July Legal Updates

CO Meeting Attendance Bill Nixed

CO Gov. Jared Polis vetoed the House bill that would have prohibited employers from requiring employees to attend meetings at which political or religious issues were discussed. He said the "bill's definitions of 'political matters' and 'religious matters' are so broad that they are unworkable and would result in unintended consequences for employers and employees alike".

Fewer Workers Paid At Mendoza Line

The U.S. DOL’s Bureau of Labor Statistics said in an annual report in late May that just 1.1% of hourly workers made the federal minimum wage or lower in 2023, down from 1.3% the year prior and 1.4% the year before that. The floor has been at $7.25 an hour since 2009. This is likely a product of states raising their own minimum wages above the federal minimum.

MN Expands Drug Testing Methods

Effective August 1, 2024, the MN Drug and Alcohol Testing in the Workplace Act (“DATWA”) will allow an “oral fluid test” (defined as an analysis of saliva at threshold detection levels contained in the standards of one of the programs listed in DATWA - drugs and cannabis: the National Institute on Drug Abuse, the College of American Pathologists, and the New York Department of Health; or for alcohol: the College of American Pathologists and the New York Department of Health).

Time to update drug testing policies!

EEOC To Focus On Hiring Bias

EEOC general counsel Karla Gilbride said Tuesday her office is focused on holding employers accountable for hiring discrimination, noting the agency has access to company data that allows it to build a case that an individual job seeker cannot.

LGBTQ+ Regs Challenged

Just days after the U.S. Supreme Court overturned Chevron deference, federal judges in TX, MS and FL blocked enforcement of the Affordable Care Act's anti-discrimination protections relating to gender identity, with implications for the provision of gender-affirming care.

For over 40 years, the Chevron doctrine required federal judges presiding over legal challenges over federal agency decision making to defer to agencies' reasonable interpretations of ambiguous statutes.

In its absence, federal judges are empowered to make their own determinations when it comes to controversial healthcare regulations.

CO Established Discharge Test

In a case of first impression in CO, the CO Court of Appeals on May 23^rd adopted a test for evaluating a claim of actual discharge under state law.

In Potts v. Gaia Children LLC, the plaintiff's ex-employee, Debbi Potts, sued her former employer, claiming she was wrongfully discharged against the public policy of Colorado.

Potts was an employee of a childcare facility and was a mandatory reporter. As such, she reported perceived shortcomings of the facility, and the state of Colorado investigated.

During an on-site investigation by the state, the employer asked Potts to go home early, and then texted her to take time off and enjoy the long holiday weekend. Perceiving this to be a sarcastic text message, Potts assumed she had been terminated, and went to work the next week to collect her check and return the company's property. The employer took Potts' actions to mean that she quit.

The court of appeals found an exception to an employer's ability to terminate for any reason at all under an at-will employment. That is, an employer cannot terminate an at-will employee in violation of public policy.  Under CO law, a plaintiff may recover for wrongful discharge in violation of public policy by proving that the employer did any number of things, such as requiring the performance of an illegal act, or prohibiting the employee from exercising a public right or duty.

As the court stated, the "[i]nquiry focuses on the reasonable perceptions of the employee, not on whether formal words of firing were in fact spoken." The Court then found that "The test is therefore objective rather than subjective and requires consideration of whether the circumstances would lead a reasonable employee to understand that she has been discharged from employment."

CA PAGA Update

CA’s Private Attorneys General Act (PAGA), which authorizes employees to file lawsuits to recover civil penalties for Labor Code violations, has been significantly updated. Highlights:

• The plaintiff may only pursue PAGA penalties for the plaintiff and others who experienced the same alleged violation within a one-year statute of limitations period.  But, PAGA plaintiffs represented by most non-profit legal aid organizations and similar legal services organizations can still pursue penalties based on alleged violations they did not experience themselves, although the one-year limitation still applies.    
• Courts may now determine manageability and limit both the scope of claims and evidence presented at trial.
• Employers that can demonstrate that it took all reasonable steps to be in compliance before receiving the plaintiff’s request for employment records or a PAGA notice, can limit their exposure to 5% of the civil penalty unless this lesser penalty would be unjust or arbitrary.
• There are also incentives for an employer that can demonstrate that it took all reasonable steps to be in compliance with the alleged violations within 60 days after receiving notice, the employer did not receive findings or a determination within the prior five years that its policy or practice giving rise to the alleged violation was unlawful, and the conduct giving rise to the violation was not malicious, fraudulent, or oppressive, i.e., the maximum civil penalty is capped at 30%, unless this lesser penalty would be unjust or arbitrary.
• The civil penalty for certain wage statement violations is limited to $25 per violation.  The civil penalty for certain other violations that occurred for the lesser of 30 consecutive days or four consecutive weekly pay periods is $50 per violation.
• Employers whose regular pay period is on a weekly basis will have their potential civil penalty cut in half.
• There is no “stacking” of certain purely derivative violations (e.g., meal-break violation and an overtime violation in the same pay period).
• Employers have an expanded ability to “cure” alleged violations and prevent a civil penalty, although the process requires that the employee make all affected employees “whole,” including not only unpaid wages identified in the PAGA notice for the three years prior to the notice, payment of 7% interest and liquidated damages, and a “reasonable” lodestar attorney’s fees and costs to be determined by the LWDA or the court.  There is a somewhat more collaborative procedure for employers with fewer than 100 employees in the year prior to the PAGA notice.  In some cases, the employer must also give written notice of the cure to each aggrieved employee.
• Although the procedures are complex, employers have the right to an automatic stay and early neutral evaluation of the claims.