April 17, 2014

e-Legislative Report: April 14, 2014

CBA Legislative Policy Committee

For readers who are new to CBA legislative activity, the Legislative Policy Committee (LPC) is the CBA’s legislative policy-making arm during the legislative session. The LPC meets weekly during the legislative session to determine CBA positions on requests from the various sections and committees of the Bar Association.

Friday, April 11
At the request of the Juvenile Law Section, the LPC voted to oppose HB 14-1362. Concerning great grandparent visitation with great-grandchildren. The bill is sponsored by Rep. Dominick Moreno.

At the Capitol—Week of April 7

A scorecard of the committee and floor work follows.

In the House

Monday, April 7

Passed on 3rd reading.

  • HB 14-1013. Concerning the creation of the advanced industries workforce development program, and, in connection therewith, making and reducing appropriations. Vote: 37 yes, 27 no, and 1 excused.
  • HB 14-1061. Concerning sentences imposing monetary payments in criminal actions, and, in connection therewith, eliminating prison sentences for persons who are unable to pay criminal monetary penalties. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1072. Concerning an income tax credit for child care expenses paid by a resident individual with a federal adjusted gross income of $25,000 or less, and, in connection therewith, making and reducing appropriations. Vote: 39 yes, 25 no, and 1 excused.
  • HB 14-1199. Concerning changes to the regulation of consumer goods service contracts, and, in connection therewith, making and reducing appropriations. Vote: 61 yes, 3 no, and 1 excused.
  • HB 14-1203. Concerning funding to maintain the infrastructure for the digital trunked radio system, and, in connection therewith, making an appropriation. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1173. Concerning continuation of the controlled substances abuse act, and, in connection therewith, the treatment of controlled substances abuse and making an appropriation. Vote: 61 yes, 3 no, and 1 excused.
  • HB 14-1283. Concerning modifications to the electronic prescription drug monitoring program, and, in connection therewith, making an appropriation. Vote: 42 yes, 22 no, and 1 excused.
  • HB 14-1009. Concerning changing the wildfire mitigation income tax deduction to the wildfire mitigation income tax credit, and in connection therewith, making and reducing appropriations. Vote: 52 yes, 12 no, and 1 excused.
  • HB 14-1029. Concerning a recodification of the laws governing reserved parking for persons with disabilities, and in connection therewith, making and reducing appropriations. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1278. Concerning continuation of the workers’ compensation accreditation program administered by the division of workers’ compensation, and, in connection therewith, implementing the recommendations of the 2013 sunset report by the department of regulatory agencies. Vote: 51 yes, 13 no, and 12 excused.
  • HB 14-1316. Concerning methods to determine whether disparities involving certain historically underutilized businesses exist within the state procurement process, and, in connection therewith, commissioning a study to make such determination, requiring the department of personnel to track contracts awarded to historically underutilized businesses, and making and reducing appropriations. Vote: 37 yes, 27 no, and 1 excused.
  • SB 14-27. Concerning criminal history background checks for professionals who have the authority to appear in court, and, in connection therewith, making an appropriation. Vote: 52 yes, 12 no, and 1 excused.
  • HB 14-1095. Concerning the Colorado bureau of investigation’s authority to investigate computer crime, and, in connection therewith, making an appropriation. Vote: 61 yes, 3 no, and 1 excused.
  • HB 14-1266. Concerning the penalties for certain value-based offenses, and, in connection therewith, reducing an appropriation. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1011. Concerning the funding of advanced industry economic development programs. Vote: 39 yes, 25 no, and 1 excused.
  • HB 14-1014. Concerning modifications to the job growth incentive tax credit, and, in connection therewith, reducing an appropriation. Vote 51 yes, 13 no, and 1 excused.

Tuesday, April 8

Passed 3rd Reading:

  • HB 14-1273. Concerning human trafficking, and, in connection therewith, making and reducing appropriations. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1321. Concerning the membership of the Colorado task force on drunk and impaired driving. Vote: 64 yes, 0 no, and 1 excused.

Wednesday, April 9

Passed on 3rd reading.

  • HB 14-1330. Concerning an update of telecommunications terminology for intrastate telecommunications services. Vote: 63 yes, 0 no, and 2 excused.
  • HB 14-1327. Concerning measures to expand the deployment of communication networks, and, in connection therewith, enacting the “Broadband Deployment Act.” Vote: 57 yes, 7 no, and 1 excused.
  • HB 14-1328. Concerning the deployment of broadband into unserved areas of Colorado through grant-making from moneys allocated from the Colorado high cost support mechanism, and, in connection therewith, making an appropriation. Vote: 47 yes, 17 no, and 1 excused.
  • HB 14-1127. Concerning disclosure of information for asset recovery, and, in connection therewith, making an appropriation. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1338. Concerning planning for the effective use of Colorado’s regional centers for persons with intellectual disabilities, and, in connection therewith, making an appropriation. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1211. Concerning ensuring access to quality complex rehabilitation technology in the medicaid program, and, in connection therewith, making and reducing appropriations. Vote: 49 yes, 15 no, and 1 excused.

Thursday, April 10

Passed 3rd Reading:

  • HB 14-1354. Concerning the ability of a county clerk and recorder to seek judicial review of final action by the secretary of state relating to elections. Vote: 50 yes and 15 no.
  • HB 14-1159. Concerning a state sales and use tax exemption for components used in biogas production systems. Vote: 54 yes and 11 no.

Friday, April 11

No bills were heard on 3rd Reading.

In the Senate

Monday, April 7

No bills were heard on 3rd Reading.

Tuesday, April 8

Passed on 3rd Reading:

  • HB 14-1057. Concerning the Colorado fraud investigators unit. Vote: 30 yes and 5 no.
  • HB 14-1176. Concerning the state audit cycle of the emissions program for motor vehicles. Vote: 20 yes and 15 no.

Wednesday, April 9

Passed on 3rd Reading:

  • HB 14-1299. Concerning the repeal of the six-year limitation on applying a salvage brand to a motor vehicle whose cost of being repaired exceeds the value of the vehicle without the recent damage. Vote: 22 yes, 12 no, and 1 excused.

Thursday, April 10

No bills were heard on 3rd Reading.

Friday, April 11

No bills were heard on 3rd Reading.

Colorado Court of Appeals: Attorney Who Started Own Practice Not Fulfilling Obligation of Seeking Employment for Unemployment Purposes

The Colorado Court of Appeals issued its opinion in Hoskins v. Industrial Claim Appeals Office on Thursday, April 10, 2014.

Unemployment Compensation Benefits—Actively Seeking Work.

Claimant was laid off from his job as an associate attorney in November 2012, at which point he decided to start his own practice. A deputy in the division of employment issued a decision finding that claimant was ineligible toreceive unemployment compensation benefitsfor the week ending December 1, 2012 and the entire period from December 15, 2012 through July 13, 2013, because he failed to supply the required listing of job contacts. A hearing officer affirmed the deputy’s decision, finding that claimant had focused his efforts on developing his own business and thus had not made a “reasonable and diligent effort to actively seek suitable work during the periods at issue.” The Industrial Claim Appeals Office (Panel) upheld the hearing officer’s judgment.

On appeal, claimant argued it was error to find that his efforts to establish his own legal practice did not fulfill the requirement that he actively seek work. Under CRS § 8-73-107(1)(c)(I), a claimant is eligible to receive unemployment compensation benefits for a particular week only if he or she is able to work and is available for all work deemed suitable. In addition, a claimant must be “actively seeking work.” The regulations clarify that a claimant must make “a systematic and sustained effort to find work.” A claimant must contact a certain number of employers each week and provide a written record of such contacts.

