Controversial “Sue your Boss” Bill signed into law

by Kate W. Beckman

While discrimination by employers with any amount of employees is illegal; until recently, the law in Colorado made a distinction between employers with fifteen or fewer employees.  The previous law limited available remedies, even in cases of intentional discrimination, to those damages which “make the employee whole,” namely earning back pay or getting their position back.  Colorado was one of only eight states that did not have anti-discrimination remedies for businesses with less than 15 employees.  While Federal employment antidiscrimination laws also allow such damages, only employers who employ 15 or more employees are subject to federal law.

On April 26, 2013, the Senate passed House Bill 1136, which was signed into law by Governor Hickenlooper on May 6, 2013.  This legislation extends anti-discrimination protections to small businesses with fewer than fifteen (15) employees.  The bill also creates an employment discrimination law on the basis of sexual orientation and removes the maximum age limit for a claim of age discrimination which is currently set at seventy (70) years.  Notably, the legislation provides employees with the right to sue small businesses for compensatory damages, punitive damages, and unlimited attorney’s fees in an employment lawsuit brought under state law against employers where intentional discrimination is proven; thereby increasing the amount of money an employer might have to pay their employee if the employer loses in court.

Compensatory damages are to compensate the plaintiff for other pecuniary losses, emotional pain and suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonmonetary losses.  Punitive damages are intended to reform or deter the defendant from engaging in conduct similar to that which formed the basis of the lawsuit.  If the plaintiff shows by a preponderance of the evidence that the defendant engaged in a discriminatory or unfair employment practice with malice or reckless indifference to the rights of the plaintiff, the plaintiff may recover punitive damages.  Finally, the typical rule in the United States is that each party pays their own attorney’s fees.  The Attorney’s fees provision of this measure would require the winning party’s attorney’s fees be paid by the losing party.

However, the bill limits the amount of total available damages placing a cap of $25,000 per case for small businesses with between five (5) and fourteen (14) employees and $10,000 for companies with fewer than five (5) workers.  The bill also directs the commission or court to consider the size and assets of the defendant and the egregiousness of the intentional discriminatory or unfair employment practice when determining the amount of damages to award the victim.

Supporters argue that the bill makes the workplace safer for all employees of small businesses.  Opponents argue that it will only open the door for frivolous lawsuits.  However, Senator Majority Leader Morgan Carroll states showing “intentional proof of illegal discrimination” can be very difficult to prove at trial.  Still, small businesses in the area state that they will have to purchase insurance to protect their business and may be reluctant to retain problem employees.  The legislation will not apply until January 2015 so Coloradoans will have to wait to see the true effect.

Kate W. Beckman is an associate at Bryan E. Kuhn, Counselor at Law, P.C. Her practice focuses on employment law, business law, and civil litigation. Kate is an active member of the Colorado Bar Association and Denver Bar Association. She is admitted to practice in Colorado, the United States District Court for the District of Colorado and the Tenth Circuit Court of Appeals. Kate received her J.D. from the University of Denver Sturm College of Law in 2010. She can be reached by email, her firm’s website, Facebook, and invites you to reach out to her on LinkedIn.