisions affecting the state’s labor laws and employment laws. Today’s post will briefly identify and discuss the major Colorado labor law and employment law changes proposed so far this year. Denver labor law will update as these bills move through the legislature and potentially become law.

SCOTUS rejects mandatory arbitration for transportation workers classified as independent contractors

Last week the Supreme Court dropped its unanimous decision in New Prime v. Oliveira penned by Justice Gorsuch, weighing in on the application of the Federal Arbitration Act to independent contractors of a transportation company. Many liberal media outlets describe the opinion as a win for workers because the court held in favor of the workers rather than the employer. Even articles taking issue with Justice Gorsuch’s textualist approach to the Federal Arbitration Act consider the opinion a win without considering its broader effect that employer-side employment lawyers will surely grasp. Viewed from its broader consequences, New Prime is not without collateral damage.

A brief history of employment law and the Federal Arbitration Act

Mandatory arbitration became commonplace in employment contracts and employment agreements as a condition of employment after the Supreme Court heavily rewrote the Federal Arbitration Act in the 1980s.

In 1925 Congress passed the Federal Arbitration Act which enforces arbitration clauses in contracts covered by the act. The Federal Arbitration Act was designed to create a meaningful dispute resolution framework between businesses that conducted transactions across the country. It intended to avoid situations in which a dispute arose over a purchase agreement and the parties might end up fighting in court for a long period of time or maneuvering a dispute into a local court that might heavily favor one party over the other. Instead the parties could agree to have a dispute resolved quickly by an arbitrator who was impartial and likely had familiarity with transactions in that industry.

Everybody seemed to agree with this history until we reached the excess capitalism of the 1980s. In the late 1970s and early 1980s enterprising businesses, primarily in banking and lending, fought to repurpose the Federal Arbitration Act to apply to consumer transactions. Courts agreed and mandatory arbitration agreements became part of many consumer agreements for credit cards, bank accounts, utility services and sometimes even retail purchases.

Arbitration in consumer agreements provides businesses several advantages over litigation. Arbitration proceedings are often cheaper and result in smaller adverse judgments. Companies have less incentive to settle and even when they lose they lose less. Arbitration proceedings are framed by the party demanding arbitration so it is often a friendly environment and avoids courts which may be more impartial. Arbitration decisions are often not published so even when companies suffer adverse judgments they are concealed from the public which makes it harder for consumers to assess their potential relief in this forum.

Companies liked arbitration so much that they expanded mandatory arbitration to employment agreements. Employers in the 1980s and 1990s began requiring employees to sign forced arbitration agreements for employee claims under a wide range of employment law and labor law claims. This was different from labor arbitration under a collective bargaining agreement in which the union and employer negotiated the terms of arbitration proceedings. Under these forced arbitration agreements, employers held absolute control over arbitration terms. Employees signed the agreements or lost their jobs.

Circuit City v. Adams and the FAA in employment agreements

In 2001 the Supreme Court rendered judgment in Circuit City v. Adams holding that the FAA applied to employment agreements. Adams applied for a job with Circuit City in which the employment application contained a unilateral agreement to arbitrate all employment claims. Adams later filed an employment discrimination lawsuit against Circuit City, which attempted to move the lawsuit into arbitration pursuant to this agreement.

The Supreme Court majority took on a tortured reading of the Federal Arbitration Act to reach this conclusion. Within the FAA are two relevant passages:

Section 1: “…nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.

Section 2: “A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”

At issue in Circuit City is how expansively Section 1 limits the FAA’s application to employment contracts and the extent any employment agreement not exempted by Section 1 falls within Section 2. The majority applies two different cannons of statutory construction to give the word “commerce” two opposing definitions in the same statute. According to the majority, commerce in Section 1 must be narrowly defined because the section describes some of the workers. The applicable cannon of statutory construction mandates when a general term follows specific terms, the general term is interpreted as including items like the specific. As a result, the employees exempted by Section 1 only include employees involved in transportation (like railway workers and seamen). All other employee contracts are not exempt. Conversely, commerce in Section 2 must be expansively defined because it lacks any limiting language and the FAA intended to expansively cover the extent of Congress’s power under the Commerce Clause.

