Workplace Bills Introduced in Colorado Legislature

February 3, 2020

By: Colin A. Walker

With Democrats controlling both houses of the Colorado Legislature and a Democratic Governor, the 2019 Colorado Legislative session was eventful for HR practitioners and employment lawyers. The 2020 session promises to be just as interesting. Less than one month into the session, two significant workplace bills have been introduced, along with other developments that could significantly impact workplace laws.   

Off-Duty Use of Marijuana
On January 10, 2020, House Bill 1089 was introduced by Representative Jovan Melton. The bill would amend the current lawful off-duty activities statute to prohibit employers from taking adverse employment action against employees for off-duty use of marijuana as permitted by Colorado law. The bill would legislatively overrule the Colorado Supreme Court’s decision in Coats v. Dish Network, LLC, where the high court held that Colorado’s lawful off-duty activities statute did not prohibit an employer from terminating an employee for failing a drug test for marijuana even though the employee possessed a card allowing him to use marijuana for medical reasons pursuant to Colorado law. The court reasoned that, since use of marijuana is prohibited by federal law it was not “lawful” under the statute. This bill would amend the statute to provide that the prohibition on an employer terminating an employee for lawful off-duty activities extends to activities that are lawful under state law even if those activities are not lawful under federal law. 

Arbitration Fairness
On January 13, 2020, Senate Bill 20-093, the "Consumer and Employee Dispute Resolution Fairness Act" was introduced. In an effort to promote efficiency and justice in arbitration proceedings, the bill would substantially change the law with regard to certain arbitration agreements, including arbitration agreements between employers and employees. Among other things, the bill would increase the disclosure requirements of arbitrators, expand the circumstances under which an arbitrator would be disqualified for partiality, and provide for an award of attorney’ fees for a successful challenge to an arbitrator for partiality.  In addition, the bill would prohibit the following provisions in standard form arbitration agreements, including arbitration agreements between employers and employees:

  • Requiring arbitration more than 100 miles from the employee’s home;
  • Waiving certain damages;
  • Preventing the employee from asserting a claim for more than 60 days;
  • Allowing the employer to unilaterally select the arbitrator;
  • Limiting costs and fees in a way that is inconsistent with Colorado law.

This is not an exclusive list. Including any of these provisions in an arbitration agreement with an employee would subject the employer to a lawsuit by the employee under the Colorado Consumer Protection Act, which carries stiff penalties as well as recovery of attorneys’ fees and costs by a prevailing employee. Conspicuously absent from the list of impermissible provisions is a prohibition on waivers of class actions, which a recent U.S. Supreme Court case held to be enforceable.

The bill is likely to increase the costs of arbitration, lengthen arbitration proceedings, and would make it more difficult for employers to enforce arbitration agreements in Colorado.

Loss of Vacation Upon Separation from Employment
In addition to new legislation, two Colorado court cases could have a significant impact on the law regarding paid vacation in Colorado. The Court of Appeals has set oral argument in Blount, Inc. v. Colorado Department of Labor and Employment, for March 17. In this is case, the court will consider whether an employer can require an employee to forfeit vacation under a vacation policy, which provides that unused vacation is not paid upon separation from employment.  The Department of Labor has cited its own new regulations on vacation in support of its argument that such policies are not enforceable, raising the possibility the court could invalidate these regulations. In a similar case, Nieto v. Clark’s Market, Inc., the employer has asked the Colorado Supreme Court to review a Court of Appeals decision, which held that an employer’s policy could require an employee to forfeit accrued vacation if the employee was terminated or failed to provide two weeks’ notice of resignation. The high court has not yet decided whether to hear the case. 

The new COMPS Order, which significantly changes the law of overtime pay other wage/hour issues in Colorado, is discussed in a separate article.

More to Come…
This is by no means the end for the 2020 legislative session which will end in May. Democratic legislators continue to work on a paid family leave bill, known as “FAMLI” in the last legislative session, and the Governor has said that this is also a priority for him. An alternative market-based approached has been proposed by several businesses and business organizations. Other workplace bills are also expected. Stay tuned!