Employment law in Colorado has undergone a sea change in the past year, from mandatory sick leave, to new promotional-opportunity posting requirements, to stricter whistleblower laws, and so on. But one bill from the last legislative session that didn’t become law (but could have had a tremendous impact on employers) is the Protecting Opportunities and Workers’ Rights (POWR) Act. The legislation would have dramatically increased employers’ exposure to discrimination and harassment claims under the Colorado Anti-Discrimination Act (CADA). While the bill stalled in committee, it could potentially return in the future in one form or another.

History of POWR Act

The POWR Act (Senate Bill 21-176) was introduced during the General Assembly’s 2021 regular session in early March and was passed by the senate. The bill went before the House Judiciary Committee, where it was substantially amended, but it ultimately failed to leave the Senate Judiciary Committee and essentially “died” at that point.

In the next legislature session, however, it seems likely the Act’s house sponsors will propose a revised version.

Expanded rights and remedies

The POWR Act, if passed as revised, would have expanded employees’ rights and remedies under the CADA to unprecedented levels:

First, as of today, the CADA (like Title VII of the Civil Rights Act of 1964) covers only persons in an employee-employer relationship, not independent contractors. The POWR Act would have expanded the law’s coverage to include independent contractors, subcontractors, and their own employees.

Second, the POWR Act would have extended the CADA’s protections to domestic service providers and volunteers and required any independent contractor agreements to contain language specifying that the person/entity for whom the services are performed won’t engage in discrimination, harassment, or retaliation under the CADA.

Third, the POWR Act would have rejected the “severe and pervasive” standard for harassment claims and made any single instance of such conduct actionable (or pursuable in court). Under current law, an isolated incident of harassment may be actionable if it’s “severe,” meaning it is particularly offensive or egregious to a reasonable person. “Pervasive” harassment is actionable if it occurs frequently over a long period of time, even if the actual instances are less severe.

The POWR Act would have eliminated the standard and made any isolated incident of harassment actionable. The Act did contemplate an affirmative defense for harassment, provided the employer could show it took prompt, reasonable, and (if warranted) remedial action to cure the misconduct once it knew or should have known about it.

Fourth, procedurally, the POWR Act would have eliminated the need for employees to exhaust administrative remedies before filing a discrimination or harassment lawsuit in civil court. Rather, they could initiate a lawsuit either after filing a charge with the Colorado Civil Rights Division or submitting a written demand about the claim and giving the employer a minimum of 14 days to respond.

Similarly, the POWR Act would have expanded the CADA’s limitations period to file a charge with the division from six months to 300 days after the alleged discriminatory or unfair employment practice occurred. And, incredibly, the POWR Act would have required the division to provide an employee who files a charge with copies of previous charges against the employer, plus any position statements submitted by the business in response to those charges.

Finally, the POWR Act would have expanded the CADA’s list of protected classes to include marital status or caregiver status.

Expanded obligations and exposure

Apart from dramatically expanding employee rights under the CADA, the POWR Act would have placed additional compliance burdens on employers while also limiting available defenses to discrimination and harassment claims. For example, under the Act, employers with 20 or more employees would be required to engage in mandatory antidiscrimination and harassment training at least annually, and a failure to do so could result in significant fines.

Further, the POWR Act would have gutted an employer’s ability to defend against a harassment or discrimination claim by showing the employee didn’t use its internal channels for reporting the charge. Rather, the Act would recognize such a defense only if:

• The employer established a program reasonably designed to prevent harassment and shared the details with employees;
• No other employee had submitted an “admissible” harassment or retaliation charge with federal or state authorities in the previous six years; and
• The employee unreasonably failed to take advantage of the program.

The Act also would have treated an employer’s failure to conduct a reasonable investigation or take necessary remedial measures in response to any discrimination, harassment, or retaliation complaint (or a combination thereof) as a discriminatory or unfair employment practice.

Perhaps most significant, the POWR Act would have severely curtailed an employer’s ability to keep discrimination- or harassment-related settlement agreements confidential. Specifically, it would have prohibited nondisclosure agreements and provisions relating to discrimination/harassment allegations unless accompanied by an addendum in compliance with the Act recognizing the employee’s ability to discuss the dispute’s underlying facts with certain persons (such as immediate family or legal counsel) or as required by law.

Further, under the POWR Act, in any subsequent lawsuit against an employer, an employee could present evidence the organization entered into a nondisclosure agreement involving the same individual or individuals alleged to have engaged in the discriminatory or unfair employment practice. In those situations, the evidence could (and would) be considered by the jury or factfinder in support of a punitive damages award.

Key takeaways

While the POWR Act never made it out of committee, there’s no guarantee it won’t resurface in some form in the future. As the past legislative session has taught employers, the General Assembly is aggressively passing sweeping legislation in favor of employees’ rights and remedies. If and when the Act shows up in the next legislative session, you should pay careful attention.