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Colorado Gov. John Hickenlooper on Monday signed into law legislation that would permit workers to collect awards against small business owners in discrimination litigation, despite business' opposition.
H.B. 13-1136, the Job Protection and Civil Rights Enforcement Act of 2013, permits plaintiffs who prevail in discrimination or unfair employment practices litigation to collect compensatory or punitive damages awards of up to $10,000 for employers with one to four employees, and up to $25,000 for employers with 5-14 employees.
The legislation states that under federal law, only workers at firms with 15 or more employees can collect damages in such cases.
“Small business cannot thrive with red tape, needless bureaucracy and frivolous or harassing litigation,” said the Democratic governor in a statement. “These are among the concerns the business community has raised” with the legislation.
However, he added, “While our administration is very sympathetic to these concerns, we also believe that H.B. 13-1136 has been crafted with safeguards against frivolous lawsuits and excessive damages claims. Moreover, while H.B. 13-1136 rightly embraces employment discrimination remedies for companies with fewer than 15 employees that are recognized in most other states,” said the governor in his statement.
Gov. Hickenlooper said the bill has been criticized because it does not have an explicit cap on attorneys' fees but only Virginia appears to have such a cap.
The bill will become effective January 2015.
The governor said safeguards in the legislation for small business are:
• workers must establish intentional discrimination by the employer;
• the worker must first exhaust all administrative remedies before going to court;
• there is a mandatory process of mediation before going to court;
• only courts and not administrative law judges can award damages;
• courts may award cost and attorney fees to employers for frivolous claims;
• and courts must consider the employer’s size and assets before awarding damages.