DGS Legal Alert: Protecting Opportunities and Workers’ Rights Act Colorado Senate Bill 12-172

On June 6, 2023, Governor Jared Polis signed SB12-172 into law. The Protecting Opportunities and Workers’ Rights Act (the “POWR Act” or “Act”) redefines “harassment” in Colorado’s anti-discrimination laws. It makes changes to anti-discrimination laws regarding protected class, people with disabilities, record preservation, and affirmative defenses. Finally, it amends what is considered a valid non-disclosure agreement (“NDA”).

Harassment:

The Act defines harassment as unwelcome conduct or communication directed at an individual or group of individuals’ membership in a protected class. Unless otherwise meeting the standards of the Act and the totality of circumstances, petty slights, minor annoyances, or lack of good manners do not constitute harassment.

Harassment does not need to be severe and pervasive, as was the previous standard. Communication or conduct is harassment where it is:

1. Subjectively offensive to the individual alleging harassment and objectively offensive to a reasonable individual of the same protected class; or
2. Submission to the conduct is a condition of the individual’s employment; or
3. An employer makes employment decisions based on the individual’s submission or objection to the harassing conduct.

The Act also requires the Colorado Civil Rights Division (CCRD) to include harassment as a type of discrimination or unfair practice on its complaint intake forms.

Lastly, the Act establishes an affirmative defense for employers when:

1. The employer has created and maintained a program reasonably designed to prevent harassment;
2. The employer has communicated the existence of that program to supervisory and nonsupervisory employees; and
3. The employee has unreasonably failed to take advantage of the harassment prevention program.

Other changes to anti-discrimination law:

The Act makes a number of additional changes to anti-discrimination laws.

The Act adds protection for individuals based on their marital status. This change is in addition to established protections for individuals based on race, creed, color, sex, sexual orientation, gender identity, gender expression, religion, age, national origin, or ancestry.

An employer may not make hiring or discharge decisions or promotion or demotion decisions based on an individual’s disability unless there is no reasonable accommodation the employer can provide that would allow the individual to satisfy the essential functions of the job, and the disability actually disqualifies the individual.

Employers must retain records of complaints of discriminatory or unfair employment practices filed for at least five years after either 1) the date the employer received the record or 2) the date of the final disposition of any personnel action related to the complaint, whichever comes later. Sufficient records contain:

• The date of the complaint;
• The identity of the complaining party (unless anonymous);
• The identity of the alleged perpetrator; and
• The substance of the complaint.
  

These records are not considered public records and, thus, not subject to public inspection.

Non-disclosure agreements:

The Act prohibits non-disclosure or confidentiality agreements (“NDAs”) between an employer and employee that would prevent the employee from discussing alleged discrimination or unfair employment practices unless the following requirements are met:

1. The NDA applies equally to all parties;
2. The NDA expressly states that it does not limit the employee or prospective employee from disclosing the facts of the alleged discrimination;
3. If there is a non-disparagement provision, there is a condition preventing the employer from enforcing the NDA if the employer disparages the employee or prospective employee; and
4. Any damages are not a penalty or punishment and are reasonable and proportionate.

An employer is liable for actual damages and subject to a fine of up to five thousand dollars per violation where the employer violates any of the new NDA requirements. The Act also allows the CCRD, or an employee presented with an NDA violating the Act, to bring immediate action. A court may reduce relief available if the employer can demonstrate that the act leading to the action was in good faith and based on a reasonable belief that the employer’s actions complied with the Act.

There are several key takeaways from the Act:

• Employers may need to train their employees in both supervisory and nonsupervisory roles on how to avoid harassment in the workplace.
• Employers may need to update their existing anti-harassment education or create a new program to comply with the Act.
• Employers may not make hiring decisions based on an individual’s disability unless the disability prevents the individual from satisfying the essential functions of the job and actually disqualifies them from the provision. This language is a change from the previous standard.
• Employers may need to train employees to refrain from making hiring or promotion, and demotion decisions based on marital status.
• Employers must preserve records of complaints of harassment for five years.
• Employers must ensure that an NDA with an individual who has filed a complaint alleging a discriminatory or unfair employment practice captures the requirements above.

The Protecting Opportunities and Workers’ Rights Act applies to employment practices occurring on or after the effective date of the law, which is 90 days after the adjournment of the Colorado General Assembly. The Act goes into effect on August 7, 2023.