Last month, a group of House and Senate Democrats introduced HB-1136, the “Job Protection and Civil Rights Enforcement Act” (Bill).  This Bill seeks to align remedies under the Colorado Anti-discrimination Act (CADA) with those available under the federal Civil Rights Act of 1991 (CRA 1991) for actions under Title VII of the Civil Rights Act of 1964 (Title VII), and the Americans with Disabilities Act (ADA).  Although I believe in the value of inclusiveness with religious fervor, I testified against this Bill before the House Judiciary Committee on February 14, 2013.  As a former EEOC Trial Attorney, social worker, Biglaw defense attorney, and Democrat, I hoped to add balance to a dialog steeped in partisanship and ideology-coated greed.  One Representative’s final question, paraphrased, “Whose side are you really on?” quickly dashed that hope. 

HB-1136 promises far more problems than progress toward eliminating discrimination and advancing inclusiveness, particularly for Colorado’s small employers.  It rests on a foundation of flawed logic and burdens Colorado’s employers and CADA’s already over-stretched civil enforcement scheme—the Colorado Civil Rights Division (CCRD) and our courts—in ways that HB-1136’s sponsors have obviously not fully contemplated. 

The Boogeyman behind HB-1136

At the February 14, 2013 hearing, I sat stunned as HB-1136’s House sponsors claimed that without the enhanced penalties of compensatory (i.e., squishy, unquantifiable damages for emotional pain) and punitive damages, small Colorado employers with less than 15 employees will harass, discriminate and retaliate against workers with reckless glee.  This jaundiced view of Colorado’s employers, however, differs mightily from my experience with them over the past 15+ years.  Even as a rabid young EEOC prosecutor, I realized that all discrimination law is ultimately about PEOPLE, delightfully imperfect as we are.  Instead of evil-doing employers intent on discriminating against and harassing employees, I mostly saw people struggling to comply with conflicting workplace laws while managing business operations.  I began to liken discrimination law to a “commercial divorce”—all the complexity of a big federal case with all the emotion of a hotly contested divorce—instead of a “holy war” where right and wrong is clear and God takes sides.  In fact, mostly, I encountered employers facing discrimination, harassment, and retaliation charges for firing employees for . . .

• Showing up late for every shift, delaying other employees’ shifts and causing the employer to pay overtime;
• Resisting employers’ efforts to rehabilitate poor job performance;
• Harassing and threatening supervisors and other employees;
• Alienating customers with outrageously bad customer service;
• Smoking crack in the bathroom; and, my favorite,
• Storing goose droppings in the refrigerator of a residential facility, just to name a few.

Indeed, according to the EEOC, it issued Determinations of Reasonable Cause finding discriminatory treatment in only 3.8% of its administrative closures last year; likewise, CCRD’s reasonable cause determination rate also falls below 5%.  While not all 95% of charges are legally frivolous, the CCRD and EEOC ultimately find most of them non-meritorious, which also comports with my observation and experience.  What HB-1136’s sponsors do not seem to grasp, however, is that even for non-meritorious discrimination charges and lawsuits, Colorado’s employers must still expend substantial time and money defending themselves, both at the CCRD and in court.

As in discrimination litigation, HB-1136 casts Colorado’s HR practitioners and small employers as villains, naturally inclining toward harassment and discrimination without the threat of looming future penalties.  And yet, most, if not the overwhelming majority, of them want to do the right thing by their employees.   Most HR practitioners entered this complex field because they actually like other people; I’ve seen many of them act as “corporate social workers,” going out of their way to help employee struggling at work and at home.  Most small employers consider their employees “family,” a notion that often backfires.  And most non-profit leaders croak in heartbreak at the accusation that they would do anything as misanthropic as harassment or discrimination.  The boogeyman behind HB-1136 (i.e., HR practitioners and Colorado small employers who want to harass, discriminate, and retaliate with reckless abandon) is probably not under the bed after all.    At the very least, we should demand that the proponents of HB-1136 establish just how the availability of compensatory and punitive damages in some hypothetical CADA lawsuit has any meaningful impact on the real personnel decisions employers make each day in the business trenches.  After all, if damages deterred discrimination, the campaign for inclusiveness would surely have advanced further than it has. 

Promises without Progress

HB-1136 seeks to provide the same remedies under the CADA that became available to employees under CRA 1991—jury trials, compensatory (i.e., unquantifiable emotional pain) and punitive damages, and attorneys’ fees.  During passage of the CRA 1991, the trial lawyers associations also insisted that without the ability to recover compensatory and punitive damages at a jury trial, harassment and discrimination would forever pollute the American workplace.  Ratchet up the penalties, they promised, and progress will follow. 