Those who are self-employed or sole proprietors are excluded from the definition of “employment” under the Colorado Employment Security Act (Act). The hearing officer found, and the Panel agreed, that claimant’s efforts to open his own law firm did not fulfill the statutory requirement to actively seek work. The Court of Appeals agreed that this comported with the plain language of the Act. The order was affirmed.

Summary and full case available here.

Bills Regarding Mineral Estates, Parent-Child Relationships, Property Valuation, and More Signed by Governor

On Tuesday, March 25, and Thursday, March 27, 2014, Governor Hickenlooper signed 31 more bills into law. Some of these are summarized here.

  • SB 14-009Concerning a Disclosure of Possible Separate Ownership of the Mineral Estate in the Sale of Real Property, by Sen. Mary Hodge and Rep. Dominick Moreno. The bill requires the disclosure of possible separate ownership of mineral estates in the sale of real property.
  • SB 14-062Concerning Reinstatement of the Parent-Child Legal Relationship, by Sens. Lucia Guzman & Ellen Roberts and Reps. Mike Foote & Bob Gardner. The bill allows parents whose parental rights have been terminated to have those rights reinstated in certain circumstances.
  • SB 14-080Concerning the Elimination of the List of Certain Additional Qualifications that Apply to Property Valuation Appeal Arbitrators, by Sen. Kevin Grantham and Rep. Rhonda Fields. The bill simplifies qualifications for arbitrators in property valuation appeals by mandating only that the arbitrator be experienced in property taxation and hold a Colorado real estate appraiser license.
  • SB 14-102Concerning the Addition of Employment Positions Held at Financial Institutions to the Circumstances Under Which an Employer May Use Consumer Credit Information for Employment Purposes, by Sen. Jessie Ulibarri and Reps. Bob Gardner and Paul Rosenthal. The bill allows bank to use consumer credit information during or before employment for employment purposes.
  • HB 14-1060Concerning the Authority of a Municipality to Compensate Members of a Municipal Planning Commission, by Rep. Diane Mitsch Bush and Sen. Gail Schwartz. The bill allows municipalities to compensate members of planning commissions.
  • HB 14-1079Concerning an Increase in the Monetary Amount Allowed for the Limited Offering Registration Procedure Under the “Colorado Securities Act,” by Rep. Pete Lee and Sen. Rachel Zenzinger. The bill increases the limited offering cap for small public offerings from $1 million to $5 million per year.
  • HB 14-1082Concerning a Requirement for Written Notice of Cancellation of Individual Life Insurance Policies, and, in Connection Therewith, Requiring Written Notice Prior to the Lapse of Individual Life Insurance Policies, by Rep. Pete Lee and Sen. Lois Tochtrop. The bill clarifies that life insurance policies can only be cancelled for reasons specified by statute, and written notice must be sent to the last known address of the insured prior to cancellation.
  • HB 14-1125Concerning the Circumstances Under which a Unit Owners’ Association May Disclose Contact Information for Members and Residents Under the “Colorado Common Interest Ownership Act,” by Rep. Diane Mitsch Bush and Sen. David Balmer. The bill allows owners’ associations to publish contact information for consenting members.
  • HB 14-1171Concerning Rules on Forensic Medical Evidence in Sexual Assault Cases, by Rep. Frank McNulty and Sen. Ellen Roberts. The bill eliminates the need for further rule-making regarding sexual assault examination consent forms.
  • HB 14-1183Concerning the Reinstatement of the Authority for Active Military Personnel to Practice Professionally, by Rep. Rhonda Fields and Sen. Matt Jones. The bill exempts active military personnel from automatic expiration of professional licenses.
  • HB 14-1223Concerning the Reclassification of Dolores County for the Purpose of Statutory Provisions Fixing the Salaries of County Officers, by Rep. Don Coram and Sen. Ellen Roberts. The bill reclassifies Dolores County as a Category V county.

To date, the governor has signed 113 bills into law. Click here for a list of the governor’s 2014 legislative decisions.

e-Legislative Report: March 24, 2014

CBA Legislative Policy Committee

For readers who are new to CBA legislative activity, the Legislative Policy Committee (LPC) is the CBA’s legislative policy-making arm during the legislative session. The LPC meets weekly during the legislative session to determine CBA positions on requests from the various sections and committees of the Bar Association.

The LPC met on Friday, March 21, but did not take any new positions on legislation.

At the Capitol—Week of March 17

A scorecard of the committee and floor work follows.

In the House

Monday, March 17

Passed 3rd Reading:

  • HB 14-1285. Concerning a requirement that a professional tax preparer provide certain disclosures to a client when preparing tax documents for the client. The CBA LPC took a neutral position on the bill but authorized the Taxation Section to seek an exemption for attorneys; the Taxation Section was successful in amending the bill. Vote: 36 yes and 29 no.
  • SB 14-102. Concerning the addition of employment positions held at financial institutions to the circumstances under which an employer may use consumer credit information for employment purposes. Vote: 60 yes and 5 no.
  • SB 14-137. Concerning certification of workers’ compensation insurance forms. Vote: 65 yes and 0 no.
  • SB 14-89. Concerning a prohibition for the state to enter into an agreement for a payment in lieu of taxes. Vote: 36 yes and 29 no.
  • HB 14-1299. Concerning the repeal of the six-year limitation on applying a salvage brand to a motor vehicle whose cost of being repaired exceeds the value of the vehicle without the recent damage. Vote: 43 yes and 22 no.

Tuesday, March 18

  • HB 14-1260. Concerning the creation of three mandatory minimum presumptive ranges for defendants convicted of a felony sex offense involving intrusion against a child who is under 12 years of age when the adult defendant is at least 10 years older that has one of the ranges starting at 10 years as the minimum in the range, and, in connection therewith, creating an indeterminate lifetime sentence with a mandatory minimum presumptive range of 10 to 16 years for a class 4 felony; a mandatory minimum presumptive range of 18 to 32 years for a class 3 felony; and a mandatory minimum presumptive range of 24 to 48 years for a class 2 felony. Vote: 65 yes and 0 no.

Wednesday, March 19

Passed on 3rd Reading:

  • SB 14-62. Concerning reinstatement of the parent-child legal relationship. Vote: 64 yes, 0 no, and 1 excused.
  • SB 14-106. Concerning the appropriation of federal mineral lease moneys from the local government permanent fund to the department of local affairs, and, in connection therewith, making an appropriation. Vote: Vote: 52 yes and 13 no.
  • SB 14-109. Concerning the use of the prevention, early detection, and treatment fund, and, in connection therewith, eliminating the annual transfer of two million dollars from the fund to the department of health care policy and financing for medicaid disease management and treatment programs that address cancer, heart disease, and lung disease or risk factors associated with those diseases and increasing the amount annually appropriated from the fund to the prevention services division of the department of public health and environment for the cancer, cardiovascular disease, and chronic pulmonary disease prevention, early detection, and treatment program by two million dollars. Vote: 65 yes and 0 no.
  • SB 14-132. Concerning the repeal of the requirement that a soldier be killed while deployed to a combat zone to issue a fallen soldier license plate. Vote: 65 yes and 0 no.

