August 20, 2017

Tenth Circuit: Random Drug Test for County Employee Acceptable When Employee Holds Safety-Sensitive Position

The Tenth Circuit Court of Appeals issued its opinion in Washington v. Unified Government of Wyandotte County, Kansas on February 6, 2017.

Roberick Washington was a lieutenant at the Wyandotte Country Juvenile Detention Center in Kansas City, Kansas. The position entailed Washington interacting with residents, conducting disciplinary hearings for residents, driving the County van to take juveniles to the intake assessment center, and being present if a fight broke out. Wyandotte County has a random drug testing policy that applies to employees in “safety sensitive positions.” The county’s Policy on Substance Abuse and Drug and Alcohol Testing lists Washington’s position, “juvenile lieutenant,” as a safety sensitive position. The policy states that a failed drug or alcohol test is grounds for discipline, including discharge.

Sheriff Donald Ash terminated Washington after he tested positive for cocaine following a random drug test. Pursuant to the Human Resource Guide, Washington Appealed Ash’s decision to the administrator of the Juvenile Detention Center. This grievance was denied, and Washington appealed to the County Administrator’s Office. After a hearing, an assistant county administrator upheld the termination. Washington claims that he sought an evidentiary hearing and a name-clearing hearing, but was denied both.

Washington alleged three violations of 42 U.S.C. § 1983, namely that the drug test was an illegal search in violation of his Fourth and Fourteenth Amendment rights, he was deprived of his property interest in continued employment without due process, and defendants failed to provide him with a name-clearing hearing. Additionally, Washington claimed the county breached an implied contract created by its written disciplinary policies in violation of state contract law. The district court granted summary judgment for the defendants on all counts.

The Tenth Circuit first addressed Washington’s § 1983 claims. Municipalities are not protected by qualified immunity, so to grant summary judgment in favor or a municipality, the pleadings and supporting materials must establish there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. A plaintiff must identify an unconstitutional policy that caused the claimed injury in order for a municipality to be liable under § 1983. A plaintiff must establish that the municipal employee causing the harm violated the plaintiff’s constitutional rights.

The Tenth Circuit first addressed Washington’s claim that the county’s random drug test violated the Fourth Amendment’s probable cause and warrant requirements. Ordinarily, a search must be based on individualized suspicion of wrongdoing. However, when the government asserts a special need beyond ordinary crime detection, the Tenth Circuit has found suspicionless drug testing reasonable if the government’s interests outweigh the individual’s privacy interests. Courts have held that when drug use among the individuals tested would threaten the workplace or public safety, the government’s concerns are real. Additionally, courts have held that random drug tests are effective at detecting and deterring drug use.

The Tenth Circuit held that the county had a legitimate special need because the random drug tests to juvenile lieutenants ensured the safety and welfare of the children housed in the juvenile detention center. The juvenile lieutenant position involved interactions with residents, and drug use would impair his ability to interact with the youth. Additionally, the random testing minimized the possibility that employees would evade detection and maximized deterrence. Therefore, the Tenth Circuit found a legitimate special need for the random drug testing.

The Tenth Circuit then weighed the special need against Washington’s privacy interests to determine if the tests were reasonable. The Tenth Circuit held that as a correctional employee, Washington’s expectation of privacy was diminished. Additionally, the drug testing was minimally invasive, as Washington provided a sample behind a closed door with no supervision.

Next, the Tenth Circuit held that the county presented two interests that were important enough to justify testing Washington. The first was that Washington was working with juveniles in an educational setting, and an employee’s illegal drug use presented a risk of harm to minors. Second, if an employee has law enforcement duties and access to direct contact with inmates, that employee’s illegal use of drugs presents a significant threat to inmates and the security of the facility. The Supreme Court has held that suspicionless drug testing of employees in certain safety sensitive positions was reasonable. In this case, the county’s policy lists “juvenile lieutenant” as a safety sensitive position. The Tenth Circuit held that this classification was reasonable to Washington’s position based on the duties that he performed. Therefore, the Tenth Circuit held that in this specific instance, the county’s interests were more important and outweighed Washington’s diminished privacy rights, and thus the random drug test was reasonable. Consequently, neither Sheriff Ash nor the county could be subject to § 1983 liability.

