Recent Employment Law Developments Affecting the Banking Industry

September/October 2013

By: Brent T. Johnson

Colorado Banker

The Colorado Legislature this past session enacted several new and amended laws affecting the employer/employee relationship. In late June, the U.S. Supreme Court issued two decisions interpreting federal anti-discrimination statutes.  This article looks at how these developments affect the banking industry in Colorado.

Colorado Legislative Developments

House Bill 13-1136.  Titled the “Job Protection and Civil Rights Enforcement Act of 2013,” this statute significantly expands the remedies available to individuals alleging employment discrimination in violation of the Colorado Anti-Discrimination Act (“CADA”).  CADA will now allow jury trials and awards of attorney fees (effective August 7, 2013), and awards of compensatory and punitive damages (effective January 1, 2015).  Most of these changes will have little practical impact on banks, however, because federal laws already provide most of these remedies in cases against employers with 15 or more employees.

Banks and other larger employers will, however, for the first time be exposed to liability for these types of damages in cases involving discrimination on the basis of sexual orientation, which is prohibited under CADA but not under federal law. That is also true if an employer fires or refuses to hire an individual because that person is married to or plans to marry another employee (subject to some exceptions), because federal law does not prohibit that type of marital discrimination, while CADA does.  Colorado banks should keep in mind that potential liability will now increase in cases of discrimination based on sexual orientation and marital status.

Once all of the changes to CADA become effective, many employment law attorneys believe that more employment discrimination cases may be filed in state court under CADA, rather than in federal court under federal laws.  That is because federal court judges are widely considered to be more likely than state court judges to grant pretrial motions to dismiss weak claims.  If fewer cases are thrown out before trial, the cost of settlement may increase, as employers will then be faced with the cost of litigating cases all the way through trial and the uncertainty of how a jury will decide the case.

HB 13-1222. Titled the “Family Care Act,” this statute applies only to employers who are subject to the federal Family and Medical Leave Act (“FMLA”) and employees who are eligible for leave under the FMLA.  Under this new Colorado law, effective August 7, 2013, an employee is entitled to FMLA-like leave to care for a person who has a serious health condition if that person is the employee’s partner in a civil union or in a domestic partnership either registered with the state or recognized by the employer. The FMLA does not provide for leave to care for a same-sex partner in a civil union or registered domestic partnership.  

Although the Colorado law states that it does not increase the total 12 weeks of FMLA leave allowed in any 12-month period, that may not always be the case.  If Family Care Act leave to care for a domestic partner were taken first, that would not qualify under federal law as FMLA leave, so the employee would not be prevented from later taking 12 weeks of additional leave under the FMLA. If FMLA leave is exhausted first, however, that should prevent the employee from taking additional leave under the Family Care Act during the same 12-month period.

HB 13-1046.  This law provides some privacy protection to employees’ use of social media.  It prohibits employers from requiring applicants or employees to disclose their user name or password for any personal account or service through the employee’s or applicant’s personal electronics communications device (computers, phones, etc.), or to change privacy settings, or to allow the employer or his agent to be added to the person’s list of contacts.

There are limited exceptions for investigations of unauthorized downloading of employer information or to ensure compliance with securities or financial laws and regulations.  The only remedy provided by the statute is the right to complain to the Division of Labor, which has the power to investigate, issue findings, and impose a fine of up to $1,500 for the first offense and $5,000 for each subsequent offense.     

SB-018.  Titled the “Employment Opportunity Act,” this statute restricts most Colorado employers’ ability to use consumer credit information to evaluate applicants or employees.  Significantly for banks, however, that restriction does not apply to any “bank or financial institution.”

However, another section of the law does not include an exception for banks. It provides that any employer who relies upon consumer credit information to take adverse action against an applicant or employee is required to make written disclosure to the employee or applicant of that fact and of the information upon which the employer relied. This is similar to disclosure requirements under the federal Fair Credit Reporting Act, but the Colorado law may apply to a broader range of consumer credit information than is covered by federal law.  The only remedy provided by the Colorado statute is the right to complain to the Division of Labor, which has the power to investigate, issue findings, and impose a fine of up to $2,500. 

U.S. Supreme Court Decisions

Vance v. Ball State University. In this decision issued on June 24, 2013, the Supreme Court addressed the issue of who constitutes a “supervisor” for purposes of an employer being held liable for a hostile work environment.  Under fairly technical rules previously established by the Court, an employer is more likely to be held liable if harassment is by a supervisor, rather than just by a co-worker, so the distinction can be important. 

The plaintiff in this case, Vance, alleged that she had been harassed by Davis, that Davis was her supervisor, and that the employer was therefore liable for the harassment. The Supreme Court ruled that because Davis did not have the power to take tangible employment actions against Vance, he did not qualify as her “supervisor,” and the employer was not automatically liable for the harassment.  Tangible employment actions include such actions as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a significant change in benefits.  Merely having the power to assign daily tasks is not sufficient.  An employer can still be held liable for harassment by a co-worker if the employer is found negligent in allowing the harassment to occur.

This decision will make it more difficult for some plaintiffs to prevail on hostile work environment claims.  Banks and other employers may also want to take this decision into account when deciding which management employees should be authorized to take tangible employment actions.  Imposing more centralized control over such decisions may help avoid liability in some cases.

University of Texas Southwestern Medical Center v. Nassar.  Also decided on June 24, 2013, this case imposed a greater burden of proof on plaintiffs asserting claims of retaliation under Title VII (the federal statute prohibiting discrimination on the basis of race, color, sex, religion, and national origin).  In cases asserting discrimination under Title VII, the plaintiff only needs to prove that his or her protected status was one of potentially many motivating factors in the decision to take adverse action against the plaintiff.  In Nassar, however, the Supreme Court ruled that claims of retaliation against a plaintiff for engaging in protected action under Title VII require the plaintiff to prove that “but for” the employer’s desire to retaliate, the adverse action would not have been taken.  It is not sufficient to merely show that retaliation was one of several motives for the action.

The Court’s decision in Nassar is a technical one, and it shouldn’t have any effect on how banks conduct business or handle employment matters (retaliation is to be avoided no matter what the burden of proof may be).  For employers defending against such claims, however, the Court has made it more difficult for employees to prevail.


As more and more employment laws continue to be enacted, amended, and interpreted by state and federal legislatures and courts, it becomes increasingly important for banks and other employers to stay on top of the changes.  Consulting with legal counsel before taking significant employment actions may often be a cost-effective way to reduce legal fees and exposure in the employment area.

This Article is published for general information, not to provide specific legal advice. The application of any matter discussed in this article to anyone's particular situation requires knowledge and analysis of the specific facts involved.

Copyright © 2013 Fairfield and Woods, P.C., ALL RIGHTS RESERVED.

Comments or inquiries may be directed to: Brent T. Johnson