(The reasoning here is awful and well excoriated by the dissenting opinions. It is well worth exploring but beyond the scope of this post.)

As a result of Circuit City we have expansive legal protection for forced arbitration in employment with very little limitation.

New Prime v. Oliveira and forced arbitration of independent contractors

New Prime deals with relationship between the FAA and non-employee workers. Here Justice Gorsuch’s majority opinion provides further confusion into interpreting the FAA in the employment context although he finds an interpretation that favors the workers in this particular situation.

New Prime is a transportation company that hires truck drivers as independent contractors. As part of their contracts the drivers agree to arbitrate claims related to their work on an individual basis. Oliveira filed a class action lawsuit on behalf of himself and his co-workers alleging wage-based claims. New Prime sought to remove the lawsuit to arbitration and chop up the class action into individual actions under its arbitration agreement.

Justice Gorsuch applies a supposed textualist approach to determine the drivers have contracts of employment under the Federal Arbitration Agreement. He advances the position that language of the act must be interpreted within the ordinary meaning of its time. He finds that in 1925 there was no distinction between independent contractor and employee and the term employment applied to all employment relationships. Truck drivers are as well employees like railway workers and sea workers therefore they are the types of workers covered even among Circuit City‘s limited scope of Section 1. Therefore, although New Prime did not employ the drivers as employees their employment agreement fell within the FAA’s contract of employment language.

New Prime gives us an even more confusing view of the Federal Arbitration Act. Combining New Prime and Circuit City we have no consistent standard to interpret the statute. On one hand, New Prime tells us to read the statute in the context of its time but Circuit City tells us to read the statute in its modern setting in which commerce is defined in a much broader term than at the time the FAA was enacted. We are forced to read Section 2 in a post-Wickard, everything-is-commerce interpretation but read section 2 in a pre-Wickard interpretation where commerce is narrowly defined. It’s almost like this kind of textualism is goal-oriented.

Why New Prime isn’t worth quite the praise it gets

Across liberal and legal press one can quickly find piece after piece congratulating Justice Gorsuch for overlooking his traditionally pro-business position to give the day to the workers in New Prime. (For example, here, here, here, here and here.) That oversells the inevitable impact of this opinion for labor law and employment law.

Sure, New Prime is a win for workers engaged in transportation jobs like those covered by Circuit City‘s interpretation of workers covered by Section 1’s exemption. Employers may no longer get away with properly or improperly defining these workers as independent contractors, rather than employees, to force them into mandatory arbitration agreements. It does not help them gain any other protections as employees but it does avoid mandatory arbitration. This is certainly a tremendous win for transportation workers regardless of their classification as employee or independent contractor.

However, New Prime‘s interpretation of Section 1 is not without collateral damage. Although all transportation workers may fall within New Prime‘s interpretation of Section 1’s exemption it does not mean those same workers may receive exemption under state law. In the end, all these workers may find themselves in mandatory arbitration anyway. It also does not help that New Prime doubles down on the narrow interpretation of Section 1 found in Circuit City. The greatest problem with New Prime is that it leaves little question that SCOTUS definitely views independent contractor relationships as well within the FAA’s scope. Enterprising plaintiff-side employment lawyers are likely to find reason to challenge applying the FAA to independent contractor relationships particularly in light of last year’s Epic Systems opinion (and its basis in AT&T Mobility v. Concepcion) upholding class action waivers in mandatory arbitration employment agreements.

Colorado Labor and Employment Law 2019 Outlook

Predicting twelve months of legal changes, even in labor law or employment law, is a tough game in 2019. We have an unpredictable White House, a recent change to the U.S. Supreme Court and turnover in the U.S. House and Colorado Senate in favor of Democrats. It may simply be too early to tell how 2019 will treat Colorado, if only because we do not even know what bills legislators will submit to the federal and state legislatures. That said, we can look at the changes for 2019 in existing federal and Colorado law and at least set up some basic predictions about how labor and employment law may change for Coloradans this year.