Friday, March 21

Passed on 3rd Reading:

  • HB 14-1282. Concerning the specification of what materials may be provided in a language other than English by an insurer to a customer. Vote: 62 yes, 0 no, and 3 excused.
  • HB 14-1057. Concerning the Colorado fraud investigators unit. Vote: 42 yes, 20 no, and 3 excused.
  • HB 14-1291. Concerning authorizing a charter school to employ a school security officer by contract to carry a concealed handgun if the person has a valid concealed carry permit. Vote: 59 yes, 3 no, and 3 excused.
  • SB 14-17.Concerning a limitation on the approval of real estate developments that use water rights decreed for agricultural purposes to irrigate lawn grass. Vote: 36 yes, 26 no, and 3 excused.
  • SB 14-18. Concerning the prohibition against furnishing nicotine products to persons under eighteen years of age. Vote: 43 yes, 19 no, and 3 excused.

In the Senate

Monday, March 17

  • Consent Calendar: Vote 33 yes and 0 no.
    1. HB 14-1107. Concerning the authority of the department of revenue to offer taxpayers the option to receive electronic notices.
    2. HB 14-1129. Concerning the submission by a state agency to a local government of information related to an application to the local government to approve a major utility facility.
    3. HB 14-1125. Concerning the circumstances under which a unit owners’ association may disclose contact information for members and residents under the “Colorado Common Interest Ownership Act.”
  • Passed on 3rd Reading
    1. HB 14-1163. Concerning a clarification of the cap imposed on the enterprise zone investment tax credit. Vote: 19 yes and 16 no.
    2. HB 14-1060. Concerning the authority of a municipality to compensate members of a municipal planning commission. Vote: 20 yes and 15 no.

Tuesday, March 18

  • Consent Calendar: Vote 31 yes, 0 no and 4 excused.
    1. HB 14-1082. Concerning a requirement for written notice of cancellation of individual life insurance policies, and in connection therewith, requiring written notice prior to the lapse of individual life insurance policies.
    2. HB 14-1265. Concerning the regulation of games of chance.
    3. HB 14-1171. Concerning rules on forensic medical evidence in sexual assault cases.
  • Passed on 3rd Reading
    1. HB 14-1108. Concerning limits on copayments made by a covered person for physical rehabilitation services. Vote: 19 yes, 12 no, and 4 excused.
    2. HB 14-1191. Concerning the creation of an emergency alert program to notify the public after a serious hit-and-run accident. Vote: 30 yes, 1 no, and 4 excused.

Wednesday, March 19

  • Consent Calendar:
    1. HB 14-1177. Concerning requirements governing meetings of the boards of county commissioners of the larger counties. Vote: 33 yes, 0 no, and 2 excused.
    2. SB 14-143. Concerning payment of amounts awarded through nursing facility provider reimbursement appeals from the medicaid nursing facility cash fund. Vote: 31 yes, 2 no, and 2 absent.
    3. SB 14-92. Concerning the creation of the crime of insurance fraud, and, in connection therewith, making an appropriation. Vote: 33 yes, 0 no, and 2 excused.
  • Passed on 3rd Reading
    1. HB 14-1030. Concerning the establishment of incentives for the development of hydroelectric energy systems. Vote: 19 yes, 0 no.
    2. HB 14-1222. Concerning modification of the terms under which a county may issue tax-exempt private activity bonds on behalf of an eligible applicant for the purpose of financing a geothermal energy project on the applicant’s property. Vote: 21 yes, 12 no, and 2 absent.
    3. HB 14-1117. Concerning the creation of the Colorado premature birth commission. Vote: 24 yes, 9 no, and 2 interim.

Thursday, March 20

Passed on 3rd Reading:

  • HB 14-1092. Concerning the voluntary contribution designation benefitting the Colorado Youth Conservation Corps fund that appears on the state individual income tax return forms. Vote: 20 yes, 9 no, 5 excused, and 1 absent.
  • SB 14-123. Concerning the authority of the peace officers standards and training board, and, in connection therewith, providing additional rule-making authority; raising the maximum fee for certification and skills exams; allowing awarding grants to nonprofit organizations; denying certification for municipal violations; and making an appropriation. Vote: 18 yes, 11 no, 5 excused, and 1 absent.

Friday, March 21

  • Consent Calendar: Vote: 33 yes, 0 no, and 2 excused.
    1. HB 14-1148. Concerning guidelines for ensuring the rights of victims of crime to participate in the criminal justice system.
    2. HB 14-1206. Concerning modifications to the “Colorado Charitable Solicitations Act,” and, in connection therewith, prohibiting certain charitable solicitation practices, modifying the secretary of state’s fining authority, adjusting registration statement requirements, and specifying requirements for appointing registered agents.

Stay tuned for Ten Bills of Interest.

U.S. Supreme Court Rules Private Contractors and Subcontractors Are Covered By SOX Whistleblower Protections

CoburnSuttleRiordanBy Bob Riordan, Brett E. Coburn, and Brooks A. Suttle

On March 4, 2014, the U.S. Supreme Court issued its decision in Lawson v. FMR LLC,[1] addressing for the first time the whistleblower provision of Section 806 of the Sarbanes-Oxley Act (SOX), which provided in relevant part:

No [public] company . . . or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of [whistleblowing or other protected activity].[2]

While it is clear from the statutory language that a private contractor or subcontractor of a public company cannot engage in retaliatory actions against an employee, courts have divided on whether “an employee” refers only to the public, SOX-reporting company’s employees, or also protects employees of the private contractor or subcontractor from retaliation.

In Lawson, the U.S. Court of Appeals for the First Circuit took the former view, holding that the meaning of “employee” in Section 806 is unambiguous, and that employees of privately-held companies are not covered by SOX’s whistleblower protections regardless of who their employer contracts with.[3] In a 6-3 split decision, however, the high court reversed and remanded the First Circuit’s decision, finding instead that SOX’s anti-retaliation provision also covers employees of private contractors and subcontractors that are hired by public companies covered by the law. In so doing, the Court significantly expanded SOX’s whistleblower protections to give the law what appears to be, in the words of Justice Sotomayor’s dissent, a “stunning reach.”

The plaintiffs in Lawson were two former employees of private companies that contracted to advise and manage mutual funds, which had no employees and are covered by SOX as companies required to make certain regulatory filings. After they were allegedly retaliated against for attempting to report a purported fraud related to mutual funds, the plaintiffs brought a whistleblower claim against their former employers under Section 806. The defendants’ motion to dismiss was initially denied by the District Court, but the First Circuit reversed the decision and found that dismissal was appropriate because Section 806 did not protect the plaintiffs as employees of private companies.

On appeal, the Supreme Court examined the text of the statute, the context in which it was enacted, and its legislative history. Writing for the majority, Justice Ruth Bader Ginsburg wrote with regard to statutory text that the language of Section 806 is unambiguous, and contains “numerous indicators that the statute’s prohibitions govern the relationship between a contractor and its own employees.”[4] With regard to legislative intent, Justice Ginsburg likewise found that Section 806 was enacted “to encourage whistleblowing by contractor employees who suspect fraud involving the public companies with whom they work.”[5] Justice Ginsberg was joined in the majority by Chief Justice Roberts, and Justices Breyer and Kagan. Justices Scalia penned a separate opinion, joined by Justice Thomas, concurring in the ruling but criticizing the majority’s focus on legislative intent and comparisons to other whistleblower laws.