Next, the Tenth Circuit addressed Washington’s claim that the county’s personnel policies established he had a protected property interest in his continued employment at the Juvenile Detention Center. The Tenth Circuit stated a two-part inquiry to determine whether a plaintiff was denied procedural due process. First, the plaintiff must have a protected interest to which due process is applicable. The second inquiry is whether the plaintiff was afforded an appropriate level of due process.

Here, the Tenth Circuit looked to Kansas state law to determine if Washington had a protected property interest. The Tenth Circuit determined that Kansas law established that public employment is presumptively at-will, and that Washington did not provide evidence to rebut this presumption. The Tenth Circuit held that personnel policies alone were insufficient to create an implied employment contract. Therefore, the Tenth Circuit affirmed the district court’s grant of summary judgment on this claim.

The Tenth Circuit affirmed the district court’s grant of summary judgment for Washington’s claim that he was entitled to a name-clearing hearing because Washington’s pretrial order did not reference any damaged liberty interest.

Finally, the Tenth Circuit holds that because Washington failed to establish that there was an implied employment contract, the county was entitled to summary judgment on his breach of contract claim.

Electronic Court Notice Bill, Increase of Life Insurance Exemption Bill, Subpoena Clarifications Bill, and More Signed Monday.

On Monday, March 20, 2017, the governor signed 17 bills into law. To date, he has signed 80 bills this legislative session. Some of the bills signed Monday include a bill increasing the exemption amount for a cash surrender of life insurance, a bill authorizing the fiduciary of an endowment fund to distribute principal under a unitrust election, a bill allowing an attorney general or district attorney to issue a subpoena for people engaged in deceptive trade practices, a bill allowing court clerks to electronically notice parties, and a bill increasing the appropriation to the Department of Law for providing legal services to the Department of Education. The bills signed Monday are summarized here.

