Measure puts penalty on employer in lawsuits

QUICKREAD

Damages ceilings

House Bill 1269 allows for compensatory and punitive damages in state courts, but limits them to:

• Not more than $25,000 against employers with 14 or fewer employees.

• Not more than $50,000 against employers with 15 to 100 employees.

• Not more than $100,000 against employers with 101 to 200 employees.

• Not more than $200,000 against employers with 201 to 500 employees.

• Not more than $300,000 against employers with more than 500 employees.



When discrimination happens in the workplace, employees who have unfairly lost their jobs have few places to turn for help, particularly on the Western Slope, supporters of a bill to fix that say.

That’s why Rep. Claire Levy, D-Boulder, introduced a measure into the Colorado Legislature this session that would implement a new provision in discrimination cases tried in state courts that could leave small businesses liable for compensatory and punitive damages should they lose.

Trial lawyers across the state are pushing the legislation partly because Colorado is one of the few states that doesn’t allow such damages in cases involving its own civil rights laws.

“The complaining parties don’t have enough money to hire an attorney, and their claims aren’t large enough to pay an attorney from the proceeds, so oftentimes these civil rights are protected on paper but they’re not protected in fact,” said Levy, an attorney from Boulder. “House Bill 1269 will allow Colorado to join the 39 other states that allow compensatory damages for violations of the state’s civil rights laws.”

Rural attorneys, particularly those on the Western Slope, see it as an equity issue.

Grand Junction attorney Keith Killion said because the state doesn’t allow such damages, many of his colleagues won’t take employee-discrimination cases because of that lack of penalties. And taking cases to federal courts, which do allow compensatory and punitive damages, has its drawbacks, too.

First off, trials are conducted in Denver, and few rural attorneys want to handle cases from that far away, he said.

As a result, not allowing for such penalties in state court means the Colorado law has no teeth, Killion said.

“A law that prohibits an activity without any penalty isn’t much of a law,” he said. “It’s laughable.”

Killion said federal laws also exempt small businesses, leading many legitimate discrimination cases in rural parts of the state to go unchallenged.

“It’s really good if you’re an employer, because you can basically treat your employees poorly and discriminate against them based upon race or disability or gender, and there’s really not much consequence,” he said.

Barbara Thompson, executive vice president of Mountain States Employers Council, which helps small businesses deal with employee legal issues, said there is a reason federal law exempts small employers.

Defending themselves from a case can be costly, $100,000 or more just in attorneys’ fees, she said.

The state law, however, has no such exemption, and damages are limited primarily to back-pay plus interest, Thompson said.

Small employers worry that allowing for punitive damages in state court will mean more cases will be filed, she said..

“They will put small employers out of business when they are faced with defending these cases,” Thompson said. “The (punitive) damages are not the dread. It’s the attorneys’ fees and the threat of taking a small employer through a lawsuit and not giving up until there is as big a settlement as can be extracted.”

Denver attorney Diane King said exempting smaller employers and limiting cases to federal courts has led small businesses to scoff at discrimination laws. King, who specializes in employment and civil rights cases, said not holding small businesses accountable also leads to more discrimination.

“That’s especially true in small towns, where you don’t have lawyers that do these cases, and there aren’t good remedies,” she said. “People fall by the wayside. There’s nowhere for them to turn.”

She said the bill tries to address that concern by limiting damages depending on how many workers an employer has.

Small businesses, however, say the abuses also can come from employees, either from making false claims of discrimination or just trying to get as much as they can for minor infractions.

Chris Ottele, a Denver employment attorney who represents the Colorado Civil Justice League and the Colorado Association of Commerce and Industry, said the bill does nothing to fix those abuses.

“Our anti-discrimination laws are abused and misused,” he said. “The system is set up to hurt employers. Small employers and large employers are struggling with a system that is flat out not working.”


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