Smaller employers more exposed to discrimination suits under new law
Until this year, Colorado law did not permit an award of compensatory or punitive damages or attorney fees and costs to an employee who prevailed in a complaint before the Colorado civil rights commission or in a lawsuit alleging a discriminatory or unfair employment practice, even in cases of intentional discrimination. While federal laws have long allowed such damages, only employers who employ 15 or more employees are subject to the federal laws. That meant smaller employers enjoyed a protected status where they were unlikely to be sued for discriminatory practices under either state or federal law.
That all started to change when Gov. Hickenlooper signed into law the Job Protection and Civil Rights Enforcement Act of 2013, which amends the Colorado Anti-Discrimination Act (CADA). CADA is the state law prohibiting employment discrimination because of disability, race, creed, color, sex, sexual orientation, religion, age, national origin, or ancestry. Despite the amendment being signed in 2013, it only started applying to cases this year.
Before the amendment, CADA allowed a successful employee to recover front pay, back pay, interest on back pay, reinstatement or hiring, and other equitable relief as determined by the commission or court. The amendment now allows a successful employee to recover compensatory damages if the employee proves intentional discrimination. Compensatory damages are to compensate an employee for miscellaneous pecuniary losses, emotional pain and suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses.
The amendment also allows a successful employee to recover punitive damages, which are additional damages to punish the employer (with the intent of discouraging the employer or others from engaging in discriminatory practices). In order to recover punitive damages, the employee must show that the employer engaged in a discriminatory or unfair employment practice with malice or reckless indifference to the rights of the employee.
The ability to recover compensatory and punitive damages greatly increases employees’ potential claims. However, the amendment limits the total amount of compensatory and punitive damages that an employee can recover based on the number of employees in the business, with a range from $10,000 (for an employer with 1 to 4 employees) to $300,000 (for an employer with 501 or more employees). The commission or the court is required to consider the size and assets of the employer and the egregiousness of the discriminatory or unfair employment practice when making its award determination.
In contrast to previous law, the amendment also allows a successful employee to recover attorney fees and costs. However, a successful employer does not enjoy the same right of recovery (unless the court deems the employee’s lawsuit groundless, frivolous or vexatious).
Under previous law, employees under the age of 40 or over the age of 70 were not allowed to bring age discrimination claims. The amendment now allows anyone over the age of 40 to make an age discrimination claim. However, compensatory and punitive damages are not available in cases based solely on age discrimination. Instead, an employee proving willful age discrimination may receive an amount equal to twice the employee’s pecuniary damages.
Federal law does not cover claims based on sexual orientation (as does CADA). These claims will now be more attractive in Colorado because of the amendment.
In sum, employees can now recover attorney fees and compensatory and punitive damages in lawsuits brought under CADA, regardless of the number of employees the employer employs. Colorado employers with fewer than 15 employees are likely to see more employment discrimination claims because of the significant increase in an employee’s potential recovery. These claims will likely be brought in state court, which is generally believed to be more plaintiff-friendly than federal court. Small businesses should be especially aware of the new law and ensure that they take steps to prevent discrimination in the workplace.
Noah Klug is owner of The Klug Law Firm, LLC, in Summit County, Colorado. He may be reached at 970-468-4953 or Noah@TheKlugLawFirm.com.
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