“If I have a concern about an employee complaining about harassment or discrimination in the workplace, what am I supposed to do and what laws apply to these complaints?”
This is an excellent and common question in the workplace. Discrimination and harassment allegations should be taken seriously and treated as a priority by managers and business owners. The law protects employees from unlawful discrimination and harassment in the workplace. Employers who prioritize maintaining a positive work climate and appropriately investigate and stop discriminatory and harassing behaviors tend to have better workplaces. Those employers tend to find it easier to maintain a productive workforce, to maintain a healthy bottom line, and to ensure that unexpected legal expenses remain at a minimum. It is important for employers to have a general understanding of their obligations under Colorado anti-discrimination law, learn how to generally approach maintaining a healthy workplace, and to possess an understanding of the consequences associated with violations of anti-discrimination law.
Discrimination and unlawful harassment complaints in Colorado are generally governed by the Colorado Anti-Discrimination Act (CADA). The current statutory scheme for this law can be found in C.R.S. Title 24, Article 34 Parts 3 through 7. The act was originally passed in 1957 but has been modernized several times. The most recent amendment being on August 7, 2023 via the Protecting Opportunities and Workers’ Rights Act (POWR Act).The law aims to ensure safe, fair workplaces by requiring employers to take preventive and corrective actions to eliminate discriminatory and harassing behavior. Employers are expected to respond to complaints promptly, establish clear boundaries through strong policies, and foster respectful workplace cultures. Implementing and consistently enforcing a well-crafted employment manual is one of the most effective ways to reduce legal risk and create a compliant, productive work environment.
Legal Standards Under CADA:
CADA prohibits employers from refusing to hire, to discharge, to promote or demote, to harass during the course of employment, or to discriminate in matters of compensation, terms, conditions, or privileges of employment against any individual otherwise qualified because of disability, race, creed, color, sex, sexual orientation, gender identity, gender expression, marital status, religion, age, national origin, or ancestry. It is also unlawful for employers to retaliate against employees for making complaints about discriminatory activity or for opposing discriminatory activity. In most situations, a complainant pursing legal action needs to show in their initial complaint: (1) membership in a protected class, (2) an adverse employment action, and (3) circumstances that give rise to an inference of unlawful discrimination or harassment. The state of Colorado recently changed the standard for determining whether conduct creates an inference of unlawful discrimination or harassment. To give rise to an inference of unlawful activity, Colorado only requires that the employee found conduct or communications to be subjectively offensive to the employee and objectively offensive to a reasonable person that is also a member of the same protected class. An employer may limit liability in these cases under the law if they establish a program designed to prevent harassment, deter future harassers, and protect employees from harassment. Employers may only avail themselves of this limitation if the employer enforces their policies. Specifically, the employer must take prompt, reasonable action to investigate or address alleged discriminatory or unfair employment practices. Ultimately, the employer must take prompt, reasonable remedial actions in response to complaints of discriminatory or unfair employment practices. Also, the employer must communicate the existence and details of the program to both supervisory and non-supervisory personnel. Last, the liability limitation may vest when the employee has unreasonably failed to take advantage of the employer’s program. However, if an employee does avail themselves of an employer’s anti-harassment and anti-discrimination procedures, and the employer makes a good-faith effort to comply with the law by preventing discriminatory and unfair employment practices, employers may be able to limit the scope of damages available in such a case. The primary source of law for this section comes from C.R.S. § 24-34-402 and C.R.S. § 24-34-405.
Policy Recommendations:
Options for businesses to address the liability risks under the current state of the law are numerous but one remains the most important creating a strong anti-discrimination and anti-harassment policy with an employee complaint procedure. Good policies set forth a policy statement and they define key terms and prohibited conduct. Employers are encouraged to have complaint and reporting procedures along with policies designed to independently investigate and resolve matters which are the subject of a complaint. Employers should also consider anti-retaliation and confidentiality policies to ensure employees feel safe coming forward with concerns. Good policies often ensure discipline and corrective action. Last, employers will want to ensure that employees acknowledge in writing that all key employment policies were received.
Legal and Financial Consequences:
Employees who make successful legal claims under CADA may be able to obtain compensatory and punitive damages. They can also seek reinstatement, with or without back pay, front pay, and other equitable relief. Because the POWR Act simplified the burden of proof for plaintiffs, it has become more challenging for employers to defend these cases in litigation which is why it is recommended to seek legal counsel to discuss preventative policies (an ounce of prevention is worth a pound of cure!). Just a brief survey of relatively recent awards to plaintiffs in CADA cases can inform just how serious the potential financial damage can get. In Scardina v. Wiegand a plaintiff was awarded $16,760 in back pay and $110,000 in non-economic damages for a total of $126,760, with the judgment on the CADA claim limited to $16,760. In McFann v. Denver Health, a plaintiff was awarded $150,000 in compensatory damages for a retaliation claim under CADA, with a total judgment of $501,216.05, including back pay and front pay. In Dunlap v. Investor’s Realty, a jury awarded $350,000 in compensatory damages and $550,000 in punitive damages for CADA claims, among other awards. Now, not all adverse cases result in significant judgments such as the above. But even the smaller cases occupy an incredibly important asset, your time. The time spent, the litigation costs and the lost opportunities for your business can be just as crippling as a six figure judgment. This is why it is critical that you connect with an attorney to develop employment plans and policies to prevent discrimination and unlawful harassment in your workplace.
If you’re a Colorado employer, now is the time to review your workplace policies and ensure you’re prepared to handle harassment or discrimination complaints properly. The legal landscape has changed, and failing to act could expose your business to serious risk. Contact Business Law Group today to develop or update your anti-discrimination policies, implement effective complaint procedures, and protect your team—and your business—from avoidable legal challenges.