Changes to federal labor law and employment law in 2019

Federal employment law changes are already on the books for the administrative agencies. Executive Order 13658 increases minimum wage for federal contractors to $10.60/hour (or $7.40/hour for tipped employees who suffer the tip credit). Beginning January 14, 2019, 45 C.F.R. § 147.132 and 45 C.F.R. § 147.133 allow certain private employers to opt out of federally required contraceptive coverage if the employer has a sincere moral or religious objection to covering contraceptives on the employer’s health insurance plan.

Additionally, the EEOC published new rules on wellness program incentives that take effect on the first day of 2019. Previously employers were permitted under EEOC guidance to grant employees up to a 30% discount on health insurance premiums if the employee participated in an employer-sponsored wellness program without violating the Americans with Disabilities Act (ADA) or Genetic Information Nondiscrimination Act (GINA). In late 2018 a federal district court ruled the incentive rules could render a wellness program involuntary and run afoul the ADA and GINA.

Changes under Colorado labor law and employment law for 2019

Colorado state law will also see a significant change. Beginning January 1, 2019, a minimum wage increase goes into effect. In 2016 Amendment 70 to the Colorado Constitution was passed by voters establishing a new minimum wage regime for the state. Each year through 2020 minimum wage increases by a fixed amount. Subsequent years will increase with inflation. The 2019 Colorado minimum wage is $11.10/hourly. (Read here to learn more about the Colorado minimum wage for 2019 and years forward.) Colorado joins twenty-one other states increasing minimum wage above the federal minimum wage in 2019. 

What 2019 will likely bring for federal labor law and employment law

Predicting 2019 for labor law and employment law is not necessarily an easy task given the changes in the legislature, Supreme Court and the White House. The interplay between Democratic control of the House and Republican control of the rest of the federal government is already on play with the shutdown. Who knows how that will continue to unfold until the Dems put in motion their legislative agenda for the year. The current administration would surprise few to continue to unwind Obama administration DOL regulations. 

Federal shutdown’s effect on labor and employment law

The current federal shutdown is certain to have some effect on federal labor and employment law issues. Although courts remain open through a shutdown, many labor and employment law agencies close, including the EEOC. That can create problems filing administrative complaints for employment discrimination claims, among other administrative remedies. Federal employees in particular who believe they have labor or employment law-related complaints should contact an employment law attorney right away. Do not assume the shutdown of an agency means filing deadlines for complaints are suspended. That is often not the case.

Anti-union activist support

Across the country we should expect to see continued challenges to the validity and activity of public unions. In 2018’s awful Janus decision the Supreme Court trashed public union agency fees and set the tone for anti-union activists that they would find an ally in the current SCOTUS majority. 

Sexual harassment lawsuits

2017 and 2018 saw a rise in sexual harassment lawsuits as part of the #metoo movement and Weinstein effect. These lawsuits are likely to continue through 2019 although new high profile cases may wane with the Supreme Court’s 2018 activity. It’s hard to imagine Brett Kavanaugh’s contentious confirmation hearings was not a serious wound to the spreading belief that the #metoo movement was stamping out the acceptability of sexual harassment.

Perhaps more importantly, SCOTUS decided a trio of cases last year affirming the use of class action waivers in employment arbitration agreements. These class action waivers permit employers to push class actions out of litigation into private arbitration forums where they will avoid publicity of the details of the case, not to mention the final outcome. Employers fearing class action sexual harassment lawsuits likely will add these waivers to their arbitration agreements or review existing waiver to ensure complicity with the Supreme Court opinions. 

Predictions for Colorado labor and employment law in 2019

Colorado labor law and employment law will likely see changes in 2019 as well, particularly with Democrats obtaining control of both houses of the state legislature and the executive. Every legislative session House Democrats propose pro-employee and pro-labor bills that were generally blocked by the Republican-controlled Colorado Senate. Now that Democrats control both houses they should be able to pass many of these bills. We do not yet know what the legislative agenda will include for the Colorado legislature but we can predict two likely areas of labor and employment law that will appear in 2019.