  • HB 17-1023“Concerning a Clarification of Procedures for Subpoenas for Deceptive Trade Practices,” by Reps. Tracy Kraft-Tharp & Cole Wist and Sens. Chris Holbert & Lois Court. The bill clarifies that the attorney general or a district attorney may issue a subpoena pursuant to C.R.C.P. 4 to a person whom he or she has reasonable cause to believe has engaged or is engaging in a deceptive trade practice in violation of Colorado statute.
  • HB 17-1039“Concerning Communication Issues Related to Restorative Justice,” by Rep. Pete Lee and Sen. Daniel Kagan. The bill allows the district attorney to consent to an assessment for suitability for participation in restorative justice practices, including victim-offender conferences, as part of a recommended sentence in a plea bargain.
  • HB 17-1041“Concerning Measures to Inform Students of Education Opportunities Leading to Jobs,” by Rep. Phil Covarrubias and Sen. Kevin Priola. The bill requires schools to inform students of military enlistment as a path to educational opportunities.
  • HB 17-1056“Concerning the Eligibility of a Veterans’ Service Organization to Accept Public Service Assignments Offered in Connection with Misdemeanor Sentencing,” by Rep. Michael Weissman and Sens. Bob Gardner & Andy Kefalas. The bill expands the criteria for organizations that may accept community or useful public service assignments to include veterans’ service organizations organized under 501(c)(4) or 501(c)(19) of the tax code, and specifies that the court or other entity making the assignment retains discretion to determine which organizations may be included in its program of community or useful public service.
  • HB 17-1061“Concerning Modification of the Class of Vehicles that is Subject to Regulation as Commercial Vehicles,” by Reps. Jon Becker & Jovan Melton and Sens. Nancy Todd & Ray Scott. The bill increases the minimum weight for classification as a commercial vehicle subject to the statutory and regulatory standards for commercial vehicles from 10,001 pounds to 16,001 pounds unless the vehicle is registered for use in interstate commerce.
  • HB 17-1093“Concerning an Increase in the Exemption for the Cash Surrender Value of Life Insurance,” by Rep. Kim Ransom and Sen. Daniel Kagan. The bill increases the exemption for cash surrender value of life insurance policies to $250,000.
  • HB 17-1096“Concerning Endowment Care Funds Administered for Cemetery Authorities,” by Rep. Larry Liston and Sen. Jim Smallwood. The bill authorizes the fiduciary of an endowment fund to distribute principal, such as capital gains, under a unitrust election.
  • HB 17-1135“Concerning the Portability of Employment Background Checks for a Child Care Worker who Works for the Same Common Ownership Entity,” by Rep. Jeff Bridges and Sen. Kevin Priola. The bill allows a child care worker who is employed in a licensed facility that is wholly owned, operated, and controlled by a common ownership group or school district to use a single completed fingerprint-based criminal history record check and a check of the records and reports of child abuse or neglect to satisfy the requirements of the necessary background checks if the employee also works for or transfers to another licensed facility.
  • HB 17-1142“Concerning Notices of Certain Court Proceedings,” by Rep. Dominique Jackson and Sen. Bob Gardner. The bill allows the clerk of the court to send notice by first-class mail or electronically using the e-filing system of the judicial department.
  • HB 17-1143“Concerning Audits of Correspondence Sent to Medicaid Clients,” by Rep. Lois Landgraf and Sen. Larry Crowder. The bill directs the Office of the State Auditor to conduct or cause to be conducted an audit of client correspondence, including letters and notices, sent to clients or potential clients in Medicaid programs.
  • SB 17-011“Concerning the Creation of a Technical Demonstration Forum to Study Solutions to Improve Transportation Access for People with Disabilities,” by Sen. Kent Lambert and Rep. Polly Lawrence. The bill creates a technical demonstration forum consisting of eight members to study and document how advanced technologies can improve transportation access for people with disabilities.
  • SB 17-041“Concerning Employment Contracts for Positions at Institutions of Higher Education that are Funded by Revenue Generated from Auxiliary Activities,” by Sen. Kevin Priola and Reps. Yeulin Willett & Edie Hooten. The bill exempts certain positions at institutions of higher education from limits for employment contract terms or amounts.
  • SB 17-060“Concerning Relocation of the Colorado Student Leaders Institute from the Office of the Lieutenant Governor to the Department of Higher Education, and, in Connection Therewith, Making and Reducing an Appropriation,” by Sen. Nancy Todd and Rep. James Wilson. The bill relocates the Colorado Student Leaders Institute to the Department of Higher Education with no changes to the program.
  • SB 17-077“Concerning the Eligibility of Certain Government Agencies to Apply for a Special Event Permit to Sell Alcohol Beverages,” by Sen. Cheri Jahn and Reps. Tracy Kraft-Tharp & Yeulin Willett. The bill authorizes certain agencies to obtain a special event permit to sell alcohol beverages for a limited period.
  • SB 17-109“Concerning the Use of Industrial Hemp in Products Designed for Consumption,” by Sen. Kerry Donovan and Rep. Jeni Arndt. The bill creates a group under the commissioner of agriculture to study the feasability of including hemp products in animal feed.
  • SB 17-196“Concerning the Improvement of the Department of Law’s Information Technology Security,” by Sen. Kevin Lundberg and Rep. Dave Young. The bill increases the appropriation to the Department of Law to improve the Department’s information technology security based on an external auditor’s recommendations.
  • SB 17-197“Concerning the Provision of Legal Services for the Department of Education in the 2016-17 State Fiscal Year,” by Sen. Kevin Lundberg and Rep. Dave Young. The bill increases the amount of reappropriated funds that are appropriated to the Department of Law for the purpose of providing additional legal services for the Department of Education.

For a list of the governor’s 2017 legislative actions, click here.

Colorado Court of Appeals: 42 U.S.C. § 1983 is Not State Employers’ Liability Law

The Colorado Court of Appeals issued its opinion in City of Lakewood v. Safety National Casualty Corp. on Thursday, March 9, 2017.

42 U.S.C. § 1983—Indemnification—Defense Costs—Insurance—Employer Liability Law.

A City of Lakewood (City) police officer was killed by friendly fire, and his widow filed a lawsuit under 42 U.S.C. § 1983, alleging that the City and various fellow officers had violated the deceased officer’s rights under the U.S. Constitution. The City sought indemnification for its own defense costs and those of the officers named in the lawsuit, which the City has an independent statutory duty to cover. The insurance company, Safety National Casualty Corporation, denied coverage. The district court concluded that a § 1983 claim did not arise under an employer liability law of any state and granted summary judgment for the insurance company.

On appeal, the City contended that the district court erred in granting summary judgment to the insurance company because the policy unambiguously covers all defense costs incurred by the City in connection with the § 1983 lawsuit. Specifically, the City argued that the § 1983 municipal liability claim must be covered by the employers’ liability portion of the policy because it is a claim based on work-related injuries that falls outside the ambit of the workers’ compensation laws. However, this overstates the scope of the coverage under the policy. By the policy’s plain terms, the common law claims must arise under the laws of Colorado or “other State(s).” Section 1983 is not a law of Colorado or any other state. Therefore, the City’s defense costs, which were sustained because of liability imposed as a result of the widow’s § 1983 claim, did not arise from a state workers’ compensation or employers’ liability law and were not covered by the policy.

