Tag Archives: Holland & Hart

May 12, 2014

Independent Contractor Status Dependent On More Than One Factor, Says Second Colorado Court

A second division of the Colorado Court of Appeals has just rejected a stringent, single-factor test for determining whether a worker is an employee or independent contractor for purposes of receiving unemployment insurance benefits. On May 8, 2014, a division of the Court of Appeals issued a decision in an unemployment insurance tax liability case, rejecting longstanding case law holding that a worker is an employee, and thus entitled to unemployment insurance benefits, unless he “actually and customarily provides similar services to others while working for the putative employer.” Visible Voices, Inc. v. ICAO, 2014 COA 63.

For years, the Colorado Division of Employment and Training has rejected claims that workers are independent contractors, and thus ineligible for unemployment insurance benefits, based solely upon the fact that they do not provide similar services to others while working for the putative employer. It has not mattered whether the workers were directed or controlled by the putative employer, whether they maintained separate business entities, whether they set their own hours, whether they were trained by the putative employer, whether they were paid an hourly or fixed rate, whether they provided their own equipment, whether they had their own offices, or whether they advertised their own businesses. If they did not provide similar services to others while working for the putative employer, they were almost always deemed to be employees for purposes of receiving unemployment insurance benefits.

In rejecting this stringent, single-factor test, the Visible Voices court followed the 2012 lead of another division of the Colorado Court of Appeals in Softrock Geological Servs. v. ICAO, 2012 COA 97 (cert. granted Mar. 25, 2013). First breaking with the decades-old, single-factor assessment, the Softrock court held that the Division of Employment and Training must instead apply a multi-factor test to determine whether an individual “is customarily engaged in an independent trade, occupation, or business related to the service performed.” This multi-factor test considers factors set forth in Colorado statute.

While broadly adopting the Softrock court’s reasoning, the Visible Voices court went even further, holding that factors not listed in the Colorado statute may also be considered in assessing independent contractor status. The Visible Voices court further noted that some of the statutory factors might also not be relevant to a particular worker depending on the circumstances. In short, the Visible Voices court concluded that virtually any relevant circumstances may be considered when weighing independent contractor status, and rejected the argument that the multi-factor test is limited to just those factors specifically delineated in statute.

By choosing to consider multiple factors, the Visible Voices court expressly declined to follow Western Logistics, Inc. v. ICAO, 2012 COA 186 (cert. granted Mar. 25, 2013), in which yet another division of the Colorado Court of Appeals recently reaffirmed the decades-old cases effectively mandating a single-factor test. Unlike the Western Logistics court, the Visible Voices and Softrock courts have decided that no single factor is determinative of independent contractor status.

Two divisions of the Colorado Court of Appeals have now rejected the single-factor test that has long stymied putative employers’ attempts to prove that their workers are independent contractors for purposes of unemployment insurance benefits. However, the Colorado Supreme Court will have the last word on the proper test for determining independent contractor status as it is currently reviewing both the Softrock and Western Logistics cases. The Supreme Court heard oral arguments in both cases on March 6, 2014 (audio of the oral arguments may be accessed here), and a decision is expected in the coming months. Based on the oral arguments, a favorable ruling for putative employers seems possible. We will let you know the outcome as soon as the Supreme Court rules on this issue.

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May 9, 2014

Colorado Legislative Wrap-Up: Wage Theft, Disability Definition and Workers’ Comp Physician Choice Bills Pass

By Emily Hobbs-Wright

The Colorado General Assembly wrapped up its 2014 Legislative Session this week, passing a number of bills that change the landscape for Colorado employers. Here is a look at the significant employment-related bills that passed and are expected to be signed into law by Governor Hickenlooper as well as other bills that were introduced but did not make it through the legislative process.

Bills that Passed This Session.

Wage Protection Act of 2014. Senate Bill 14-005 establishes an administrative procedure to adjudicate wage claims under Colorado law. For wages and compensation earned on or after January 1, 2015, the Colorado Division of Labor may receive complaints and adjudicate claims for nonpayment of wages or compensation of $7,500 or less. The written demand for unpaid wages to the employer may come from or on behalf of the employee and is satisfied if a notice of complaint filed with the Division is sent to the employer. In addition to existing fines that may be levied against employers who fail to pay wages, the new law allows the Director of the Division of Labor or a hearing officer to impose a fine of $250 on an employer who fails to respond to a notice of complaint or any other notice from the Division when a response is required. All fines collected will be credited to the State Wage Theft Enforcement Fund to be used for enforcement of this law.

The Wage Protection Act also requires Colorado employers to keep payroll records, including the information contained in an employee’s itemized pay statement, for at least 3 years after payment of wages and to make such records available to the employee and the Division of Labor. (C.R.S. §8-4-103 (4.5)). Employers who violate this record retention requirement are subject to a fine of $250 per employee per month, up to a maximum fine of $7,500.

This new law also provides for the recovery of reasonable attorney fees and court costs for an employee who recovers unpaid wages under Colorado’s minimum wage requirement. Additionally, the new law sets forth procedural requirements for employers responding to a demand for payment and procedures for resolving wage disputes through the administrative procedure. The majority of the new provisions in this law go into effect on January 1, 2015.

Definition of Disabled Individuals Aligned with Americans With Disabilities Act. Senate Bill 14-118 conforms state law definitions of a disability to match definitions under the federal Americans with Disabilities Act (ADA). Specifically, the terms “disability” and “qualified individual with a disability” under Colorado Revised Statute section 24-34-301 are given the same meaning as under the ADA. This bill also moves the definition of “sexual orientation” out of the Employment Practices definition section (C.R.S. § 24-34-401) and into the general definition section for the Civil Rights Division (C.R.S. § 24-34-301.) It also changes the term “assistance dog” to “service animal” and provides additional penalties for violations of the rights of an individual with a disability who uses a service animal and for persons who cause harm to service animals. The law also expanded the available remedies for retaliation and violations of the fair housing and public accommodations discrimination prohibitions. Once signed into law by the Governor, these provisions will go into effect on August 6, 2014.