Colorado minimum wage changes

In addition to the constitutional minimum wage change for 2019 across the state, this may be the year Democrats pass legislation to allow cities to set their own minimum wage. Senate Republicans blocked this frequent proposal but now Dems may get their wish to push through more flexibility across the state. Liberal cities like Denver and Boulder are likely to raise minimum wage to $15/hour if given the opportunity. 

Marijuana laws and employment

Denver marijuana employment laws

Colorado has been an important place for the intersection of marijuana legalization and employment, particularly since the 2015 decision in Coats v. Dish Network. Colorado Democrats may push legislation this year to resolve the unfortunate result in Coats by statutorily prohibiting employers from adversely using a marijuana-positive drug test in employment decisions. 

There also appears strong momentum behind proposals to erase pre-legalization marijuana possession convictions. Boulder and Denver indicated intent to make these changes through judicial means. There is also a lot of talk among Colorado legislators to enact state-wide legislation erasing these convictions. That could substantially help workers in the job market held back by marijuana possession convictions. 

 

What is a hardship withdrawal from a 401k or 403b plan?

Under the Employee Retirement Income and Security Act (ERISA), a 401k or 403b plan may only permit participants to withdraw funds from the plan under specific rules. For current employee-participants, the distribution rules generally severely limit withdrawals. One common form of withdrawal for employees is a hardship distribution. A hardship distribution is what it sounds like; it is a distribution permitted to help the employee cover a financial hardship with retirement funds. There are generally two types of hardship distributions: (1) facts and circumstances hardship withdrawals and (2) safe harbor hardship withdrawals.

An employer can choose what, if any, hardship withdrawals to permit. An employer may choose to allow no hardship withdrawals at all, or only certain safe harbor reasons. Alternatively, an employer could choose to allow all of the safe harbor rules plus additional circumstances that led to an unforeseeable emergency to the employee.

Safe harbor hardship withdrawal rules

Most plans allow hardship withdrawals under the safe harbor rules which currently allow hardship withdrawals for six reasons. These include:

  • The purchase of the employee’s primary residence;
  • Medical expenses of the employee, the employee’s spouse or other dependent;
  • Tuition and other educational expenses for the next twelve months of postsecondary education for the employee, the employee’s spouse or other dependent;
  • Payments necessary to prevent the eviction of the employee or to prevent the foreclosure of the employee’s primary residence;
  • Funeral expenses for the employee, the employee’s spouse or other dependent;
  • Certain expenses to repair damage to the employee’s principal residence caused by catastrophic damage.

Under the safe harbor rules the employee may receive a hardship distribution under one or more rules of the employee’s deferrals. The employee may not receive earnings or employer contributions (except certain employer contributions prior to 1988). The employee may only receive as much as the employee can document is necessary for one or more of these reasons. The employee must allege to the employer that he or she is unable to satisfy these expenses from another source, such as insurance payments. Current IRS regulations require employees to exhaust all other loan and withdrawals from the plan before a hardship withdrawal and the employee cannot make future deferrals to the plan for the following six months.

Why employers operate under safe harbor rules

These rules create a “safe harbor” under IRS regulations so that the employer or other plan sponsor may permit these distributions without a plan audit questioning the validity of the distribution so long as the employer diligently received evidence of the employee’s hardship and reviewed the evidence for conformity with IRS regulations. The less a plan sponsor goes outside of safe harbor rules with an ERISA retirement plan the less liability it creates for itself. Along with operating outside of safe harbor rules also comes paying for more guidance from employment law attorneys who specialize in retirement plans and other compensation issues. If the IRS audits the retirement plan and finds regulatory violations then the plan sponsor may face penalties and may further attorney’s fees to deal with defending against the IRS and fixing plan problems.