In a strongly worded dissent in which she was joined by Justices Kennedy and Alito, Justice Sotomayor wrote that the majority’s opinion gave the SOX whistleblower laws a “stunning reach” that could lead to “absurd results,” and that “nothing in the text, context, or purpose of the Sarbanes-Oxley Act suggests that Congress actually wanted to do so.”[6] Finding that the statutory text is ambiguous, and that Congress intended a narrow reading of Section 806 that excluded employees of private companies, Justice Sotomayor dissented that whatever “laudatory purpose” the majority’s interpretation of the whistleblower law might serve, “that is not the statute Congress wrote.”[7]

The dissent notwithstanding, the Court’s decision is now the law of the land, and will likely remain so unless and until Congress acts to overturn the majority’s interpretation of Section 806. While the majority was dismissive of any “floodgate-opening concerns” about a potential deluge of new whistleblower litigation,[8] there is no question that the number of employees covered by SOX’s whistleblower provisions has been enormously expanded by the Court’s ruling. As such, many private employers who have become accustomed to thinking of themselves as outside the scope of SOX’s whistleblower provisions will need to reevaluate their practices and procedures in light of Lawson, and take steps to minimize the potential for whistleblower claims. Such steps can include, among other things, changes to the company’s training programs, employee documentation and record-keeping procedures, and internal policies governing the discipline process and the permissible grounds for taking adverse action against an employee.

At a minimum, private companies who contract to do business with public companies should seek the assistance of counsel to conduct a thorough review of their internal control and compliance procedures, in addition to modifying their anti-retaliation policies as needed. Companies should also conduct training on what is and is not permissible given SOX’s whistleblower provisions, and make it clear that knee-jerk firings and other adverse actions must be avoided when an employee reports fraud or other misconduct covered by SOX, whether allegedly occurring at the public company or at the contractor-employer. Likewise, public companies need to recognize that they may now be found liable not only for retaliation against their own employees who report SOX violations, but also for retaliatory acts conducted by agents of the public company against the employees of its private contractors and subcontractors. Public company employers thus may also need to reconsider their SOX reporting and anti-retaliation policies in light of the fact that Lawson greatly expanded the pool of potential whistleblower claimants.

As a final note on Lawson, it is worth noting that the Supreme Court chose not to weigh in on another important issue recognized in the case – the extent to which a prior decision by the Department of Labor’s (“DOL”) Administrative Review Board’s (“ARB”) was entitled to deference by the Court. Several months after the First Circuit’s decision in Lawson, the ARB came to the opposite conclusion in Spinner v. David Landau & Associates, LLC.[9] In that case, the ARB held that the meaning of “employee” in Section 806 was ambiguous, and therefore the ARB did not have to follow the First Circuit’s ruling. Instead, the ARB sought to expand SOX’s reach in holding that Section 806 applied to employees of privately-held companies if they had contracts with publicly-traded companies.[10]

Thus, when the Supreme Court agreed to hear Lawson, many observers hoped that the Court would use it as an opportunity to decide the proper level of deference that courts should give to the ARB’s construction of SOX. The Court, however, essentially passed on the issue, simply noting in a footnote that “[b]ecause we agree with the ARB’s conclusion that [Section 806] affords protection to a contractor’s employees, we need not decide what weight that conclusion should carry.”[11] But while the deference issue was left unanswered, the Court’s Lawson decision will almost certainly have a large impact in the arena of SOX whistleblower litigation. At the very least, it has given both public company and private company employers plenty to consider in ensuring that they are in compliance with SOX’s anti-retaliation laws.

Brett Coburn is a partner who concentrates his practice on employment litigation and counseling. His litigation experience includes gender, race, age and disability discrimination suits under Title VII, the ADEA and the ADA, as well as FLSA wage and hour claims and FMLA interference and retaliation claims. His experience also includes the defense of collective actions under the FLSA and ADEA. He has litigated cases involving misappropriation of trade secrets, breach of employment contracts, violation of non-competition and other restrictive covenants, defamation, breach of employee duties, tortious interference and related customer and employee raiding claims.

Brooks Suttle is an associate in the firm’s Labor & Employment Group. Brooks received his J.D., with honors, from Emory University School of Law, where he was elected to the Order of the Coif. While at Emory, he served as the executive symposium editor for the Emory Law Journal, where he was responsible for planning and organizing the 2012 Randolph W. Thrower Symposium, “Innovation for the Modern Era: Law, Policy, and Legal Practice in a Changing World.” He also received the 2011 Myron Penn Laughlin Award for Excellence in Legal Research and Writing for his journal comment: “Reframing Professionalism: An Integral Approach to Lawyering’s Lofty Ideals.”

Bob Riordan is a litigator who focuses on disputes relating to employment, business torts, unfair competition and commercial transactions. He regularly represents clients in both federal and state courts, as well as various agencies and arbitral forums. He has appeared in trial and appellate courts throughout the country, and has been recognized for his achievements in Best Lawyers in AmericaChambers USA: America’s Leading Lawyers for Business, Georgia Trend’s Legal Elite, PLC Which Lawyer? and Super Lawyers magazine. Mr. Riordan has extensive experience in defending wage disputes brought on a mass and class basis as well as whistleblower claims. He also regularly defends companies against claims of all varieties of discrimination and retaliation, as well as claims relating to the law of public accommodation, tortious interference, breach of fiduciary and other duties, theft of trade secrets and similar matters. In addition, Mr. Riordan often litigates contract disputes, including earn-out and other claims tied to business combinations.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.

 


[1] 571 U.S. ___ (March 4, 2014).

[2] 18 U.S.C. § 1514A(a) (2006 ed.) (emphasis added).

[3] See Lawson v. FMR, LLC, 670 F.3d 61 (1st Cir. 2012).

[4] Slip op. at 16.

[5] Id. at 19. Despite Justice Ginsburg’s observation, the rule of Lawson extends to reports of alleged misconduct committed by both the public company and the employer-contractor. Indeed, as pointed out in the dissent, under the majority’s holding, the employer-contractor’s alleged misconduct may have nothing to do with the contract between the employer-contractor and the public company.

[6] Id. at 2 (Sotomayor, dissenting).

[7] Id. at 20.

[8] Slip op. at 22.

[9] ARB Nos. 10-111, 10-115 (May 31, 2012).

[10] For its part, the First Circuit noted in its decision that, because the statute was unambiguous, the court owed no so-called Chevron deference to any contrary agency determinations. See Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (holding that agency interpretations of ambiguous statutes will be upheld so long as they are reasonable, but where a statute is unambiguous, the courts as well as the administrative agencies must give effect to its clear meaning).

[11] Slip op. at 9 n.6. The dissent in Lawson argues that the majority in fact declined deference by not endorsing all of the ARB’s holding in Spinner. Slip op. at 17 n.11.

Tenth Circuit: In Sexual Harassment Case, Summary Judgment For County and Judge Affirmed in Part and Reversed in Part

The Tenth Circuit Court of Appeals published its opinion in Eisenhour v. Weber County on Wednesday, March 12, 2014.

Marcia Eisenhour worked for Weber County for 24 years, serving as the Court Administrator for the Weber County Justice Court under the direct supervision of Judge Storey. According to Ms. Eisenhour, Judge Storey began acting inappropriately toward Ms. Eisenhour in early 2008. He became “touchy” and would often stand so close to her that his groin rubbed against her. In addition to the touching, Judge Storey once told her that he had a dream about her in which she was naked. Ms. Eisenhour also found a poem by Judge Storey, which revealed his romantic feelings for her. According to Ms. Eisenhour, she was also subjected to unreasonable demands about her activities away from work.

The County launched an investigation, but ultimately decided not to discipline Judge Storey. The matter was later referred to Utah’s Judicial Conduct Commission, which the Commission dismissed.

Between August and December 2009, the County Commissioners closed the Justice Court, which meant the loss of Ms. Eisenhour’s job. Ms. Eisenhour applied to the County for three vacant positions. Unsuccessful, she lost not only her job but also the potential for retirement benefits. She eventually spoke to the media about the Judicial Conduct Commission’s investigation of Judge Storey.

