Note: This the second of two alerts covering the Colorado POWR Act. Find the first one here.
On Aug. 7, the Protecting Opportunities and Workers’ Rights (POWR) Act (the “Act”) went into effect, which significantly overhauls and expands the Colorado Anti-Discrimination Act (“CADA”). The POWR Act is considered to be the most sweeping and significant employment-related legislation passed during the 2023 Colorado legislative session. POWR serves as a resounding rejection of Colorado courts’ interpretation of Colorado’s existing anti-workplace harassment laws and adopts a much lower threshold that workers must satisfy to prevail on employment-related harassment and discrimination claims.
Other major changes include the codification of an affirmative defense available to employers against harassment and discrimination charges; the curtailment of nondisclosure and non-disparagement restrictions in agreements with Colorado workers; the addition of marital status as a protected class; and creation of onerous recordkeeping requirements for personnel records and complaints of discriminatory or harassing conduct.
Every section of POWR will have profound implications for companies employing or contracting with Colorado workers, so it is important to understand these changes and how they may impact your organization going forward. Previously, we gave an overview of the POWR Act’s impact on nondisclosure and non-disparagement provisions. Below, we cover the removal of the “severe or pervasive” threshold for claims of workplace discrimination or harassment, the addition of marital status as a protected class, a new disability safe harbor, rigorous new recordkeeping standards and practical advice in crafting compliant policies related to these changes.
Removing the “Severe or Pervasive” Requirement
The POWR Act lowers the burden on Colorado workers who have alleged discriminatory or harassing conduct in the workplace. Previously (and currently under federal Title VII claims), an individual needed only to show that a workplace was permeated with discriminatory conduct that was sufficiently “severe or pervasive.” Such conduct must be enough to alter the conditions of employment and create an abusive working environment. To determine whether the alleged discriminatory conduct was sufficiently severe or pervasive, courts would look to the totality of the circumstances, including factors such as frequency, whether it was physically threatening or humiliating, and whether it unreasonably interfered with an employee’s work performance. This was a high bar, with courts finding that even the repeated use of reprehensible derogatory remarks was not enough to constitute severe or pervasive harassment. The POWR Act summarily rejected this requirement by adding subsection (1.3) to C.R.S. § 24-34-402. The Act states that harassment does not need to be severe or pervasive to constitute a discriminatory or an unfair employment practice, and that the frequency with which harassment in the workplace occurred in the past is not relevant. The harassing conduct or communication violates the statute if such conduct is subjectively offensive to the individual alleging harassment, is objectively offensive to a reasonable person of the same protected class, and:
- Submission to the conduct or communication is explicitly or implicitly made a term or condition of the individual’s employment;
- Submission to, objection to or rejection of the conduct or communication is used as a basis for employment decisions affecting the individual; or
- It has the purpose of unreasonably interfering with the individual’s work performance or creating an intimidating, hostile or offensive work environment.
Despite the Act’s broad reach, it does not create a general civility statute governing the workplace. The Act keeps intact a totality of the circumstances test under which petty slights, minor annoyances, and lack of good manners constitute unlawful harassment only if such conduct meets the standards set forth in CRS 24-34-402(1.3)(a) and considering the relevant factors set forth in CRS 24-34-402(1.3)(c)(II).
Practical Guidance and Best Practices for Anti-Harassment and Antidiscrimination Policies
The good news for employers is that they were given a tool by the POWR Act to help protect their businesses from liability for harassment claims under CRS 24-34-402. The Act codified a judicially created affirmative defense (called the Faragher-Ellerth affirmative defense) for employers that was previously available but that is now governed by the statute in subsection (1.5). This defense is available when an employee proves that a supervisor unlawfully harassed that employee but the employer took reasonable steps to combat the harassment.
To ensure the defense is available to an employer facing a discrimination or workplace harassment claim, the employer will need to institute an anti-harassment policy that, at a minimum, meets the following criteria:
- Establishes an appropriate channel for employees to submit complaints of alleged discriminatory or unfair employment practices;
- Tasks the employer to take prompt, reasonable action to investigate or address the complaint;
- Tasks the employer to take prompt, reasonable remedial action when warranted by the complaint and investigation; and
- Is fully communicated to both supervisory and nonsupervisory employees.
Implementing, communicating and strictly following such a policy will greatly minimize an organization’s liability by ensuring the affirmative defense is available if the employee-plaintiff fails to take advantage of that policy.
In addition to race, color, national origin, ancestry, disability, creed, religion, age, sex, sexual orientation, gender identity and gender expression, the POWR Act includes “marital status” among Colorado’s legally protected classes. Employers, labor organizations and employment agencies should be sure that their written anti-harassment and anti-discrimination policies and job postings include marital status as a listed protected class.
Modified Safe Harbor for Employment-Related Decisions Based on a Worker’s Disability
The bill also lessens the burden on employers in making employing decisions related to a worker’s disability. Employers may now assess the suitability of a disabled individual for a position or training program under a new lens: 1) whether there exists no reasonable accommodation that would allow the worker to satisfy the essential functions of the job, and 2) whether the disability actually disqualifies the individual from the job. If the answer to both questions is yes, then the employer does not run afoul of anti-discrimination laws by refusing to hire or admit into a training program, discharging, promoting or demoting the disabled worker because of the disability. The change removes a third prong currently required—whether the disability has a significant impact on the job. The new safe-harbor standard also applies to employment agencies that refuse to list or refer a disabled individual for a position.
Recordkeeping
The last requirement imposed on employers by the POWR Act relates to the preservation of any personnel or employment records, obligations enshrined in C.R.S. Section 24-34-408. Employers must keep all personnel or employment records the employer made, received or kept for at least five years after the later of: 1) the creation or receipt of the record, or 2) the personnel action about which that the record pertains or of the final disposition of a charge of discrimination. For purposes of the recordkeeping statute, personnel or employment records include discrimination and unfair employment practices complaints, job application forms, and any other records related to hiring, promotion, demotion, transfer, layoff, termination, rates of pay or other terms of compensation, and selection for training or apprenticeship (and records or training provided to employees.
Further, the statute imposes a new requirement that employers maintain a repository of all written or oral complaints of discriminatory or unfair employment practices, as those terms are now defined by CADA. These complaints are also subject to the five-year retention period.
What Next?
While these changes will help protect employees, employers will need to limit their liability by fostering a harassment-free workplace and instituting sound policies to combat discriminatory harassment in the workplace. Contact your Brownstein attorney or one of the authors for help navigating compliance with the POWR Act.
THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING THE COLORADO POWR ACT. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.