Facts and circumstances hardship withdrawal rules

A 401k or 403b plan sponsor may allow additional or alternative hardship withdrawals based upon circumstances beyond the safe harbor rules. These are often referred to as facts and circumstances hardship withdrawals or unforeseeable emergency hardship withdrawals. The rules for these distributions are similar; however, the plan sponsor determines its own reasons why it will approve a hardship withdrawal. The 401k or 403b plan must provide clear explanation under the plan rules what constitutes these facts and circumstances that permit a hardship withdrawal. A plan sponsor cannot create new hardship distribution rules on the fly for employees even if the employee’s reason legitimately is an unforeseeable emergency that could justify a hardship withdrawal.

For the employee a facts and circumstances hardship withdrawal is similar to a safe harbor hardship distribution. The employee’s ability to request a hardship withdrawal is still limited to the employee’s need and the employee must exhaust other financial options before turning to the hardship withdrawal. The facts and circumstances hardship withdrawal differs in not requiring a six months suspension of deferrals. The employee can receive employer matching contributions and nonelective contributions.

Why employers often do not provide facts and circumstances hardship withdrawals

However, the plan sponsor’s responsibilities under a facts and circumstances hardship withdrawal differs. The sponsor’s liability for mismanagement of the plan is greater because the sponsor must define the hardship and necessary evidence of the hardship for each fact and circumstance. If the sponsor fails to define facts and circumstances that satisfy IRS regulations or fails to objectively and consistently apply those rules then it may face severe penalties for permitting invalid distributions. At a minimum, the cost of administering plan rules beyond safe harbor regulations increases as the plan pays for additional employment lawyer time to design, review and counsel the sponsor on plan administration. Most employers and other plan sponsors try to avoid expanding their attorney’s fees for plan administration.

Colorado 401k lawyers for hardship withdrawals

Why ERISA and IRS regulations limit hardship withdrawals at all

As an employment lawyer who deals with ERISA retirement plan issues I have long heard questions around why ERISA regulates hardship withdrawals at all. These are understandable questions for several reasons. After all, the funds in your 401k or 403b plan are your deferred compensation and funds from your employer earned as part of your overall compensation. Most bank accounts and other savings vehicles allow you to pull your funds at any time, even if at a penalty. Expecting the same from your employer-sponsored retirement plan is not an unusual expectation; however, there are several reasons why federal employment law and your employer’s plan rules limit hardship withdrawals and other distributions.

The primary reason why ERISA and its accompanying regulations limit pre-retirement distributions is to encourage retirement savings. Taking your funds out prior to retirement directly opposes that goal. Permitting a limited range of pre-retirement distributions strikes a balance between helping employees save for retirement and discouraging savings because employees may need access to the funds in the event of a financial emergency. That is why the vast majority of ERISA-governed retirement plans permit at least some hardship withdrawals or loans.

Employers have legitimate reasons to limit active participants from depleting retirement savings. Compliance with other ERISA statutory and regulatory requirements is an important component of operating a retirement plan. Failure to comply with these requirements can result in financial penalties to the plan sponsor and worse, can even result in disqualification of the plan which causes direct financial harm to the participants. Distributions can be a major source of liability for plan administration. They also bear expense on the plan. Distributions are among the more expensive transactions for the plan so the more distributions the plan processes the greater administration expense and the more likely the employer will raise plan fees to account for it. Frequent distributions also require the plan to structure investments to the participants and for management in ways that can be less valuable to participants.

Implications of taking a hardship withdrawal from your retirement plan

A hardship withdrawal may help deal with an imminent emergency but create other complications down the road. Participants considering a hardship withdrawal should carefully consider the drawbacks to taking a hardship withdrawal before submitting a request.

The most obvious potential issue with a hardship withdrawal is that the distribution is taxable to the extent the distributed funds are untaxed. Most retirement funds eligible for a hardship withdrawal will be pre-tax funds subject to ordinary income tax upon distribution. You may have some after-tax or Roth deferrals within the hardship withdrawal that are not subject to taxes. In addition to ordinary income tax, any taxable portion of the withdrawal may be subject to a 10% early withdrawal penalty.