Marcia Eisenhour sued Weber County, three of its county commissioners, and Judge Storey. She claimed violations of Utah’s Whistleblower Act, the First Amendment, the Fourteenth Amendment’s Due Process and Equal Protection Clauses, and Title VII. The district court granted summary judgment to the defendants on all claims. Ms. Eisenhour appealed.

Ms. Eisenhour first challenged the district court’s exclusion of her testimony on disciplinary proceedings involving the judge. The Tenth Circuit affirmed. The exclusion of Ms. Eisenhour’s testimony during the disciplinary proceedings involving Judge Storey was proper, since, under the applicable Utah statute, section 78A-11-112(1), testimony taken during the course of proceedings before the Judicial Conduct Commission cannot be introduced in a civil action.

Ms. Eisenhour asserted a claim under Title VII for retaliation. The district court held that it lacked jurisdiction over the claim because Ms. Eisenhour failed to exhaust administrative remedies. The Tenth Circuit agreed. Ms. Eisenhour filed an EEOC claim for sexual harassment, but this claim did not refer to any of the retaliatory acts underlying the eventual cause of action under Title VII. As a result, the court affirmed the award of summary judgment to the County on the Title VII retaliation claim.

Next, Ms. Eisenhour invoked the First Amendment, claiming that the County retaliated against her by closing the Justice Court when she spoke to the media about the Judicial Conduct Commission’s investigation of Judge Storey. The Tenth Circuit held that triable issues of fact existed and that the district court erred in granting summary judgment to the County. When the court is faced with a First Amendment claim by a public employee, the district court must balance the First Amendment interests of that employee, speaking as a concerned citizen, with the government’s interests in promoting the efficiency of the public services it performs through its employees. The Tenth Circuit held that her comments to the media involved protected speech and that she presented sufficient evidence for a reasonable fact-finder to infer that her comments were a motivating factor in the County’s decision to close the Court. The evidence also created a genuine issue of fact about the legitimacy of the County’s explanation for closing the Justice Court.

On the First Amendment claim for retaliation, Ms. Eisenhour also sued three county commissioners in their personal capacities. This claim was based on the Commissioners’ decision to close the Justice Court. Their motivation, according to Ms. Eisenhour, was to retaliate for her comments to the media. Like the County, the Commissioners argued that Ms. Eisenhour’s speech was not protected under the First Amendment and that the County closed the courthouse because of budgetary considerations rather than a retaliatory motive. As discussed above, these arguments involved factual issues turning on the resolution of conflicting evidence, thereby preventing summary judgment for the County.

Ms. Eisenhour further alleged that the County violated Utah’s Whistleblower Act, which prohibits government employers from retaliating against employees who report employer misconduct. According to Ms. Eisenhour, the County violated the state law by closing the Justice Court and refusing to hire her. Ms. Eisenhour waited more than 180 days from the alleged violation to assert a Whistleblower Act claim, so this claim was time-barred. However, for her claim relating to the closing of the court, the claim did relate back to the original filing, so it was not time-barred.

Ms. Eisenhour argued that the County deprived her of a property interest in her job without due process of law. The district court held that Ms. Eisenhour had failed to establish a protected property interest. The Tenth Circuit agreed. For purposes of the Fourteenth Amendment’s Due Process Clause, property interests must derive from some independent source, such as state law, contract, or other understandings that give rise to a claim of entitlement. However, her employment was at-will. And at-will employees lack a property interest in continued employment.

Ms. Eisenhour asserted that the County violated her right to equal protection, and the district court granted summary judgment to the County on the ground that Judge Storey was not an official policymaker. The Tenth Circuit agreed with the district court’s decision. A municipality can be liable under Section 1983 for the acts of a municipal official only when the official possesses final policymaking authority to establish municipal policy with respect to the acts in question.

Judge Storey lacked policymaking authority to touch Ms. Eisenhour inappropriately under the County’s sexual harassment policy. Further, his monitoring of her whereabouts (when missing work) did not violate the Equal Protection Clause. As a result, the County was entitled to summary judgment on the equal-protection claim.

Ms. Eisenhour further asserted an equal-protection claim against Judge Storey. The district court concluded that Judge Storey was entitled to qualified immunity. The Tenth Circuit reversed the district court’s grant of summary judgment to Judge Storey, concluding that he was not entitled to qualified immunity and that there was a fact-issue about whether Judge Storey inappropriately touched Ms. Eisenhour.

To overcome a defense of qualified immunity, a plaintiff must show that: (1) the defendant’s conduct violated the law, and (2) the law was clearly established when the violation occurred. The Tenth Circuit held that Ms. Eisenhour made the threshold showing and that issues of fact precluded summary judgment.

For the reasons stated above, the Tenth Circuit affirmed the award of summary judgment on Ms. Eisenhour’s claims against the County under the: (1) Whistleblower Act for a refusal to rehire her, (2) Title VII, and (3) § 1983 based on a deprivation of due process and denial of equal protection. The court also held that the district court properly excluded Ms. Eisenhour’s testimony taken during the judicial-misconduct investigation. But the court agreed with Ms. Eisenhour that genuine issues of fact precluded summary judgment on: (1) her § 1983 claim against the County and the County Commissioners based on the First Amendment, (2) the Whistleblower Act claim against the County based on the court closing, and (3) the § 1983 claim against Judge Storey based on the Fourteenth Amendment’s Equal Protection Clause.

Accordingly, the case was REMANDED to the district court with instructions to VACATE the award of summary judgment on these claims.

—–

Defendant Craig Storey requested rehearing, arguing in part: (1) The panel opinion erroneously relied in part on sworn testimony before the Judicial Conduct Commission even though the testimony was deemed inadmissible; and (2) the evidence did not support Ms. Eisenhour’s claim that Defendant Storey knowingly and intentionally committed sexual harassment by telling her about a dream. On these issues, Defendant Storey also requested en banc consideration. In addition, he sought en banc consideration on the issue of qualified immunity.

The panel granted rehearing on the first issue, which involved reliance on the Commission testimony by Ms. Eisenhour. The remainder of the petition for panel rehearing was denied. In light of the partial grant of the petition, however, the panel vacated the opinion issued on December 31, 2013. The clerk was directed to substitute the amended decision above and to file it contemporaneously with this order.

Workplace Privacy To Be Discussed at Employment Law 2014 Conference in March

One of the hot-topic issues for employment law today is workplace privacy. Qusair Mohamedbhai, a leading Colorado employment law attorney, and Philip Gordon, a leading privacy attorney who focuses on HR privacy issues, will tackle this complex and rapidly evolving area of the law at the CBA-CLE 2014 Employment Law Conference on March 20-21. Expect a lively and informative discussion including critical privacy and information security issues raised by the “Bring Your Own Device” (BYOD) movement and how recent state laws and EEOC guidelines can impact workplace privacy policies involving background checks, especially the use of an employees’ criminal history for employment purposes, and access to employees’ personal social media. Below are excerpts from their upcoming presentation.

Workplace Privacy:
“In the coming year, employers may expect to see more restrictions on access to applicants’ and employees’ criminal history, credit information, and personal social media content.  To further complicate the challenges of addressing privacy in the workplace, employers will be required to grapple with next-generation issues raised by the use of social media as a business tool and the increasing adoption of “bring-your-own-device” (BYOD) programs.  The ever-shifting balance between employer prerogative and employee privacy likely will continue to move in a direction that favors employee privacy.” –  Philip L. Gordon, Littler Mendelson

Workplace Privacy: Criminal Background Checks & Victims of Crimes:
2012 EEOC Guidance on Arrest and Conviction Records in Employment Decisions: For criminal conduct exclusions in hiring practices that are alleged to have an unlawful disparate impact, relevant information includes the text of the policy or practice, associated documentation, and information about how the policy or practice was actually implemented. For example, the EEOC may look for offenses or classes of offenses that were reported to the employer (all felonies, all drug offenses) or how far back in time the report reached. 2012 WL1499883 § V (E.E.O.C. Guidance Apr. 25, 2012). – Qusair Mohamedbhai, RATHOD ǀ MOHAMEDBHAI LLC

CLE Program: Employment Law 2014

This CLE presentation will take place on March 20-21, 2014. Click here to register for the live program. You may also call (303) 860-0608 to register.

