What Colorado Employers Need to Know About the POWR Act

What Colorado Employers Need to Know About the POWR Act

By Kaitlyn Dehmer

On June 7, 2023, Gov. Jared Polis signed the Protecting Opportunities and Workers’ Rights Act (the “POWR Act”) into law. The POWR Act takes effect August 7, 2023, and includes changes employers must prepare for. 

Here’s what every Colorado employer needs to know about the POWR Act:

Marital Status

The POWR Act includes marital status as a protected class under the Colorado Anti-Discrimination Act (“CADA”). Under the POWR Act, employers cannot refuse to hire, discharge, promote or demote, harass, or discriminate against any individual otherwise qualified because of marital status.

Accommodations

The POWR Act permits an employer to refuse to hire, discharge, or promote or demote an individual with a disability if (1) there is no reasonable accommodation that would allow the employee to meet the essential functions of the job and (2) the disability actually disqualifies the employee from the job position.

Definition of Harassment

The POWR Act amended the definition of harassment to remove the requirement that harassment be “severe or pervasive.” Harassment is now defined as conduct or communication that is subjectively offensive to the person alleging harassment and objectively offensive to a reasonable person who is a member of the same protected class.

Rather than being severe or pervasive, to constitute harassment, conduct or communication must fall under one of the following: (1) submission to the conduct or communication is explicitly or implicitly made a term or condition of the individual’s employment; (2) submission to, objection to, or rejection of the conduct or communication is used as a basis for employment decisions affecting the individual; or (3) the conduct or communication has the purpose or effect of unreasonably interfering with the individual’s work performance or creating an intimidating, hostile, or offense working environment.

The POWR Act clarifies that “petty slights, minor annoyances, and lack of good manners” alone do not constitute harassment.

Affirmative Defense for Employers

The POWR Act creates an affirmative defense for employers to an employee’s claim for harassment, but the employer must meet specific requirements. The employer must prove that: (1) it has established a harassment prevention program; (2) it has communicated the details of the program to its employees; and (3) the employee in question has failed to take advantage of the program.

Nondisclosure Agreements

The POWR Act sets forth requirements for nondisclosure agreements entered into or renewed on or after August 7, 2023. An agreement that limits the ability of an employee to disclose or discuss any alleged discriminatory or unfair employment practices is void unless all of the following are met:

1.   The nondisclosure provision applies equally to the parties.

2.   The nondisclosure provision expressly states it does not restrain the employee from discussing or disclosing the underlying facts of any alleged discrimination to certain individuals and in certain circumstances.

3.   The nondisclosure provision expressly states that disclosure of underlying facts of any alleged discrimination does not constitute disparagement.

4.   If the agreement includes a non-disparagement provision, the agreement must state that if the employer violates the non-disparagement provision, the employer may not seek to enforce the provision or seek damages for an employee’s violation of the provision.

5.   If the agreement includes a liquidated damages provision, the provision must be reasonable and proportionate to the economic loss that a breach would cause, must vary based on the nature or severity of the breach, and must not be punitive.

6.   The agreement includes an addendum attesting to compliance with each requirement.

If an employer includes a nondisclosure provision that violates the POWR Act, the employer will be liable for actual damages and a penalty of $5,000 per violation. An employer may be protected if it can show it believed it was acting in compliance with the POWR Act.

Record Keeping

Employers must keep records of discriminatory or unfair employment practices for at least five years.

Next Steps

Colorado employers should immediately analyze their employment policies, template employment agreements, and other employment-related documents to ensure compliance with the POWR Act.

If you have questions about ensuring compliance with the POWR Act, please contact a Fortis employment law team member.

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