Over the past 22 years, however, very little has actually changed except money changing hands.  Women, for example, make up only 8% of top wage earners at Fortune 500 companies.  In retail, women make up nearly 50% of the labor force, but only 17.9% of executive managers.  Likewise, in law, women comprise less than 18% of law firm equity partners where they earn approximately 86% of their male peers’ salaries.  In the science/engineering sector, women constitute slightly over 40% of workers, but only 11% of leaders.  In finance and insurance, women make up a majority (57%) of the workforce, but only 18.6% of executive leadership.  The United States lags substantially behind Australia, Canada, Israel and South Africa for women’s corporate executive officer membership.   

People of color have fared worse. In 2010, African-American men made up only 5.7% of executive boards on Fortune 100 companies, whereas Latinos were just 2.3%.  Latinos occupy only 7.5% of professional or management positions in the United States, with African-American men just slightly higher at 8.4%.  In America still today, white people still hold over 83.6% of all management positions.  Thus, even with the availability of stiff penalties for workplace discrimination under CRA 1991, our workplaces have hardly become more inviting for women and minorities vying for the highest paying and most desirable positions. (source: www.catalyst.org)

In fact, according to the EEOC, workers’ perceptions of suffering discrimination have gotten worse.  For two years in a row, the EEOC has reported nearly 100,000 in new charges, approximately 2,000 of which come from Colorado.  In fiscal year 2012, the EEOC saw marked increases in the number of new gender and race charges, and a sharp spike in the number of disability-based charges since 2007.  Notably, for the first time in the EEOC’s history, retaliation now outranks all other kinds of discrimination allegations (e.g., race, gender, age, and disability) as the most frequently filed charge; retaliation charges, however, rest only “good faith beliefs” instead of a workers’ protected characteristics.  And last year, the EEOC equated its historic monetary collections from employers ($365.4 million) as evidence that it was “enforcing the [anti-discrimination] laws more effectively.”  (source: www.eeoc.gov)

Of course, employers pay money to resolve EEOC matters not out of any admission or recognition of discrimination, but to contain the staggering cost of defense, even on non-meritorious allegations.  In most cases, employers pay to resolve charges and cases not because they pose real legal risk, but because the cost of defending against the risk exceeds the risk itself.   Particularly with the proliferation of Employment Practices Liability Insurance (EPLI) since CRA 1991, employers and their EPLI carriers now mostly resolve matters below the anticipated cost of defense, instead of fighting when they’re right.  Thus, the charging and litigation processes for discrimination matters now rarely involve any truth-seeking; it is simply too expensive.   On the contrary, these processes have become a wealth redistribution system where employers pay EPLI carriers to pay defense firms to pay trial lawyers to pay employees in settlement of discrimination claims.  And, nothing changes in the quest for greater workplace inclusiveness except money changing hands.    

This geologic pace of progress should cause alarm and prompt conscientious legislators consider how to promote opportunity for all Coloradans.  But instead of relying on more sticks in the form enhanced damages penalties, we should challenge ourselves and our legislators to develop more innovative solutions toward ensuring that our workplaces are as inclusive as our communities.  The BUSINESS case for workplace inclusiveness—i.e., fully inclusive decision-making enables businesses to make products MORE people buy and deliver services that meet MORE people’s needs—is incredibly compelling, and can change hearts and minds where increased regulation and litigation have failed.

Fiscal Impact: Overstretching Colorado’s Thin Administrative and Judicial Resources

At the February 14, 2013, HB-1136’s proponents brushed off the notion that this Bill could further stretch CCRD’s and Colorado district courts’ already thin resources.  Experience teaches, however, that in states providing remedies equal to or greater than those available under federal law, the federal system becomes increasingly irrelevant and the enforcement burden shifts to states.  In California, for example, most Plaintiff-side attorneys bypass the federal system entirely, filing charges with the bankrupted skeleton state agency and overwhelmed California courts. For the past four years, the EEOC’s Denver Field Office has taken in approximately 2,000 new charges each year.  Since Plaintiff’s attorneys think that the CADA, CCRD, and Colorado state courts can yield more favorable results for them, where do the proponents of HB-1136 think these 2,000 new charge filings each year will go? 

That question—i.e., the fiscal impact of newfound reliance on Colorado’s civil anti-discrimination enforcement scheme, CCRD and our courts—deserves more attention than HB-1136’s proponents have apparently given it.  In fact, following passage of the CRA 1991, the number of EEOC charges mushroomed, causing the EEOC to implement Priority Charging Handling Procedures in 1995, namely, an intake triaging scheme whereby most charges get processed, but certainly not “investigated.”  Instead of issuing a “reasonable cause” or “no reasonable cause” determination either way (which could fuel or finish a future lawsuit), the EEOC stopped issuing “no reasonable cause” determinations entirely.  As one Plaintiff’s attorney advised me (curiously while I was at the EEOC), the EEOC is just a “speedbump” on the road to seeking real damages in civil litigation.  Ultimately, CCRD must either seek additional allocations to manage the inevitable increase in its workload or implement processes that reduce it to an administrative “speedbump” en route to Colorado district court.  

