Daphne Shih Gebauer

To round out the major legislative changes that occurred in 2022 is HB 22-1119, the Colorado legislature has greatly expanded the power of citizens and public employees to combat governmental fraud and waste by passing the Colorado False Claims Act.  Although this amendment has not been reported on very widely (with the laudable exception of Jim Flynn for The Gazette), it is the law that I am personally the most excited about and believe will make a significant difference in the battle to reduce governmental fraud and waste in Colorado.

HB 22-1119 is a major improvement on Colorado’s previous False Claims Act, which was passed in 2010 and limited to Medicare/Medicaid fraud.  The new Colorado False Claims Act is modeled after the federal False Claims Act (also known as the “Lincoln Law”) that was passed after rampant fraud on the government during and after the Civil War.

The federal False Claims Act, like the Colorado False Claims Act, empowers citizens with knowledge of fraud and waste to bring qui tam actions on behalf of the government should the attorney general decline to pursue a case against the defendant.  These whistleblowers, or “realtors,” prosecute fraud claims in the name of the government and are entitled a percentage of any funds that are recovered.

Both federal and Colorado False Claims Acts also provide a cause of action for individuals who face retaliation after complaining about or reporting fraud.  This retaliation provision is particularly important for employee whistleblowers, who often face significant pressure, harassment, and termination by their employers after raising fraud complaints.

The expansion of the Colorado False Claims Act is particularly important in that it now extends retaliation protections to public employees who are not employees of the state.  While state employees are entitled to separate protections under CRS 24-50.5-103, non-state public employees (such as employees of cities and school districts) had very limited or no remedies if they are retaliated against for blowing the whistle on fraud before the passage of the Colorado False Claims Act.  Under HB 22-1119, non-state public employees are now able to bring wrongful termination claims on their own behalf if they are retaliated against for attempting to stop fraud on the government.

If you have questions or need help navigating this area of employment law, please reach out to our firm or make an appointment here.  We welcome your suggestions for future topics as well.

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*As always, subject to the usual disclaimers:  

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website may contain links to other third-party websites; such links are only for the convenience of the reader, user, or browser. Tava Employment Law does not recommend or endorse the contents of the third-party sites. 

Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers.  

All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed. The content on this posting is provided “as is” and no representations are made that the content is error-free.

Adding on to a busy summer of Colorado employment law changes, major changes to the Colorado Wage Act was approved by Governor Polis on June 3, 2022.

The Wage Theft Employee Misclassification Act (SB22-161) introduces new notice provisions, increases penalties, and expands the enforcement powers of the Division of Labor Standards and Statistics (DLSS).  SB22-161 also eliminates the possibility of attorney’s fee-shifting in favor of employers, creates a new private right of action to enforce the CWA’s anti-retaliation provision, and expands the right of employees to bring wage claims on behalf of both themselves and those employees who are similarly situated.

Most of the provisions of SB22-161 will come into effect on January 1, 2023.

Increased Penalties

Like the current (and previous) versions of the Colorado Wage Act, SB22-161 will give employers fourteen days from an employee’s wage demand to tender the amount that they believe (in good faith) to be in dispute.  Should an employer fail to pay the wages owed, SB22-161 increases the penalty due to the employee to 200% of the wages owed, a major increase over the previous Act’s penalties (125% of wages owed up to $7,500, and 50% of wages owed over $7,500).

SB22-161 further increases the penalty for willful withholding of wages to 300% of wages owed, which is a substantial increase over the current 50% penalty.  The definition of “willful” conduct has also been expanded, allowing employees to show that an employer acted “willfully” by showing the employer failed or refused to pay a demand within the past five years.  This replaces the previous threshold which required that an employee show the employer received a judgment for failure to pay wages.

New Notice Requirements for Paycheck Deductions for Theft

In a change to the final paycheck requirements under C.R.S. § 8-4-105, SB22-161 now requires that an employer give notice to the employee within ten days of termination before making any deduction of pay for missing property.  If the employee returns the property within fourteen days of notice, the deducted amount is required to be repaid to the employee.

Attorney’s Fees

Under the previous version of the CWA, employees who sought the assistance of DLSS to recover lost wages had no means of recovering attorney’s fees in the same way that private litigants would in court.  SB22-161 grants DLSS the new ability to award attorney’s fees to employees who recover more than $5,000 in unpaid wages, opening the possibility for employees to both utilize DLSS’s services in recovering unpaid wages and retaining private counsel for assistance.

