The Colorado Legislature has formally introduced Senate Bill 21-176, the Protecting Opportunities and Workers’ Rights (POWR) Act, which would impose sweeping changes to Colorado’s anti-discrimination law. Among other amendments, the proposal includes coverage of independent contractors, prohibits confidential settlements, eliminates administrative pre-requisites to suit and extends the timeframe to bring claims, and expands liability and limits defenses to harassment claims.    

In contrast to Title VII, which does not protect independent contractors, the bill’s most radical proposal would change the definition of “employee” in the Colorado Anti-Discrimination Act (CADA) to include all individuals who perform services for monetary compensation, including independent contractors and subcontractors, or who perform services in exchange for value other than monetary compensation, such as unpaid interns.  If the bill is enacted, Colorado businesses would become liable for unlawful discrimination or harassment of third parties with whom they contract for services, from third-party consultants to plumbers and electricians. The bill would also eliminate the exception in the definition of “employee” in Colorado employment laws previously made for people in “domestic service.”

The bill would eliminate employers’ ability to settle discrimination and harassment claims confidentially by prohibiting non-disclosure, non-disparagement, and confidentiality provisions in settlement agreements after the filing of a charge or the making of a demand, except to shield the identity of the employee.

Another significant provision in the proposed bill would change the procedures and standards for litigation of employment discrimination claims under Colorado law.  The bill would allow such claims to be filed in Colorado county or district courts without requiring the employee to first submit the claim to Colorado Civil Rights Division (“the Division”), which is Colorado’s state equivalent to the U.S. Equal Employment Opportunity Commission (EEOC).  If the bill becomes law, employees would be able to file a civil action in state court 14 days after submitting a written demand for relief to the employer.  Under current law, before filing such a suit, employees must first ask the Division to investigate their claims and wait at least six months for the Division to have the opportunity to do so. This change would significantly decrease the opportunities employers and employees have to engage in pre-suit resolution discussions, and increase employees’ leverage in such discussions by threatening their employers with an immediate lawsuit, with all its resulting fees and costs.  In addition, the bill proposes to extend the statute of limitations for state employment discrimination claims from six months to 300 days.

The bill would also change the legal standards for proving and defending against claims of unlawful harassment in the following ways:

• Eliminating the requirement that an employee show their tangible productivity has declined as a result of the harassment, and specifying that the claim “nearly always raises questions of fact,” which would reduce an employer’s ability to dispose of frivolous claims without a trial;

• Expanding the definition of unlawful employment practices to include an employer’s failure to “conduct a reasonable investigation of an employee’s complaint of harassment, discrimination, retaliation or any combination” of those allegations, “or to take prompt remedial action” in response to such a complaint; and
• Providing that an employer may use harassment training as a defense to harassment claims only if it utilizes a training program with “documented success in preventing harassment and punishing supervisors who have unlawfully harassed employees” and has had no other complaints of harassment or retaliation for reporting harassment in the past six years.

Finally, the proposed law would extend protections under CADA to include prohibition of discrimination on the basis of both marital status and “caregiver status,” with the term “caregiver” defined broadly to include anyone who “provides direct and ongoing care to a minor child or care recipient,” and eliminate an employer’s ability to conduct certain pre-employment medical examinations.

Littler will continue to monitor the progress of this bill, which, if passed, will have significant and long-term implications for employers conducting business in Colorado.