You should consider the tax liability of your request at the time of distribution. Plan rules may allow you to gross up your withdrawal request, meaning you can request an additional amount to cover some of the taxes due on the withdrawal request. The danger here is that if you do not adequately plan for the additional taxes due at tax time you may find yourself rolling one financial hardship into the next one when you pay taxes the following year.

Additionally, under the current ERISA rules, a plan may or must suspend your deferrals to the plan for six months following a hardship withdrawal. A hardship withdrawal will not only deplete your retirement plan of existing funds but may limit your ability to replenish those funds. In certain economic conditions this can severely harm your retirement savings beyond the amount of the distribution. Consider your options to handle your current financial emergency in other ways and how you will make up the retirement savings depleted by your hardship withdrawal.

Similarly, by taking funds out of your retirement plan you may negatively affect your investments or investment strategy for retirement. Some plans include complex investments or investments that require you to pay fees to liquidate them to fund your hardship withdrawal. Consider how your request may incur additional fees or lock in investment losses as a result of your request. In an urgent financial emergency these may be worthwhile risks to accept but down the road you may have wished you dealt with them differently. Some retirement plans allow you to select investments to liquidate for these distributions to minimize these costs. Review your plan documents before submitting your hardship request to see what options are available.

Can an employment lawyer help me get a hardship withdrawal if the plan administrator says no?

Another common question directed to employee rights lawyers is what can be done when a plan administrator denies a hardship withdrawal request. Again, this is a completely normal question. If you need a hardship withdrawal then it is probable that you have a serious financial emergency and need whatever help you can get. The answer to this question depends upon the particular facts in your situation.

Do you qualify under the plan’s hardship withdrawal rules?

The first issue is whether you qualify for a hardship withdrawal under the plan’s rules. ERISA statutory and regulatory rules require plan administrators to administer the plan within plan rules uniformly and consistently. The plan administrator cannot create new hardship withdrawal reasons even if your situation would qualify as an unforeseeable emergency under ERISA. The plan administrator also cannot create different qualification rules for your withdrawal request. For example, the plan administrator cannot allow you to submit less specific documentation than other employees or approve your request for slightly different reasons than what the plan rules specifically permit.

Instead your hardship withdrawal request must fall within one of the reasons specifically described by plan rules and you must provide the documentation of the hardship within the plan’s normal approval procedures. To determine whether you comply with the plan’s rules and procedures an employment lawyer will often need to review the plan documentation against your request documentation. If your request does not fall within the plan rules then your employment lawyer may discuss other options to request a hardship withdrawal or other distribution under the plan rules.

Did my hardship withdrawal request comply with plan rules?

Sometimes plan administrators and their agents fail to process an appropriate request for a hardship withdrawal but often people fail to submit proper requests. Determining what will cure a failed application for hardship withdrawal application is usually not a difficult process if you understand how retirement plans process these requests. Today many retirement plans process hardship distributions without requiring participants to submit written applications or documentation but problems can still arise in processing your request.

In some cases problems arise although the plan received a complete and compliant request. These may come from technical problems processing the application or a manual error by somebody in the midst of processing your request. Sometimes people involved in your employer’s retirement plan do not fully understand hardship withdrawal rules which can cause unnecessary delay. These are situations where an experienced employment lawyer can help you navigate the process by working with your plan administrator to resolve errors in the process.

On the other hand, your request may be deficient because an application was incomplete or the supporting documentation does not adequately support the request. Plan administrators often require specific documents to approve a hardship request and you may not have access to the specific document at this time. An employment lawyer can review your plan rules and work with the necessary parties to cure your application and get the hardship withdrawal approved as quick as possible.

When to contact an employment lawyer in Colorado about a hardship withdrawal?

If your employer refuses a hardship withdrawal request and you cannot resolve the denial with your employer then it is a good idea to talk to Colorado employment lawyers in your area about your situation. Do not delay talking to employment lawyers near you. Many hardship withdrawal situations are time sensitive and you and your employment lawyer may have many steps to take to resolve the withdrawal request. The longer you wait the more difficult it may be to prevent the hardship from becoming a larger problem.