Next, the City contended that it was entitled to reimbursement for amounts it paid to cover the fellow officers’ defense costs. The policy’s definition makes clear that the term “Employee” refers to the injured employee, not to an employee potentially responsible for the injury. “Loss” means payments by the City to the injured employee and the employee’s dependents. Therefore, the City’s indemnification payments to the officers named in the lawsuit do not qualify as losses under the policy and the City is not entitled to reimbursement from the insurance company.

The judgment was affirmed.

Summary provided courtesy of The Colorado Lawyer.

Tenth Circuit: Honest Belief Doctrine Allows Employee to Challenge Honesty of Employer’s Stated Reason for Termination

The Tenth Circuit Court of Appeals issued its opinion in Dewitt v. Southwestern Bell Telephone Company on Wednesday, January 18, 2017.

After her employment was terminated by Southwestern Bell Telephone Company (SWBTC) in 2010, Janna Dewitt filed a lawsuit against her former employer claiming unlawful discrimination and failure to accommodate her disability in violation of the American Disability Act, as well as a retaliation claim in violation of the Family Medical Leave Act (FMLA). The district court granted summary judgment in favor of SWBTC on all three claims, and Dewitt appealed.

Dewitt worked as a customer service representative in the call center of SWBTC. When Dewitt was hired she disclosed her diagnosis of Type I diabetes to her employer, who allowed her to take breaks as needed to eat and check her insulin levels. During Dewitt’s employment she took FMLA leave occasionally for health reasons, but generally avoided taking FMLA leave as it was looked upon unfavorably by SWBTC. After Dewitt violated SWBTC’s company policy for a second time by hanging up on two customers, SWBTC initiated a review and ultimately terminated Dewitt. Dewitt contends that she does not recall hanging up on the customers, as she was experiencing dangerously low blood sugar levels.

The court applied the burden-shifting framework first laid out in McDonnell-Douglas Corp. v. Green, which articulates a three-prong test for evaluating employment claims: (1) the claimant must show a prima facie case of retaliation or discrimination; (2) if the claimant presents a prima facie case, then if the employer can show a legitimate non-discriminatory reason for the action against the employee, the burden shifts back to the claimant to show that (3) there is a genuine issue of material fact as to if the employer’s reason for the action was merely pretext.

As to Dewitt’s first claim that SWBTC terminated her because of her disability, the court affirms the district court’s grant of summary judgment. The court looked to SWBTC’s process in evaluating the hang-ups, and stated that SWBTC’s termination was made based on their honest belief and in good faith due to Dewitt’s conduct, not because of her disability. Dewitt requests that the court decline to apply the honest belief doctrine, claiming that it “eviscerates the third prong of the McDonnell-Douglas test.” The court declines to do so, stating that the honest belief doctrine works to allow the employee to challenge the honesty of the employer’s stated reasoning for the action against the employee.

Next, Dewitt claims that SWBTC failed to accommodate her disability by not excusing the dropped phone calls. The court affirms the grant of summary judgment as to this claim as well, stating that an employer is not required to retroactively accommodate a disability where the employee has not previously requested an accommodation, and Dewitt never raised the concern prior to the incident with SWBTC that her diabetes could cause her to drop calls. The court added that the Equal Employment Opportunity Commission’s own guidance refutes Dewitt’s claim that her past conduct should be overlooked, as the guidance states “an employer is not required to excuse past misconduct even if it is the result of the individual’s disability.”

Finally, regarding Dewitt’s third claim of retaliation by SWBTC against her for taking FMLA leave, the court also affirms the district court’s grant of summary judgment in favor of SWBTC. The court held that because SWBTC offered a legitimate reason for terminating Dewitt, her hanging up on customers, Dewitt was required to show that this reason was mere pretext for firing her due to her disability. While Dewitt offered testimony that FMLA leave was discouraged and another supervisor disliked her, neither witness was involved in her actual termination. Therefore, the court determined that Dewitt’s evidence did not sufficiently establish a question as to if SWBTC’s stated reason for terminating her was merely pretext to terminate her employment due to her disability.