Can’t make the live program? Order the homestudy here — MP3 audio downloadVideo OnDemandCD homestudy

Colorado Supreme Court: City & County of Denver Has Authority to Unilaterally Draft Disciplinary Rules

The Colorado Supreme Court issued its opinion in City & County of Denver v. Denver Firefighters Local No. 858 on Monday, March 3, 2014.

Firefighters—Departmental Rules of Conduct—Firefighter Right to Organize and Bargain Collectively—Denver City Charter.

In this case, which involved an issue of first impression, the Supreme Court held that the City and County of Denver has authority to unilaterally draft and implement disciplinary rules. This authority is not limited by the Denver firefighters’ right to engage in collective bargaining. Accordingly, the Court reversed the judgment of the court of appeals because the court of appeals erroneously concluded that discipline is a term and condition of employment that is subject to collective bargaining. The case was remanded to the trial court.

Summary and full case available here.

Tenth Circuit: Action to Vacate Arbitration Award Untimely

The Tenth Circuit Court of Appeals published its opinion in United Food & Commercial Workers International Union v. King Soopers on Friday, February 28, 2014.

The United Food and Commercial Workers International Union, Local No. 7 (the Union) sued King Soopers, Inc. under § 301 of the Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185, to enforce an arbitration award. The United States District Court for the District of Colorado ruled that the award did not draw its essence from the Union’s collective bargaining agreement (CBA) with King Soopers and refused to enforce it.  The Union appealed.

The Tenth Circuit reversed. This appeal was controlled by the court’s decision in Babcock & Wilcox, 826 F.2d 962. Although King Soopers could have brought a timely action to vacate the award on the ground adopted by the district court, it did not do so. The passing of the 90-day time limitation period for an action to vacate an arbitration award completely barred, in a subsequent confirmation proceeding, the raising of defenses that could have been raised as grounds to vacate the award. King Soopers could therefore not raise that defense against the Union’s action to enforce the award. For the same reason, the court also held that King Soopers could not raise the defense that the arbitrator lacked authority to impose a remedy.

Based on the untimelinessof King Soopers’ challenge, the Tenth Circuit REVERSED with instructions to enforce the award.

The Intersection of Religious Freedoms and Workplace Anti-Discrimination Laws

Qusair Mohamedbhia Bio PicBy Qusair Mohamedbhai

It is not every day that lawyers from the ACLU and Focus on the Family share a public stage to debate religious freedoms and workplace anti-discrimination laws. In recent years, tensions between employee anti-discrimination rights in the workplace and religious freedoms of employers have dramatically increased in magnitude and complexity. In the last decade, courts have significantly expanded the rights of religious employers. Additionally, religion-based discrimination charges filed with Equal Employment Opportunity Commission have more than doubled in the past fifteen years. And employees’ rights in the areas of sexual orientation and healthcare have been affected by employers claiming to be governed by faith-based principles.

“The Intersection of Religious Freedoms and Workplace Anti-Discrimination Laws,” which was part of a larger CLE in Colorado, Inc. program titled “Workplace Discrimination,” produced a lively and informative discussion. The presenters debated the tension between anti-discrimination laws including the Colorado Anti- Discrimination Act’s inclusion of sexual orientation as a protected class, and laws protecting religious employers’ rights including the Free Exercise Clause and Religious Freedom Restoration Act. As expected, the ACLU and Focus on the Family had divergent opinions on matters related to the contraceptive mandate issued by the U.S. Department of Health and Human Services and religious employer exemptions. The panelists also debated the holdings, reach, and implications of recent high-profile decisions spanning a variety of related topics including the cases of Hosanna-Tabor, Windsor, Hobby Lobby, Abercrombie & Fitch, Little Sisters of the Poor, and Masterpiece Cakeshop Lakewood Bakery. The presenters and moderator demonstrated extraordinary knowledge of these difficult constitutional law matters, as well as theological arguments, historical context, and pragmatic public policy consequences.

Click here to view online

Panelists: Mark Silverstein, Esq., American Civil Liberties Union of Colorado, L. Martin Nussbaum, Esq., Lewis Roca Rothgerber LLP, and Bruce Hausknecht, Esq., Focus on the Family. Moderator: Scott L. Levin, Esq., Regional Director, Mountain States Region, Anti-Defamation League.

Qusair Mohamedbhai, Esq., is a partner at Rathod | Mohamedbhai llc. His practice is exclusively in the areas of plaintiff’s employment discrimination and constitutional civil rights litigation. He advocates for the rights of employees in the workplace, and for the civil rights of all individuals against governmental and institutional abuses of power. He is a National Institute for Trial Advocacy trial skills and techniques faculty member, co-chair of the Employment Law Section for the Colorado Trial Lawyers Association, and General Counsel to the Colorado Muslim Society. He received his Bachelor of Science in biology from the University of Alberta in 2000, and his Juris Doctorate from the University of Wyoming in 2003.


CLE Homestudy: Workplace Discrimination

This CLE presentation took place on January 10, 2014. Click here to order the Video OnDemand, click here for the MP3 audio download, and click here for the CD homestudy. You may also call (303) 860-0608 to order.

Tenth Circuit: In Sex Discrimination Case, Genuine Issues of Fact Existed as to Plaintiff’s Title VII Claims

The Tenth Circuit Court of Appeals published its opinion in Kramer v. Wasatch County Sheriff’s Office on Tuesday, February 25, 2014.

Camille Kramer worked for the Wasatch County Sheriff’s Department from 2005 to 2007. During that time, she was the victim of repeated sexual harassment, sexual assault and rape at the hands of Sergeant Rick Benson.

Ms. Kramer sued Wasatch County, alleging that the sexual harassment she experienced at the hands of Sergeant Benson constituted sex discrimination prohibited by both Title VII of the Civil Rights Act, 42 U.S.C. § 2000e-2(a)(1), and the Constitution, 42 U.S.C. § 1983. The district court granted summary judgment to Wasatch County. The court held that Sergeant Benson was not Ms. Kramer’s supervisor for Title VII purposes because he did not have the actual authority to unilaterally fire her. It further held that supervisor status could not be premised on apparent authority because no reasonable juror could find Ms. Kramer reasonable in believing Sergeant Benson had the power to fire her. Even assuming Sergeant Benson was Ms. Kramer’s supervisor, the court concluded that Wasatch County was not vicariously liable for his conduct because Ms. Kramer suffered no tangible employment action and, alternatively, because Wasatch County was entitled to prevail on its Faragher/Ellerth affirmative  defense as a matter of law.

Finally, the district court held that Wasatch County was not negligent and thus could not be liable for Sergeant Benson’s harassment under co-worker harassment standards. As to Ms. Kramer’s § 1983 claims, the court determined that Sheriff Van Wagoner was entitled to qualified immunity, and that the County was not liable because it had no pattern, practice, or custom of illegal sex discrimination. Ms. Kramer appealed on all claims.