In more troubling situations the plan administrator’s refusal to process a valid hardship withdrawal may signal more serious problems with the plan. The plan sponsor or somebody with access to plan funds may have depleted plan assets or other fiduciary problems may exist with plan administration. The plan administrator’s acts may also be part of a larger problem such as unlawful employment discrimination. These are issues an experienced employment lawyer can explore with you. Talk to a Denver employment lawyer about your retirement plan problems.

EEOC or Hiring a Lawyer: When Do You Need an Attorney for Job Discrimination in Colorado?

Do you need an attorney for job discrimination in Colorado or should you rely on the EEOC to represent your interests? Employees who suffer discrimination on the job in Colorado likely have never had to deal with the EEOC or hire an employment discrimination lawyer in Denver. Learn more about when you may want to talk to an EEOC lawyer and when you do not have to work with the EEOC. This post will discuss:

  • The EEOC process;
  • When you must follow the EEOC process;
  • When you do not have to follow the EEOC process;
  • What an attorney for job discrimination can do for you; and
  • When you may want to talk to an attorney.

Employees in Denver and other parts of Colorado may have alternative procedures and remedies under state anti-discrimination law and we will touch on that issue as well; however, the primary focus of this post will be the EEOC process and federal employment discrimination remedies.

Most job discrimination claims in Colorado must go to the EEOC

If you believe you suffered job discrimination and need an attorney you need to know that many federal civil rights laws require you to first file a complaint with the EEOC before you can file a federal lawsuit. Most federal employment discrimination laws require you to file a complaint with the EEOC called a charge of discrimination. After filing your charge of discrimination, EEOC investigators will investigate and you likely will proceed through an informal settlement process.

If your complaint does not settle then you will either have the opportunity to have your case heard by an administrative law judge or file a lawsuit in court. The EEOC investigator may tell you that you do not need to hire an attorney for job discrimination; but that may result in missing options in your employment discrimination or hostile work environment claims.

EEOC Lawyer

Why you may want to talk to an attorney for job discrimination in Colorado first

You can file a complaint with the EEOC without hiring an attorney for job discrimination. The EEOC intake process for complaints is designed to allow workers to report discrimination on the job without an attorney. However, you may want to schedule a consultation or hire an attorney for job discrimination before filing your EEOC complaint. Your attorney for job discrimination may encourage you to follow the EEOC process. A lawyer can advise you how to proceed through the process and what to include in your complaint. Anything you leave out of an EEOC complaint likely cannot be pursued later so it is important to present a strong EEOC complaint.

Additionally, Colorado has its own state remedies for job discrimination. Colorado state law (C.R.S. 24-34-401 et seq) creates its own framework for dealing with job discrimination. C.R.S. 24-34-401 et seq. provides state law remedies for job discrimination broader than some federal anti-discrimination laws. The Colorado employment law also empowers the Colorado Department of Labor and Employment to receive charges of discrimination. The state agency can investigate and pursue claims of job discrimination. Colorado employment lawyers can advise you whether you should pursue your claims under federal or state law and with which agency to file your charge.

Employment discrimination lawyer Denver

When you can go straight to court under federal discrimination law

Most job discrimination laws require you to exhaust your administrative remedies through the EEOC or a state discrimination agency before you can file a lawsuit. Two federal employment laws do not require you to exhaust remedies before filing a lawsuit:

  • Age Discrimination in Employment Act
  • Equal Pay Act

The Age Discrimination in Employment Act (ADEA) prohibits discrimination on the basis of age against workers over forty. It requires employees to file a charge of discrimination with the EEOC but does not require the worker to receive a Right to Sue Letter from the EEOC before filing a federal lawsuit. The worker must file suit, if desired, no earlier than sixty days after filing the charge of discrimination and no later than the ninetieth day after the EEOC concludes its investigation.