The court affirmed the district court’s grant of summary judgment on all three of Dewitt’s employment claims.

Colorado Supreme Court: Acknowledgment of Employer’s Vicarious Liability Bars Direct Negligence Claims Against Employer

The Colorado Supreme Court issued its opinion in In re Ferrer v. Okbamicael on Monday, February 27, 2017.

Tort—Respondeat Superior Liability—Direct Negligence.

In this original proceeding under C.A.R. 21, the Colorado Supreme Court reviewed trial court orders dismissing plaintiff’s direct negligence claims against an employer that acknowledged vicarious liability for its employee’s negligence, and denying plaintiff’s motion for leave to amend her complaint to add exemplary damages against the employer and the employee. The court adopted the rule articulated in McHaffie v. Bunch, 891 S.W.2d 19 822 (Mo. 1995), which held that an employer’s admission of vicarious liability for an employee’s negligence bars a plaintiff’s direct negligence claims against the employer. The court declined to adopt an exception to this rule where the plaintiff seeks exemplary damages against the employer. The court concluded that the trial court did not err in dismissing plaintiff’s direct negligence claims against the employer or in denying plaintiff’s motion for leave to amend the complaint to add exemplary damages. The court therefore affirmed the trial court orders and discharged the rule to show cause.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Economic Loss Rule Does Not Bar Civil Theft Claims

The Colorado Court of Appeals issued its opinion in Bermel v. BlueRadios, Inc. on Thursday, February 23, 2017.

Breach of Contract—Unjust Enrichment—Colorado Wage Protection Act—Civil Theft—Conversion—Economic Loss Rule—Attorney Fees.

Bermel entered into a “Contractor Agreement” with BlueRadios, Inc. under which he provided engineering services to BlueRadios. He also signed a “Proprietary Information and Inventions Agreement” (PIAA). The parties later ended their relationship. Anticipating that he might end up in litigation over unpaid wages, Bermel breached the PIAA by forwarding to his personal email account thousands of BlueRadios emails and attachments, some of which contained proprietary information. Bermel sent a demand letter to BlueRadios for unpaid wages, which BlueRadios paid. Bermel thereafter filed a lawsuit against BlueRadios asserting claims for breach of contract, unjust enrichment, and violation of the Colorado Wage Protection Act (CWPA). BlueRadios filed counterclaims against him, including breach of contract; civil theft, under C.R.S. § 18-4-405; and conversion. The court granted summary judgment in favor of BlueRadios on Bermel’s CWPA claim, and following trial, found Bermel liable on all of BlueRadios’ counterclaims.

On appeal, Bermel contended that the trial court erred when it denied his motion for summary judgment, in which he argued that the economic loss rule barred BlueRadios’ claim for civil theft. Because the economic loss rule is a judicial construct and a civil theft claim is a statutory cause of action, the economic loss rule does not preclude a cause of action under the civil theft statute.

Bermel also argued that the trial court erred in granting BlueRadios’ motion for summary judgment on his CWPA claim, contending that the court failed to apply the CWPA’s definition of “employee” when it concluded he was an independent contractor. The evidence attached to BlueRadios’ motion for summary judgment did not establish that Bermel was free from control and direction under his contract or that he was customarily engaged in an independent trade, occupation, profession, or business related to the service performed. Accordingly, BlueRadios failed to establish that no genuine dispute of material fact existed as to whether, under the parties’ contracts, Bermel was an employee for purposes of the CWPA.

Finally, BlueRadios was entitled to its appellate attorney fees under the civil theft statute.

The summary judgment on the CWPA claim was reversed, the judgment was otherwise affirmed, and the CWPA claim was remanded for further proceedings.

Summary provided courtesy of The Colorado Lawyer.

Colorado Court of Appeals: Fine to Employer for Workers’ Compensation Insurance Lapse Unconstitutional As Applied

The Colorado Court of Appeals issued its opinion in Dami Hospitality, LLC v. Industrial Claim Appeals Office on Thursday, February 23, 2017.

Dami Hospitality, LLC, operates a motel in Denver, Colorado. For a period in 2006, Dami failed to carry workers’ compensation insurance. It paid the $1,200 fine and obtained insurance. In 2014, the Division of Workers’ Compensation informed Dami that it was again without workers’ compensation insurance and had been for periods during 2006 and 2007, as well as from September 2010 through the date of the division’s notice. Dami admitted receiving the Division’s June 28, 2014, notice, but denied receiving a notice the Division contended it had mailed four months earlier. Dami obtained the necessary insurance by July 9, 2014, but did not otherwise respond to the Division’s letter.