Complaints on Behalf of those Similarly Situated

SB22-161 has modified several sections of the CWA to allow employees or DLSS to bring claims on behalf of themselves and now those who are similarly situated to themselves.  In other words, this means that an employee bringing a complaint of systemic overtime, pay violations, or other actions prohibited by the CWA may seek relief on behalf of themselves and all other employees who work or worked under the same conditions, past or present.  Although this expansion of the CWA has not received much attention, it has the potential for increasing potential liability for employers by a greater degree than any other change to the CWA.

By expanding the right of an employee to bring wage claims on behalf of others, SB22-161 essentially grants an employee the ability to bring a class-action type wage complaint against an employer.  This expansion of language in the CWA will potentially multiply the amounts at issue in any given wage claim by many times, which will be compounded by the increased penalties in SB22-161.

Retaliation

The August 2022 revision to the CWA also included a new retaliation provision, which allows an employee who has been retailed against for filing a wage complaint (or who assisted another employee in filing or prosecuting their complaint) to recover back pay, reinstatement or front pay, penalties, liquidate damages, and injunctive relief.  The retaliation provision also provides for attorney’s fee-shifting to a prevailing employee.

Enforcement

Finally, SB22-161 expands DLSS’s powers to enforce the CWA by allowing DLSS to enter citations, notices of assessment, and orders against employers as orders of court, thereby allowing an employee to seek writs of garnishment for unpaid judgments.  DLSS is also empowered to enter administrative liens – similar to child support liens – against an employer’s real or personal property, and to assess additional fines for late payments of past-due wages.

Takeaway

SB22-161 greatly increases the potential liability for employers for unpaid or improperly paid wages under the Colorado Wage Act and grants significant new rights to employees and DLSS.  More information about the Colorado Wage Act, INFO guidance, and information about how to file a wage complaint with DLSS may be found here.

If you have questions or need help navigating this area of employment law, please reach out to our firm or make an appointment here.  We welcome your suggestions for future topics as well.

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*As always, subject to the usual disclaimers:  

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website may contain links to other third-party websites; such links are only for the convenience of the reader, user, or browser. Tava Employment Law does not recommend or endorse the contents of the third-party sites. 

Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers.  

All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed. The content on this posting is provided “as is” and no representations are made that the content is error-free.

Colorado’s non-competition statute, C.R.S. 8-2-113, has long created confusion due to its seemingly simple but hotly contested exceptions to the state’s general prohibition on non-competition agreements. HB 22-1317, which was signed into law today, significantly changes Colorado’s non-competition law by eliminating or restricting two of the most-used non-compete exceptions, adding notice requirements, and additional penalties for enforcement of a void agreement. 

Removal of Exceptions 

 The managerial and professional staff exemption will be removed and replaced with an exception for the protection of trade secrets for highly compensated employees (HCE) as defined by the CDLE. HCEs are current employees who earn a little more than $100,000 per year, and the new statute requires that the employee earn at this threshold both at the time the non-compete was signed and at the time the non-compete is enforced. The previous exception for trade secrets will now only apply if the HCE thresholds are met, and must also be no broader than reasonably necessary to protect those trade secrets.  

The non-competition statute will also permit an exception allowing a prohibition on the solicitation of customers by former employees who earn at least 60% of the HCE salary threshold if the non-compete is narrowly tailored to protect trade secrets.  

The law’s current requirement that restrictions be reasonable in time and geographic distance area remain, as do exceptions for recovering training costs or non-competition agreements signed upon the purchase or sale of a business.  

New Procedural and Notice Requirements 

The revised non-competition statute also adds a new notice requirement for employers in the form of a separate notice to employees that the employee is under a non-competition agreement and the terms of the non-compete. The employer must obtain the employee’s signature on the notice as well. Failure to provide notice will lead to the non-compete being found void.  

Penalties 

HB 1317 imposes potential liability against employers who attempt to enforce void non-compete agreements. The law provides for actual damages, reasonable costs, attorney’s fees, and statutory penalties of up to $5,000 per worker harmed. Given that non-compete litigation is often complex, fact-specific, and highly contentious, the addition of attorney’s fees and costs is likely to multiply the potential liability in non-compete cases by many times the actual damages at issue. 

Forum Selection and Choice of Law 

Finally, HB 1317 requires that non-compete agreements apply Colorado law and select Colorado as the forum state in order to be enforceable against any employee who either worked or resided in Colorado at the time of termination. This requirement addresses the common situation where a multi-state employer designates one favorable forum and choice of law for all employees.  