Sexual harassment in the workplace is a form of sex discrimination prohibited by Title VII. In general, an employer is directly liable for an employee’s unlawful harassment if the employer was negligent with respect to the offensive behavior. If the harasser is a supervisor rather than merely a co-worker, however, the employer may be vicariously liable for the conduct, depending on the circumstances.  If the supervisor’s harassment culminates in a “tangible employment action,” the employer is strictly liable for sex discrimination, with no defense. If no tangible employment action occurs, the employer may still be vicariously liable for the supervisor’s harassment if the plaintiff proves the harassment was severe or pervasive, and the employer is unable to establish the affirmative defense announced in Faragher v. City of Boca Raton, 524 U.S. 775, 807 (1998), and Burlington Indus., Inc. v. Ellerth, 524 U.S. 742 (1998). For these reasons, whether the harasser was a “supervisor” within the meaning of Title VII is a critical threshold question in determining whether the employer can be held vicariously liable for the harassment.

The United States Supreme Court has held that a “supervisor” under Title VII is an employee whom the employer has empowered to take tangible employment actions against the victim, i.e., to effect a significant change in employment status, such as hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits. Importantly, however, an employee need not be empowered to take such tangible employment actions directly to qualify as a supervisor. A manager who works closely with his or her subordinates and who has the power to recommend or otherwise substantially influence tangible employment actions, and who can thus indirectly effectuate them, also qualifies as a “supervisor” under Title VII.

Sergeant Benson was Ms. Kramer’s direct supervisor. He completed her performance evaluations and made recommendations regarding her employment status. The record established that Ms. Kramer raised a genuine issue of fact as to whether the Wasatch County Sheriff’s Department effectively delegated to Sergeant Benson the power to cause tangible employment actions regarding Ms. Kramer by providing for reliance on recommendations from sergeants such as Benson when making decisions regarding firing, promotion, demotion, and reassignment.

Even if it was determined that Sergeant Benson lacked the actual supervisory authority described above, he could still qualify as a supervisor under apparent authority principles. In the usual case, a supervisor’s harassment involves misuse of actual power, not the false impression of its existence. But in the unusual case, apparent authority can suffice to make the harasser a supervisor for Title VII purposes, so long as the victim’s mistaken conclusion is a reasonable one. Under the circumstances here, given the County’s and the Sheriff’s manuals, there was a genuine issue of fact as to whether Ms. Kramer was reasonable in believing that Sergeant Benson had additional powers – such as the power to transfer, discipline, demote, or fire her. A jury was especially likely to conclude such beliefs were reasonable because Sergeant Benson repeatedly told Ms. Kramer he did in fact possess such powers.

If Sergeant Benson was a supervisor, Wasatch County would be strictly liable for his harassment of Ms. Kramer if it culminated in a tangible employment action. However, the Tenth Circuit held that none of the following actions constituted tangible employment actions: (1) the rape; (2) the bad performance evaluation that was never submitted; (3) Sergeant Benson denying her vacation days; and (4) Sergeant Benson refusing to give her road training and assigning her to the magnetometer full-time. The Tenth Circuit held that no tangible employment action occurred. Because these actions did not constitute “tangible employment action,” the County could not be held strictly liable for sex discrimination.

Even absent a tangible employment action, if Sergeant Benson qualified as a supervisor, the County could be vicariously liable for his severe or pervasive sexual harassment unless it could establish the affirmative defense announced in Faragher and Ellerth. This defense has two elements: (a) that the employer exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and (b) that the plaintiff employee unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

The Tenth Circuit held that Wasatch County did not support its summary judgment motion with evidence that entitled it to judgment as a matter of law under either of the affirmative defense’s two prongs. Wasatch County’s evidence did not establish as a matter of law that the County took reasonable means to prevent and promptly correct sexual harassment. The County did not provide any evidence that the Sheriff Department’s interventions were reasonably calculated to end the harassment, deter future harassers, or protect Ms. Kramer. Not only did the investigation here fail to demonstrate that the County employed reasonable means to discharge its Title VII obligations, the Sheriff’s response to Ms. Kramer’s allegations suggested that he did not understand he had a Title VII compliance matter on his hands. There was no evidence the Department sought to improve its sexual harassment prevention program or otherwise reduce the risk of future harassment. On this record, there remained a genuine issue of fact as to whether the County’s response to Ms. Kramer’s sexual harassment complaint fell short of demonstrating that the County took reasonable efforts to discharge its duty under Title VII, as required to establish the affirmative defense.

Under prong two of the affirmative defense, Wasatch County’s evidence did not compel the conclusion that Ms. Kramer was unreasonable. Ms. Kramer did not lodge a formal complaint. However, she testified that on numerous occasions Sergeant Benson sexually assaulted her and subsequently told her to “be quiet” and “not say anything” or it would be “a career ender.” Sergeant Benson also threatened Ms. Kramer with a poor evaluation unless she would keep her mouth shut and not say anything. The court concluded that the record demonstrated a persistent theme: Sergeant Benson was an intimidating person with job-related power over Ms. Kramer who would sexually harass her and then threaten that she would lose her job if she complained.

Ms. Kramer’s fear that Sergeant Benson would make good on his threats was not per se unreasonable given that he did in fact take adverse job actions against her at work – denying her leave time, threatening her with a bad performance evaluation, and giving her long shifts on the magnetometer. Even if these actions did not rise to the level of a tangible employment action, a reasonable employee could well find a combination of threats and actions taken with the design of imposing both economic and psychological harm sufficient to dissuade him or her from making or supporting a charge of discrimination. This evidence raised a genuine issue of fact as to whether Ms. Kramer’s fears of Sergeant Benson were credible and reasonable because they were grounded in concrete reasons to apprehend that complaint would result in affirmative harm to the complainant.

Taken together, the evidence was also sufficient to raise a genuine issue of fact as to whether Ms. Kramer was reasonable in believing it would be futile and potentially detrimental to herself to complain. Accepting Ms. Kramer’s version of the facts, a picture emerged in which Sergeant Benson used his job-related power over Ms. Kramer to compel, pressure, or coerce her to do his bidding. While Ms. Kramer technically could have avoided some of the encounters, the record did not establish that she could have done so without incurring some form of adverse employment action.

Accordingly, the Tenth Circuit reversed summary judgment for Wasatch County on both prongs of the Faragher/Ellerth defense.

However, the court affirmed the district court’s holding that the County’s liability could not be premised on negligence. The record evidence viewed in the light most favorable to Ms. Kramer failed to support an inference that the County had actual or constructive knowledge of Sergeant Benson’s sexual harassment before Ms. Kramer’s car accident.

Finally, the County was not liable for sex discrimination under § 1983. As to institutional liability under § 1983, the County could only be liable for the actions of Sergeant Benson if it had a custom, practice, or policy that encouraged or condoned the unconstitutional behavior – here, workplace sexual harassment. Kramer had to demonstrate a direct causal link between the municipal action and the deprivation of federal rights, and she had to show that the municipal action was taken with deliberate indifference to its known or obvious consequences. Ms. Kramer had to establish that the County failed to prevent sexual harassment with deliberate indifference, that the need for more or different action was so obvious, and the inadequacy so likely to result in the violation of constitutional rights, that the policymakers of the city can reasonably be said to have been deliberately indifferent to the need. The court held that, on the record in this case, no reasonable jury could find that the risk of sergeants sexually assaulting their subordinates was “so obvious” the County’s policymakers should have known about it.

The Tenth Circuit therefore AFFIRMED summary judgment as to the § 1983 claim, but REVERSED on the Title VII claim, which the court REMANDED for trial.

e-Legislative Report: February 24, 2014

CBA Legislative Policy Committee

For readers who are new to CBA legislative activity, the Legislative Policy Committee (LPC) is the CBA’s legislative policy-making arm during the legislative se ssion. The LPC meets weekly during the legislative session to determine CBA positions on requests from the various sections and committees of the Bar Association.