The Division imposed a fine of $841,200 based on C.R.S. § 8-43-409(1)(b)(II) and 7 CCR 1101-3 (Rule 3-6). Dami’s owner, Soon Pak, sent a letter to the Director captioned “Petition to Review,” asking the Director to reconsider the fine. Ms. Pak claimed that she relied on her insurance agent to obtain the necessary insurance and believed the hotel’s insurance policies contained workers’ compensation coverage. She also asserted that the fine was more than her business grossed in a year and it would bankrupt both the hotel and her individually. Ms. Pak’s insurance agent also submitted a letter claiming personal responsibility for the lapse in coverage. In a supplemental order, the Director again ordered Dami to pay the fine, asserting that the previous lapse in coverage should have put Dami on notice as to the need for insurance.

Dami appealed to the Industrial Claim Appeals Panel, which ruled that the Director had failed to consider the factors in Associated Business Products v. Industrial Claim Appeals Office, 126 P.3d 323 (Colo. App. 2005), to protect against constitutionally excessive fines. On remand, without taking additional evidence, the Director reinstated his original fine, concluding that Rule 3-6 inherently incorporated the Associated Business Products factors. Dami again appealed, but this time ICAO upheld the Director’s order. Dami appealed to the Colorado Court of Appeals.

The court of appeals first considered whether Dami was deprived of procedural due process. Dami argued that notice by mail was unreasonable, and that a hearing should have been held before the fine was imposed. The court of appeals disagreed. Dami did not request a prehearing conference when it received the first notice of the lapse in insurance, and Dami did not show that the address the Division had on file was incorrect. Therefore, the court found that Dami was not denied procedural due process.

Dami next contended that the $841,200 fine was constitutionally excessive in violation of the Eighth Amendment. Dami argued that section 8-43-409 is unconstitutional on its face because the General Assembly removed a penalty cap in 2005 and failed to impose a statutory deadline for notice of missing insurance coverage, which therefore granted the Director “complete discretion regarding the timing of notice and thus the size of the fine.” The court of appeals found no facial constitutional error, noting that other penalty statutes have been upheld despite a lack of cap or statutory deadline.

However, the court of appeals agreed with Dami that the penalty was unconstitutional as applied because the Director abused his discretion in applying the Associated Business Products factors to Dami’s situation. Dami also argued that the fine is grossly disproportionate both to its ability to pay and to the harm caused by the lack of workers’ compensation insurance. It asserts the Director should also have considered its ability to pay when weighing the constitutionality of the fine. The court of appeals again agreed that the fine was unconstitutional as applied.

The court of appeals evaluated whether Eighth Amendment protections apply to corporations, and determined that Dami’s status as a corporation did not deprive it of Eighth Amendment protections. The court cited Citizens United for the premise that individual constitutional protections can apply to corporations.

Evaluating the particular fine, the court of appeals determined that the Director abused his discretion in imposing the fine because he did not make specific findings regarding the Associated Business Products factors. The court of appeals found that the uncontroverted facts put Dami at the low end of the reprehensibility scale, since Ms. Pak relied on her insurance agent to supply all necessary insurance coverage and the agent admitted he had not informed Ms. Pak about workers’ compensation insurance. The court also found that because Dami had not had a single workers’ compensation claim in its existence and it had fewer than ten employees, there was no actual harm from Dami’s lack of workers’ compensation insurance and low risk of potential harm. The court noted that the record lacked any evidence of comparable fines because the Division failed to supply it, but the information Dami supplied showed that in FY 2006-2007 the total amount of fines for failure to carry insurance “would be $200,000.” The court of appeals also recognized that the Director should have considered Dami’s ability to pay before imposing the fine.

The court of appeals remanded for reconsideration of the excessive fine in light of the Associated Business Products factors.

Colorado Supreme Court: No Personal Jurisdiction Over Out-of-State Employer in Workers’ Comp Case

The Colorado Supreme Court issued its opinion in Youngquist v. Miner on Tuesday, February 21, 2017.

Workers’ Compensation—Personal Jurisdiction—Specific Jurisdiction.