Takeaways from the changes in Colorado’s Non-Competition Law

The changes in HB 1317 will take effect on August 9, 2022. Although HB 1317 is prospective only, the scope of change to Colorado’s non-competition laws creates significant new hurdles to any employer looking to enforce non-competition agreements with former employees. 

If you have questions or need help navigating this area of employment law, please reach out to our firm or make an appointment here. We have significant experience drafting, negotiating, and litigating non-compete agreements. We welcome your suggestions for future topics as well. 

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*As always, subject to the usual disclaimers:  

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website may contain links to other third-party websites; such links are only for the convenience of the reader, user, or browser. Tava Employment Law does not recommend or endorse the contents of the third-party sites. 

Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers.  

All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed. The content on this posting is provided “as is” and no representations are made that the content is error-free. 

The last few weeks have seen a torrent of new employment laws pass in the Colorado legislature.  Today we will discuss the most recent changes to the Colorado Anti-Discrimination Act (CADA) today, and will be posting separately on changes to Colorado’s non-compete statute and Wage Claim Act very soon.

House Bill 22-1367 passed Monday night and makes multiple amendments to the Colorado Anti-Discrimination Act (CADA).  These changes include:

• Expanding the definition of “employee” to include domestic workers;
• Extending the amount of time an employee has to file a complaint of discrimination under CADA from 180 days to 300 days after the unfair employment practice took place; and
• Expands remedies in age discrimination cases to match those available under all other protected classes.

These changes are notable and represent a significant expansion of rights and remedies for employees.

Domestic Employee Discrimination

First, there are an estimated 2.2 million domestic workers in the United States and tens of thousands of domestic workers employed in Colorado.  Domestic workers are individuals who are employed by a household or individual to perform duties in private residences and therefore include nannies, housekeepers, home aides, and more.  The Colorado Anti-Discrimination Act has historically exempted domestic workers from CADA’s definition of “employee” until now.

An expansion of CADA to include domestic workers will require potential employers to not discriminate, refuse to hire or promote, or fire or demote domestic employees because of their disability, race, creed, color, sex, sexual orientation, gender identity, gender expression, religion, age, national origin, family status, or ancestry.

Domestic employees may now file charges of discrimination with the Colorado Civil Rights Division (CCRD), and employers – that is, households – will be required to respond to the CCRD’s requests for information and interviews.

300 Day Filing Deadline

Under the previous version of CADA, employees had a maximum of 6 months, or 180 days, to file a charge of discrimination with the Colorado Civil Rights Division (CCRD) after a CADA violation or waive their claim.  Although 6 months may seem like a long period of time, the CCRD’s intake process for self-represented employees does not toll the clock on the 180-day deadline, and many employees do not become aware of the filing requirement until close to the deadline.

HB 1367’s amendment will extend the deadline to file complaints under CADA to 300 days, thereby matching the deadline to file complaints under federal law with the Equal Employment Opportunity Commission (EEOC).  This extension of time will allow more employees – and particularly employees of small businesses who may not have claims under federal laws – to file complaints, seek counsel, and initiate a CCRD investigation.

Expanded Remedies for Age Discrimination

Both state and federal laws have historically and ironically discriminated against plaintiffs bringing age discrimination claims by limiting the remedies under age claims.  Up until now, plaintiffs asserting age discrimination claims were barred from seeking punitive or compensatory damages under either CADA or the Age Discrimination in Employment Act (ADEA).

HB 1367 finally brings age claims in line with all other protected classes and will allow age discrimination plaintiffs to seek punitive and compensatory damages once signed, meaning that age discrimination plaintiffs will finally be able to receive compensation for emotional distress, medical treatment, inconvenience, and impairment of the quality of life.  These damages are often a substantial part of the damage sustained by plaintiffs in discrimination and retaliation cases and represent a significant increase in potential liability for employers.

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If you have questions or need help navigating this area of employment law, please reach out to Tava Employment Law here.  I welcome your suggestions for future topics as well.

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*As always, subject to the usual disclaimers: 

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information.  This website may contain links to other third-party websites; such links are only for the convenience of the reader, user or browser.  Tava Employment Law does not recommend or endorse the contents of the third-party sites.

Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.  No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction.  Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.  Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and website authors, contributors, contributing law firms, or committee members and their respective employers. 

All liability with respect to actions taken or not taken based on the contents of this site are hereby expressly disclaimed.  The content on this posting is provided “as is”and no representations are made that the content is error-free.