Action taken at Feb. 21 LPC meeting:

  • The Committee voted to support HB 14-1073. Concerning the recording of legal documents.
  • The Committee voted to oppose HB 14-1162. Concerning protection of the victim of a sexual assault in cases where a child was conceived as a result of the sexual assault, and, in connection therewith, making legislative changes in response to the study by and the report of the recommendations from the task force on children conceived through rape. A bill summary is below.
  • The Committee voted to oppose HB 14-1061. Concerning sentences imposing monetary payments in criminal actions, and, in connection therewith, eliminating prison sentences for persons who are unable to pay criminal monetary penalties.

At the Capitol—Week of Feb. 17

A scorecard of the committee and floor work follows.

In the House

Monday, Feb. 17

Passed 3rd Reading:

  • SB 14-19. Concerning the state income tax filing status of two taxpayers who may legally file a joint federal income tax return. Vote: 37 yes, 26 no and 2 excused.
  • HB 14-1117. Concerning the creation of the Colorado premature birth commission. Vote: 50 yes, 13, no and 2 excused.
  • HB 14-1060. Concerning the authority of a municipality to compensate members of a municipal planning commission. Vote: 41 yes, 22 no, and 2 excused.
  • HB 14-1166. Concerning the renewal of concealed handgun permits by Colorado county sheriffs. Vote: 63 yes, 0 no, and 2 excused.
  • SB 14-25. Concerning grants for domestic wastewater treatment works for small communities. Vote: 63 yes, 0 no, and 2 excused.
  • HB 14-1132. Concerning the ability of a local government to establish the hours during which alcohol beverages may be sold for consumption on a licensed premises. At the request of the sponsor the bill was defeated. Vote: 3 yes, 60 no, and 2 excused.
  • HB 14-1125. Concerning the circumstances under which a unit owners’ association may disclose contact information for members and residents under the “Colorado Common Interest Ownership Act.” Vote: 63 yes, 0 no, and 2 excused.

Tuesday, Feb. 18

Passed 3rd Reading:

  • HB 14-1080. Concerning a sales and use tax exemption for the Colorado Ute Indians. Vote: 63 yes, 0 no, and 1 excused.
  • HB 14-1040. Concerning criminal provisions relating to drug testing. Vote: 58 yes, 5 no, and 1 excused.
  • HB 14-1174. Concerning the sunset review of the natural areas council. Vote: 54 yes, 10 no, 1 excused.
  • HB 14-1107. Concerning the authority of the department of revenue to offer taxpayers the option to receive electronic notices. Vote: 64 yes, 0 no, and 1 excused.
  • HB 14-1183. Concerning the reinstatement of the authority for active military personnel to practice professionally. Vote: 53 yes, 10 no, and 2 excused.

Wednesday, Feb. 19

Passed on 3rd Reading:

  • HB 14-1177. Concerning requirements governing meetings of the boards of county commissioners of the larger counties. Vote: 65 yes and 0 no.
  • HB 14-1194. Concerning the recreation of the legislative digital policy advisory committee. Vote: 64 yes and 1 no.
  • HB 14-1121. Concerning notice requirements for county highway contract bid solicitations, and, in connection therewith, increasing the threshold value of a contract for which a county must advertise in a newspaper in the county or post notice in the county courthouse from five thousand dollars to the amount at which a contract requires a contractor’s bond. Vote: 40 yes and 25 no.
  • HB 14-1215. Concerning the ability of a federal home loan bank to enforce its rights with regard to collateral subject to a security agreement. Vote: 65 yes and 0 no.
  • HB 14-1126. Concerning the requirement to include notification to a patient regarding the patient’s breast tissue classification with the required mammography report. Vote: 52 yes and 13 no.

Thursday, Feb. 20

Passed on 3rd Reading:

  • HB 14-1172. Concerning exempting certain public safety departments from certain statutory requirements related to the impact of a criminal conviction on state employment opportunities. Vote: 65 yes and 0 no.

Friday, Feb. 21

Passed on 3rd Reading:

  • HB 14-1229. Concerning authorizing sharing information between state and local government agencies related to legal marijuana. Vote: 63 yes, 0 no, and 2 excused.
  • SB 14-47. Concerning the payment of death benefits for seasonal wildland firefighters killed in the line of duty. Vote: 63 yes, 0 no, and 2 excused.
  • HB 14-1224. Concerning a set aside goal in state procurement for service-disabled veteran owned small businesses. Vote: 56 yes, 7 no, and 2 excused.

In the Senate

Monday, Feb. 17

Passed on 3rd Reading:

  • SB 14-132. Concerning the repeal of the requirement that a soldier be killed while deployed to a combat zone to issue a fallen soldier license plate. Vote: 35 yes and 0 no.
  • HB 14-1081. Concerning the motor carrier safety fund, and, in connection therewith, creating the fund, transferring money from the hazardous materials safety fund to the motor carrier safety fund, and specifying that any excess uncommitted reserves in the public utilities commission motor carrier fund be transferred to the motor carrier safety fund. Vote: 35 yes and 0 no.
  • Upon a motion for reconsideration, HB 14-1031. Concerning the weight of motor vehicles that are subject to rate regulation when being towed without the owner’s consent. Vote: 29 yes and 6 no.
  • SB 14-138. Concerning civil immunity for community volunteers assisting at an emergency. Vote: 35 yes and no.
  • HB 14-1004. Concerning emergency management, and, in connection therewith, eliminating and reorganizing two entities within the division of homeland security and emergency management in the department of public safety and authorizing the governor to provide individual assistance during a disaster absent a presidential declaration of the same. Vote: 35 yes and 0 no.

Tuesday, Feb. 18

Passed on 3rd Reading:

  • SB 14-126. Concerning the reclassification of the state lottery division as a type 1 agency. Vote: 28 yes and 7 no.
  • SB 14-101. Concerning establishment of the unauthorized use of certain veterinary technician titles as a deceptive trade practice under the “Colorado Consumer Protection Act.” Vote: 18 yes and 17 no.
  • SB 14-137. Concerning certification of workers’ compensation insurance forms. Vote: 34 yes and 1 no.

Wednesday, Feb. 19

Passed on 3rd Reading:

  • SB 14-97. Concerning the immunity of public agencies against liability arising from the wildfire mitigation activities of insurance companies. Vote: 35 yes 0 no.
  • SB 14-121. Concerning financial assistance for local governments after a declared disaster emergency. Vote: 35 yes and 0 no.
  • SB 14-103. Concerning the phase-out of the sale of certain low-efficiency plumbing fixtures. Vote: 19 yes and 16 no.

Thursday, Feb. 20

Passed on 3rd Reading:

  • SB 14-43. Concerning the inclusion of certain land areas used to grow products that originate above the ground within the classification of “all other agricultural property” for property tax purposes. Vote: 34 yes and 0 no.
  • SB 14-135. Concerning the repeal of certain provisions concerning the purchasing of firearms in states that are contiguous to Colorado. Vote: 34 yes, 0 no, and 1 excused.

Friday, Feb. 21

Passed on 3rd Reading:

  • HB 14-1086. Concerning a requirement that a legal notice published in a newspaper is also published on a statewide web site maintained by a majority of Colorado newspapers. Vote: 30 yes and 5 no.
  • HB 14-1035. Concerning collection of restitution ordered pursuant to a deferred judgment. Vote: 35 yes and 0 no.

Stay tuned for 10 bills of interest.