The Equal Pay Act prohibits discrimination in compensation between men and women. It does not require workers to file a charge of discrimination with the EEOC or receive a Right to Sue Letter before filing a lawsuit. Note that an employee may have sex discrimination claims under both the Equal Pay Act and Title VII of the Civil Rights Act of 1964 which does require filing a complaint with the EEOC. Before deciding not to file a complaint with the EEOC you should talk to an attorney for job discrimination. If you have potential claims under both statutes and do not file a charge of discrimination and lose on your Equal Pay Act claim you may not be able to file a claim for the same discriminatory acts under Title VII. A lawyer familiar with the EEOC and anti-discrimination statutes can help you assess the best course of action.

When you can opt out of EEOC involvement in your Colorado job discrimination claim

You may be required by federal employment law to begin your job discrimination claim with an EEOC complaint. However, you do not have to keep your discrimination claim with the EEOC. You have the option under anti-discrimination laws to quit the EEOC administrative process and file a private lawsuit if one or more conditions are true. These include:

  • The agency has not responded with a decision within 180 days and no appeal has been filed on the complaint;
  • The EEOC issued a determination and neither employer or employee filed an appeal;
  • The EEOC does not respond to your appeal or the employer’s appeal with a determination within 180 days; and
  • You do not agree with the EEOC’s conclusion on your appeal.

The EEOC may choose not to pursue your charge of discrimination and issue a “Notice of Right to Sue” to you. If you receive a Notice of Right to Sue from the EEOC then you should talk to an attorney for job discrimination right away.

attorney for job discrimination in Colorado

Note that should you decide to pursue a private lawsuit you must do so within ninety days of the EEOC:

  • Issuing a decision and no appeal is filed;
  • Issuing a decision on an appeal to its initial decision; or
  • Declining to pursue your charge of discrimination and issuing a Notice of Right to Sue.

If you fail to file a private lawsuit within this limitations period then you may be barred from pursuing your claims in court. Therefore, it is vital that you talk to an attorney for job discrimination–if you haven’t hired one already–about your options. Waiting to talk to an employment lawyer or filing a lawsuit can be fatal to your discrimination claims.

Hiring a lawyer in federal court or go to the EEOC with your Colorado job discrimination claims

Often the EEOC administrative process will not result in a satisfactory resolution through its settlement or other administrative procedures. The EEOC may decide to file a federal lawsuit on behalf of you and your claims. The EEOC files federal lawsuits on job discrimination claims on few complaints but if it decides to pursue yours in federal court you have options. You may allow the EEOC to represent you in court. You can also choose to have a private attorney for job discrimination represent you. This can give you more flexibility and control over your case, particularly over settlements. If the EEOC represents you in federal court then the agency is not required to take direction from you on the lawsuit.

If you have already hired an attorney for job discrimination before filing your EEOC charge of discrimination then you and your attorney will make decisions about how to proceed with a trial at that time.

Hiring an attorney for job discrimination for your Colorado state law claims

As discussed above, Colorado state law also prohibits several forms of job discrimination. Under Colorado law you may also need to file a complaint with the Colorado Department of Labor and Employment. If you file an EEOC complaint you can request to cross-file the complaint with the state. Colorado law has similar administrative procedures as the EEOC. You may need to exhaust administrative remedies applicable to state law to proceed with a lawsuit that includes state law claims.

You should talk to a Colorado attorney for job discrimination about your case before filing a complaint with either agency. Your attorney can discuss the strategic considerations behind filing your claims under federal law, state law, or a combination of the two. Once you start taking action on your claims you may make decisions that limit your procedural options. Gain legal counsel before taking those steps to put the strongest case forward.

Finding a Denver employment lawyer for job discrimination

Employment lawyers in Denver and other parts of Colorado often have experience working with job discrimination claims under federal and state law. There are many ways to find an employment lawyer to advise you on your claims. Employment discrimination claims are among the more common claims handled by employment law attorneys in Colorado. Research lawyers and schedule a consultation with one or more to discuss your claims and consider representation. Employee rights lawyers in Denver and around Colorado can discuss the issues raised in this post with you along with other important issues to your potential lawsuit.