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Unpacking Colorado’s POWR Act for Enhanced Employee Protections

    The Protecting Opportunities and Workers’ Rights (POWR) Act, signed by Gov. Jared Polis in June 2023, has kicked into action, bringing significant changes to employee protections in the state. The act, effective from August 7, 2023, introduces various provisions that impact nondisclosure agreements, workplace harassment claims, record-keeping requirements, and even adds marital status as a protected category. Let’s dive into the key aspects of this new legislation.

    1. Limitations on Nondisclosure Agreements: The POWR Act is all about promoting transparency and discouraging interference with employees’ ability to report discriminatory or unfair employment practices. To achieve this, the act puts constraints on nondisclosure agreements made or renewed after August 7, 2023. These agreements can’t restrict employees from disclosing or discussing alleged discriminatory practices unless certain conditions are met. These conditions include equal application to both employer and employee, explicit exceptions for disclosure to specific individuals or entities, and provisions preventing employers from enforcing nondisparagement clauses if they engage in disparagement.

    Violating these requirements can result in significant penalties, including liability for damages and a $5,000 penalty per violation. Employees presented with non-compliant agreements can take immediate legal action, potentially claiming penalties, damages, costs, attorneys’ fees, and even punitive damages.

    2. Lowered Standard for Workplace Harassment: The act shifts the standard for proving workplace harassment from the traditional “severe or pervasive” to a lower threshold. Now, conduct or communication qualifies as harassment if it is subjectively offensive to the person alleging it and objectively offensive to a reasonable individual in the same protected class. Even a single incident may constitute harassment, and the act recognizes that previously welcomed conduct may become unwelcome.

    The act outlines specific requirements for conduct to be considered illegal harassment, such as being made a term or condition of employment, being a basis for employment decisions, or unreasonably interfering with work performance.

    3. Limitations on Affirmative Defenses to Harassment Claims: Employers are now limited in their ability to assert affirmative defenses against harassment claims by supervisors. To use such a defense, employers must show they had a program in place to prevent harassment, communicated it to employees, and the claimant unreasonably failed to take advantage of the program. This includes prompt and reasonable action in investigating and addressing alleged harassment.

    4. New Record-Keeping Requirements: The POWR Act imposes new record-keeping obligations on employers, requiring them to preserve personnel or employment records for at least five years. This includes requests for accommodation, employee complaints, application forms, and various records related to employment terms and conditions. Employers must also maintain a designated repository for all discrimination or unfair employment practice complaints, detailing the date, parties involved, and substance of the complaint.

    5. Marital Status as a Protected Class and Modified Disability Discrimination Framework: The act broadens anti-discrimination laws by adding marital status as a protected category. Additionally, the framework for disability discrimination has been modified, aligning with the federal Americans with Disabilities Act standard. Now, adverse actions against an individual with a disability are not considered discriminatory if there’s no reasonable accommodation possible to allow the person to perform the essential job functions.

    Next Steps for Employers: Colorado employers are urged to take proactive steps in response to the POWR Act:

    1. Review and Revise Agreements: Ensure compliance with the new limitations on nondisclosure agreements.
    2. Update Policies: Align policies with the revised standards set by the act.
    3. Employee Training: Educate HR staff and management on the updated policies and standards.
    4. Record-Keeping Compliance: Review and adjust document retention policies to meet the new record-keeping requirements.
    5. Reasonable Accommodation: If applicable, reassess reasonable accommodation processes in light of the modified disability discrimination framework.

    This legislative overhaul emphasizes Colorado’s commitment to safeguarding workers’ rights and promoting transparency in the workplace. Employers need to stay informed and adapt to these changes to ensure compliance and maintain a fair and respectful work environment. If there are lingering questions or uncertainties about the new law, reaching out to legal experts in employment law, like Cooley’s employment group, could provide valuable guidance.