On March 1, 2022, Colorado amended its non-compete statute to impose criminal liability on employers who knowingly enforce void non-compete agreements against their employees. Colorado Senate Bill 21-271 raises the stakes for employers who seek to use non-competition agreements to restrict former employees from engaging in competing conduct; such violations may now be prosecuted as Class 2 misdemeanors, which are punishable by up to 120 days in jail, a fine of up to $750, or both. 

This amendment to C.R.S. § 8-2-113 underscores Colorado’s continuing skepticism of non-competition agreements. As before, Colorado’s non-compete statute explicitly renders non-competition agreements void except where the following narrow exceptions apply:  

• A contract for the purchase and sale of a business or assets of a business; 

• A contract for the protection of trade secrets; 

• A contract for the recovery of the expense of educating and training an employee who has worked from an employer for less than two years; or 

• The employee is an executive, officer, management personnel, or professional staff.  

If one of these exceptions is met, the non-compete clause must also be reasonable in temporal and geographic scope to be enforceable.  

Confidentiality and non-disclosure agreements are generally not limited in the same way as non-competition agreements but can be treated as non-competition agreements if they seek to restrict a former employee’s ability to seek work after the separation.

In short, non-compete clauses are highly disfavored in Colorado and must be narrowly tailored to one of the statutory exceptions to be valid. If you are concerned about protecting your company’s intellectual property or have signed an employment agreement containing a non-competition clause, please reach out to us at 719-212-2890 or schedule an appointment here  to discuss potential next steps.  We look forward to working with you. 

The Colorado Department of Labor and Employment has issued Interpretive Notice & Formal Opinion #14 outlining that Colorado employers who offer paid vacation must pay their employees earned vacation upon separation, regardless of the reason for separation.  This INFO #14 follows the Colorado Supreme Court’s 2021 decision in Nieto v. Clark’s Market, which confirmed that earned vacation pay cannot be forfeited at the end of employment under the Colorado Wage Act even by agreement.  

Under the Colorado Wage Act, “vacation pay” is considered a form of wages. As wages cannot be forfeited or waived, vacation pay likewise cannot be forfeited or waived.  INFO #14 makes clear that paid leave that can be used for any purpose will be considered “vacation pay”  regardless of what the pay is called; “personal days,” “paid time off,” or “annual leave” can all be considered “vacation pay” and therefore wages under the Colorado Wage Act.  (Leave taken for a specific purpose, however, such as parental leave or bereavement leave, are not considered vacation pay.)  As wages, employees are also entitled to have their accrued vacation days paid out the day after separation with their final paycheck.  

INFO #14 highlights the importance for employers to clearly define their paid leave policies. Employers are, for example, entitled to define the rate at which an employee may accrue paid leave, how much paid leave may be accrued in a time period, and how much paid leave may be used within a specific time period. An employer, however, cannot limit how much already-accrued vacation pay carries over to the next year (that is, apply a use-it-or-lose-it paid leave policy).  Employers who use PTO in lieu of paid sick leave under the Healthy Families and Workplaces Act (HFWA) should likewise be careful not to apply PTO limits that would run afoul of HFWA’s the minimum sick leave requirements.  

If you need assistance reviewing your existing vacation or PTO policy, please reach out to us at 719-212-2890 or schedule an appointment here. We look forward to discussing your options with you. 

On January 1, 2022, all employers in Colorado will be required to provide paid sick leave to employees under the Colorado Health Families and Workplaces Act (HFWA). Employers with more than 16 employees have been required to comply since January of this year. The CDLE’s guidance on HFWA paid sick leave can be found here under INFO #6A and #6B.  

Although HFWA’s requirements are relatively straightforward, employers should take care to compare their current leave policies with HFWA’s to determine whether their existing leave policies can be considered equivalent to or “more generous” than what HFWA requires. For example, one provision that is often overlooked is that HFWA requires all employees to begin accruing on the first day of work, while many existing policies do not allow new employees to accrue leave until several months have passed. A leave policy that does not allow accrual until several months after hire would therefore fall below the minimum benefits guaranteed by HFWA and would not be compliant.

Remember also that Colorado remains in a public health emergency and that HFWA’s provisions regarding COVID-19 related leave remains in place. These obligations are in addition to paid sick leave and will continue until the state of emergency is lifted.

Please reach out to us at 719-212-2890 or schedule an appointment here if you would like us to help you review your existing leave policies or employee handbook. We look forward to discussing your options with you.