New bill seeks again to change definition of harassment

Once again, the Colorado Legislature will consider changing the definition of harassment — and whether that will lead to increased lawsuits — following introduction this week of an updated version of a bill that died in the waning days of the 2021 session.

The new POWR (Protecting Opportunities and Workers’ Rights) Act also adds more protections for people with disabilities, limits use of nondisclosure agreements in discrimination cases and sets up a narrow affirmative defense for employers accused of infractions. It does not seek to revive several of the provisions from the 2021 bill, including an expansion of the time to file discrimination charges or a ban on certain pre-employment medical examinations.

After the final-week defeat of the bill in a House committee in 2021 when several Democrats questioned the effects of eliminating the long-running “severe or pervasive” standard in defining harassment, POWR Act supporters negotiated with business leaders to try to find consensus on a law that might reduce harassment and discrimination. In early March of last year, however, supporters realized that the gulf between the sides remained too wide and instead passed a narrow bill that expanded the definition of employee to include domestic workers and repealed damage limits on age-discrimination claims.

Business and local-government groups continue to negotiate with proponents, led by the Colorado Women’s Bar Association, over the newly introduced Senate Bill 172, sponsored by Democratic Sens. Faith Winter of Westminster and Julie Gonzales of Denver, and it has yet to be scheduled for its first committee hearing. But as of now, there is significant disagreement over the effect it will have on employees, employers and workplaces.

“Severe or Pervasive”

The centerpiece change again is a proposal to eliminate the standard that an action or actions must be severe or pervasive to constitute harassment — a standard established through legal precedent in the late 1980s. Instead, it would define harassment as conduct that would be “offensive to a reasonable person in the same actual or perceived protected class” and that is “determined by a review of the totality of the circumstance of the conduct,” which could be a single act or a series of acts.

Iris Halpern, a partner at Rathod Mohamedbhai LLC and member of the women’s bar association, called the current definition an antiquated one that allows for too many instances of actual harassment to go unpunished. California, New York, Maryland and the District of Columbia all have eliminated the “severe or pervasive” standard, and Colorado needs one that “matches the times,” she said.

But replacing long-standing case law that is used throughout most of the United States with a new standard could create “chaos” as judges attempt to interpret it and could do so in different ways, said Ann Terry, executive director of the Special District Association of Colorado. That could lead to more lawsuits by attorneys willing to test its limits and, because of that, a boost in insurance costs for all employers if the likelihood of facing legal action increases, said Larry Hudson, a lobbyist for the Colorado Chamber of Commerce.

“What this bill does is confuse 30 years of court definitions around the ‘severe or pervasive’ standard,” Terry said. “We don’t have to have that standard in statute, but we don’t want that standard done away with.”

Halpern acknowledged that modernizing the definition would allow some people better chances to succeed in court, which is a point of the proposal. But she argued that there has not been a deluge of new cases in the three states that have eliminated the decades-old standard, and she noted that SB 172 doesn’t seek to eliminate the cap on damages, as some other states have done.

“I think the impact of this is we will ultimately be allowing potential claims that are viable and that our society would find reprehensible to have their day in court,” Halpern said.

Nondisclosure Agreements

Similarly, proponents believe that there need to be limits on nondisclosure agreements beyond the idea that liquidated damages coming from a violation of agreements must be in proportion to the violation — another standard that comes from legal precedent rather than statute.

SB 172 would void any NDA if the nondisclosure provision does not apply equally to all parties and if that provision bars the victims in the settlement from talking to certain people. Those parties allowed to hear the underlying facts of the case would include family members, religious advisers, medical or mental-health providers, legal counsels, financial advisers, tax preparers and government agencies.

“For someone who has been sexually harassed to not be able to tell their therapist is a problem,” said Meagan Moodie, co-chair of the CWBA’s public-policy committee, noting that some NDAs now bar sharing those underlying facts even with spouses. “And in what way does that protect an employer at all?”

Terry, however, argued that NDAs in some cases help an employee more than they help an employer in limiting the ability to discuss the situation. She disputed that all such agreements give too much power to an employer — a common claim of opponents.

Other Changes

The proposal also removes from Colorado law the ability for employers to deny someone with a disability a job if “the disability has a significant impact on the job” — a change that Halpern said would bring Colorado into harmony with federal law and would require more employers to make reasonable accommodations for the disabled. It keeps in law the ability for employers to deny employment “if there is no reasonable accommodation that the employer can make with regard to the disability and the disability actually disqualifies the individual from the job.”

Hudson said employers should be concerned too about the restrictions that SB 172 places around an employer’s ability to assert an affirmative defense against a claim of unlawful harassment by a supervisor.

To put forward such a defense under the proposal, an employer must have established a program that is reasonably designed to prevent harassment and shown that the employee has unreasonably failed to take advantage of the program after being told about it. An employer also must retain a record of all complaints of discrimination or harassment for the duration of their operations and for one year after ceasing operations, and the employer must not have received any complaints asserting discrimination or harassment for the past five years.

Hudson said he remains hopeful that negotiations can lead to some agreement, and Terry said there are areas of change to which opponents can agree, such as the specification that harassment can come from a single incident. But she believes that the uncertainty that will come with the changing of a long-held standard could lead to a surge in time-consuming and costly legal action that could burden public and private-sector employers.

“I think it’s going to allow for and cause more litigation that’s confusing and difficult and painful for both parties,” Terry said. “There are good employers and employees and horrific employers and employees. But you can’t just undo everything that’s been done for 30 years and then not expect frivolous lawsuits. I think there’s a better approach to this bill.”

Moodie, however, said that courts can’t continue relying on a 35-year-old standard that reflects views of employer-employee and male-female relations from a very different era. The proposed law, she and Halpern argued, is focused and will lead to litigation where it’s needed without a flood of lawsuits that aren’t.

“We’re not out to hurt business owners. We are business owners,” said Moodie, owner of the 20-employee GEM Family Law of Denver. “We’re just trying to make it actually possible to address severe cases.”

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