Employer Education: Putting Money behind Lip Service

HB-1136 calls for CCRD to appoint a volunteer sub-commission to research and provide training for small employers, activities funded only through donations, grants and gifts, not real budgetary allocations.  This provision pays lip service to the value of affordable employer compliance education without providing the financial means to do so reliably.  Before Colorado’s small employers are saddled with the risks and costs of HB-1136, CCRD must have the resources to develop and implement a consistent compliance education program for them, instead of volunteers scrambling for donated resources.  If HB-1136’s sponsors truly care about employer compliance, then they must put some money, even a little, where their mouths are. 

Distorting CCRD’s Role

HB-1136 permits a CCRD investigator to adjudicate an attorneys’ fee award on any administrative determination of reasonable cause, thereby transforming an administrative agency into a quasi-judicial body.  Even the EEOC does not award attorneys’ fees following its administrative determinations, for good reason: attorneys’ fee requests routinely involve complex mini-hearings where the presiding judge evaluates the reasonableness of the attorneys’ rate, hours invested, overall recovery, complexity and novelty of the matter, etc.  Most CCRD investigators are not attorneys, however, nor do they have experience adjudicating the merits of an attorneys’ fee dispute.   Accordingly, HB-1136 could empower a CCRD investigator to impose $100,000 in attorneys’ fees against an employer on a $10,000 damages determination, without the procedural and evidentiary safeguards of a real judicial proceeding.   

Further, like the EEOC, CCRD’s original mandate was to help eliminate unlawful employment practices through informal means of conciliation and persuasion. See § 24-35-305, C.R.S. (2011) (CCRD’s purpose “to investigate and study the existence, character, causes, and extent of unfair or discriminatory practices as defined in parts 4 to 7 of this article and to formulate plans for the elimination thereof by educational or other means.”).  By increasing CCRD’s power to impose attorneys’ fees and punitive damages, HB-1136 distorts CCRD’s original purpose—namely, to formulate plans to help eliminate workplace discrimination—and simply establishes it as a link in the overall wealth redistributive chain.  Instead of adjudicating attorneys’ fee disputes among counsel, CCRD’s personnel could have greater positive impact by more actively reaching out to Colorado’s employer and HR communities, and becoming the trusted compliance resource they want and need.  Inclusiveness starts with employers, not lawyers. 

Forging a Full Federal Remedy for LGBT Coloradans

During the passage of the Civil Rights Act of 1964, Congress understood that in forging new frontiers in human rights, the availability of a federal remedy is fundamentally important.  By the time Congress had passed this landmark legislation in 1964, several states, including Colorado, had already proscribed discrimination on the basis of race and gender, among other protected traits.   Congress realized, however, that without the greater uniformity that federal enforcement can provide, our country’s new standards for equality of opportunity could fall prey to local prejudices or parochialism, particularly in rural communities throughout the South.

Although I wholeheartedly agree that LGBT Coloradans deserve and need greater legal protection from all forms of discrimination, the march toward full inclusiveness must begin with a strong federal remedy to set and enforce the standard for equality of opportunity.  Although HB-1136 seeks to put enforcement “teeth” in prohibiting discrimination against LGBT employees, this change would likely benefit plaintiffs in Colorado’s urban pockets, as a practical matter.  LGBT plaintiffs suffering overt discrimination in Colorado’s more rural, conservative communities, however, would not have equal access to CADA’s remedial scheme because of the same kind of local prejudices and parochialism that troubled the architects of the Civil Rights Act of 1964.   To protect LGBT Coloradans everywhere, especially those living in communities where discrimination is most likely to occur, we must push for change at the federal level first. 

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Inclusiveness matters.  But as we near the 50-year mark of the Title VII of the Civil Rights Act of 1964, we must urge legislators to consider new ways to maximize opportunity for all, instead of relying on tired, ineffective enforcement schemes that benefit lawyers, not employers.  I urge you, therefore, to contact your state representative or senator, or Governor Hickenlooper’s office to share your experience as an HR professional or small employer with non-meritorious workplace discrimination allegations arising out of legitimate, non-discriminatory personnel decisions.  I’ve provided contact information below. 

Colorado House of Representatives Roster: http://www.leg.state.co.us/CLICS/CLICS2013A/directory.nsf/MIWeb?OpenForm&chamber=House    

Colorado Senate Roster: http://www.leg.state.co.us/CLICS/CLICS2013A/csl.nsf/DirectorySen?openframeset      

Governor Hickenlooper Contact:  (303) 866-2471