In this case, the Colorado Supreme Court considered whether Colorado has jurisdiction to award benefits for out-of-state work-related injuries and impose a statutory penalty on an employer under C.R.S. § 8-41-204 when the employer is not a citizen of Colorado and has no offices or operations in Colorado but hired a Colorado citizen within the state. The court concluded that under the facts of this case, Colorado lacks personal jurisdiction over the employer and therefore the employer cannot be subject to the Workers’ Compensation Act of Colorado, C.R.S. §§ 8-40-101 to 8-47-209. Accordingly, the court reversed the judgment of the court of appeals.

Summary provided courtesy of The Colorado Lawyer.

SB 17-055: Prohibiting Employers from Mandating Labor Organization Membership

On January 13, 2017, Sen. Tim Neville and Rep. Justin Everett introduced SB 17-055, “Concerning the Prohibition of Discrimination Against Employees Based on Labor Union Participation.”

The bill prohibits an employer from requiring any person, as a condition of employment, to become or remain a member of a labor organization or to pay dues, fees, or other assessments to a labor organization or to a charity organization or other third party in lieu of the labor organization. Any agreement that violates these prohibitions or the rights of an employee is void.

The bill creates civil and criminal penalties for violations and authorizes the attorney general and the district attorney in each judicial district to investigate alleged violations and take action against a person believed to be in violation. The bill states that all-union agreements are unfair labor practices.

The bill was introduced in the Senate and assigned to the Business, Labor, & Technology Committee. It is scheduled for hearing in committee on February 6 at 2 p.m.

HB 17-1119: Providing a Workers’ Compensation Payment Mechanism for Uninsured Employers

On January 20, 2017, Reps. Tracy Kraft-Tharp & Lang Sias and Sens. Jake Tate & Cheri Jahn introduced HB 17-1119, “Concerning the Payment of Workers’ Compensation Benefits to Injured Employees of Uninsured Employers.”

The bill creates the ‘Colorado Uninsured Employer Act’ to create a new mechanism for the payment of covered claims to workers who are injured while employed by employers who do not carry workers’ compensation insurance. The bill creates the Colorado uninsured employer fund, which consists of penalties from employers who do not carry workers’ compensation insurance.

The bill creates the uninsured employer board to establish the criteria for the payment of benefits, to set rates, to adjust claims, and to adopt rules. The board is required to adopt, by rule, a plan of operation to administer the fund and to institute procedures to collect money due to the fund.

The bill was introduced in the House and assigned to the Business Affairs and Labor Committee.

HB 17-1029: Allowing Records Custodians to Deny Access to Confidential Personal Information

On January 11, 2017, Rep. Polly Lawrence and Sen. Bob Gardner introduced HB 17-1029, “Concerning Public Records that are Subject to Denial of Inspection.”

The bill allows a custodian to deny access to confidential personal information records and employee personal e-mail addresses. The provisions of the ‘Colorado Open Records Act’ that relate to civil or administrative investigations and trade secrets and other privileged and confidential information apply to the judicial branch.

The bill was introduced in the House and assigned to the State, Veterans, and Military Affairs Committee. It is scheduled to be heard in committee on February 2 upon adjournment.

HB 17-1013: Concerning the Free Exercise of Religion

On January 11, 2017, Reps. Stephen Humphrey & Dave Williams and Sens. Tim Neville & Vicki Marble introduced HB 17-1013, “Concerning a Person’s Free Exercise of Religion.”

The bill:

  • Specifies that no state action may burden a person’s exercise of religion, even if the burden results from a rule of general applicability, unless it is demonstrated that applying the burden to a person’s exercise of religion is essential to further a compelling governmental interest and the least restrictive means of furthering that compelling governmental interest;
  • Defines ‘exercise of religion’ as the practice or observance of religion. The bill specifies that exercise of religion includes the ability to act or refuse to act in a manner substantially motivated by a person’s sincerely held religious beliefs, whether or not the exercise is compulsory or central to a larger system of religious belief; except that it does not include the ability to act or refuse to act based on race or ethnicity.
  • Provides a claim or defense to a person whose exercise of religion is burdened by state action; and
  • Specifies that nothing in the bill creates any rights by an employee against an employer unless the employer is a government employer.

The bill was introduced in the House and assigned to the State, Veterans, and Military Affairs Committee. It is scheduled to be heard in committee on January 25, 2017 at 1:30 p.m.