Powerful Changes Approaching with Colorado’s POWR Act

On June 6, 2023, Colorado’s Governor Polis signed Senate Bill (SB) 23-172, the “Protecting Opportunities and Workers’ Rights Act (POWR),” into law. This multi-faceted Act will create fundamental changes to employment law, specifically amending the Colorado Anti-Discrimination Act (CADA). The POWR becomes effective August 7, 2023, and is summarized below.

Changes to the Harassment Standard

The POWR removes the “severe or pervasive” standard in asserting a harassment claim, with an explanation that the existing harassment framework created by the judiciary is not sufficient. Specifically, the POWR says the “’severe or pervasive’ standard created by courts to determine if harassment at work is a discriminatory or unfair employment practice does not take into account the realities of the workplace or the harm that the workplace causes.”

Under the POWR, “harass” or “harassment” is broadened and redefined as: “to engage in, or the act of engaging in, any unwelcome physical or verbal conduct or any written, pictorial, or visual communication directed at an individual or group of individuals because of that individual’s or group’s membership in, or perceived membership in a protected class …” Again, evidence of severity or pervasiveness is no longer required. However, any conduct and/or communication must be both subjectively offensive to the individual alleging harassment and objectively offensive to a reasonable individual who is a member of the same protected class. The POWR outlines three scenarios in which harassment occurs:

1. “The submission to the conduct or communication is explicitly or implicitly made a term or condition of the individual’s employment,”
2. “Submission to, objection to, or rejection of the conduct or communication is used as a basis for employment decisions affecting the individual,” or
3. “The conduct or communication has the purpose or effect of unreasonably interfering with the individual’s work performance or creating an intimidating, hostile, or offensive working environment.”

Although the POWR qualifies the broad new harassment standard by reminding employers that “petty slights, minor annoyance, and lack of good manners do not constitute harassment,” it still allows for claims based on such facts if, given the totality of circumstances (a nine-factor test), those behaviors meet the standard discussed above.

If a plaintiff asserts a prima facie case of harassment, employers may still respond with an affirmative defense by showing: 1) there is a program established to prevent and deter harassment and protect employees (in addition to taking prompt, reasonable action in response to harassment allegations); 2) the employer communicated the existence of the program; and 3) the employee unreasonably failed to take advantage of the program.

Nondisclosure Agreements

Nondisclosure agreements are generally considered void unless specific requirements are satisfied. For a nondisclosure agreement to be valid, the agreement: 1) must apply equally to all parties; 2) it contains a provision expressly stating that employees may disclose alleged discrimination or unfair employment practices; 3) said disclosure is not considered disparagement; 4) any liquidated damages are not punitive and are reasonable. An employer violates POWR when an employer presents or tries to enforce a void agreement. Note that each violation of the nondisclosure requirements creates liability for the employer in the form of actual damages, reasonable costs and attorneys’ fees, and a penalty of five thousand dollars ($5,000.00) per violation. Employers may mitigate their liability by showing that the employer acted in good faith.

Disability Discrimination

Previously, when determining a discriminatory or unfair employment practice in the context of a disability claim, CADA considered whether “the disability has a significant impact on the job.” The POWR eliminates the requirement that an individual’s disability has “a significant impact on the job” and specifies that the reasonable accommodation should “allow the individual to satisfy the essential functions of the job.”

Expanding the Definition of Protected Classes

The POWR adds “marital status” as a protected category under the law.

Recordkeeping

The POWR requires employers to maintain “any personnel or employment record” for a minimum of five years. Further, employers must maintain complaints of discrimination or unfair employment practices in a designated repository.

Notices

The POWR does not add new notice requirements; however, there is an existing poster requirement under CADA. The Colorado Department of Regulatory Agencies, Civil Rights Division, may produce a new poster that employers will have to place in the workplace. At the time of publication, a new poster is not available yet.

Conclusion

In advance of the POWR going into effect, employers should update personnel and employee handbooks to incorporate these changes. Buchanan’s labor and employment attorneys can assist with the necessary preparation for achieving compliance with these new requirements.