Law puts bigger burden on small business.
State Sen. Laura Woods is going “all out” to repeal a new law that allows Colorado workers at small businesses to get compensatory and punitive damages in discrimination cases.
The Job Protection and Civil Rights Enforcement Act, which has been nicknamed Sue Your Boss, went into effect at the beginning of 2015. Previously, companies of fewer than 15 people didn’t have to pay compensatory damages, punitive damages, emotional distress damages or attorney’s fees in discrimination verdicts against them.
“One claim of racial discrimination against a small business—even with an in-house lawyer—just to investigate the claim would cost up to $8,000,” says Woods, who is introducing a bill to repeal the law. “Most small businesses in Colorado don’t have $8,000 lying around, and they would be out of business before they even get to trial.”
NFIB/Colorado State Director Tony Gagliardi, who has led the opposition to the new law, told the Denver Business Journal it could cost a small businesses up to $150,000 to defend against even meritless lawsuits.
That’s why employers often choose to settle rather than go to court, Woods says. However, the problem with settling is that the employer admits to guilt.
Critics of the new law also argue that its remedies seem out of proportion to the problem: The Colorado Civil Rights Division reported in 2011 that of 339 claims of employment discrimination filed, only 26 cases were found to have merit.
Adds Woods, “Not only is there not a high incidence of discrimination in these size companies, but there is a proper venue for it. It seems like the trial lawyers have got ahold of it and moved it over to district courts to benefit the trial lawyers and hurt small businesses.”