Expanded Doctor Choice for Workers’ Compensation. House Bill 14-1383 changes the Colorado workers’ compensation law to allow injured workers more choice of doctors. Currently, an employer or workers’ compensation insurer must provide a list of at least 2 physicians or corporate medical providers from which an injured employee may select a treating physician. This bill expands that number to 4. There are additional provisions related to the location and shared ownership status of the health care providers. After signed into law by the Governor, this law will become effective on April 1, 2015.

Clarification of Credit Report Restriction Allowing Employment Use By Financial Institutions. Senate Bill 14-102 amends last year’s Employment Opportunity Act which restricts an employer’s use of credit reports. This amendment clarifies that all positions at a bank or financial institution are jobs for which credit information is deemed to be “substantially related to the employee’s current or potential job.” As a result, financial institutions will be able to obtain and use credit information on employees and applicants when making employment decisions for all job positions. Governor Hickenlooper signed this bill into law on March 27, 2014 and it became effective immediately.

Bills that Failed to Pass This Session.

Paid Sick Leave. Called the Family and Medical Leave Insurance Act (FAMLI), Senate Bill 14-196 sought to create an insurance program to provide pay to employees who take unpaid FMLA or sick leave. The program would be paid for by employees who pay premiums into a “fund” in the state treasury; employers would not be funding it. Eligible employees would be able to receive a percentage of their pay while on leave, not to exceed $1,000 per week. The bill would have prohibited Colorado employers from discharging, discriminating or retaliating against employees who seek to use benefits under the program or assist in a related-proceeding. Advocated by the Colorado chapter of 9 to 5, this bill, introduced on April 15th, differed from previous paid sick leave bills as it did not require employers to fund the program. On May 1, this bill was postponed indefinitely in committee and therefore, did not make it to a vote.

Drug Testing Misdemeanor. House Bill 14-1040 would have established a drug misdemeanor for an employee who is legally required to undergo drug testing as a condition of his or her job and either tests positive for a controlled substance without a prescription, or knowingly defrauds the administration of the drug test by an employer. To “defraud the administration of a drug test” is defined in the bill to include submitting a sample from someone else or a sample collected at a different time or some other conduct intended to produce a false or misleading outcome. This bill passed the House but the Senate sent it to committee where it was postponed indefinitely.

Anti-Union Bills. – House Bills 14-1087 would have prohibited collective bargaining for the state’s public employees. House Bill 14-1098 and Senate Bill 14-113 would have prohibited employers from entering into agreements to require employees to join a union. All three bills failed shortly after introduction as expected due to the democratic majority in both chambers of Colorado’s legislature.

The bills that passed in the 2014 Legislative Session reflect a continued trend at the state level to implement new or refine existing employment-related laws. We will keep you posted on any further developments.

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May 6, 2014

Separation Agreements Targeted By EEOC Again

By Mark Wiletsky

The Equal Employment Opportunity Commission (EEOC) recently filed a lawsuit seeking to stop a Colorado employer from using its form separation and release agreement and to allow employees who have signed the form agreement to file charges of discrimination and participate in EEOC and state agency fair employment investigations. In its federal court complaint, the EEOC alleges that CollegeAmerica Denver violated the Age Discrimination in Employment Act (ADEA) by conditioning employees’ receipt of severance benefits on signing a separation and release agreement which, according to the EEOC, chills and interferes with the employees’ rights to file charges and/or cooperate with the EEOC and state fair employment practice agencies.

As we wrote on this blog earlier, the EEOC has been scrutinizing employers’ separation agreements. This is the second such lawsuit challenging language in the separation agreements that does not permit the filing of discrimination or retaliation charges with the EEOC or other government agencies. As in the EEOC’s earlier complaint against a national pharmacy, the recent complaint against CollegeAmerica Denver targets numerous provisions in the separation agreement, including the release of claims, a non-disparagement clause and provisions in which the employee represents that he/she has not filed any claims, has disclosed to the company all matters of non-compliance and will continue to cooperate with and assist the company with any investigation or litigation.

Many of the targeted provisions are standard clauses in form separation agreements. Although it remains to be seen whether the courts will agree with the EEOC’s claims, it is always a good idea for organizations to review their agreements and ensure they do not raise any red flags for the EEOC while still protecting the company from future payouts for employment-related claims. We will continue to provide updates as new developments arise.

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June 22, 2012

NLRB’s New Website

The U.S. Department of Labor received much fanfare when it rolled out its new timesheet app. In its news release of 2011 (http://www.dol.gov/opa/media/press/whd/WHD20110686.htm), DOL indicated that it believed the application would ensure that workers received the wages to which they were entitled.

Not to be outdone, although not as an application, the National Labor Relations Board announced that it has launched a new interactive website to describe the rights of employees to engage in protected concerted activity under Section 7 of the National Labor Relations Act. The webpage can be found at: http://www.nlrb.gov/concerted-activity.

You will see that the NLRB details numerous case examples where it found the conduct of employers to violate the act. The interactive map serves to lead the reader to the detail of a case that provides factual detail about the violation. This is just another example of how the social media network can be used as a public relations effort to justify an agency's public purpose and to inform employees of their rights.

For more information on the NLRB or other traditional labor relations questions, feel free to send a comment or reach me directly.

Steven M. Gutierrez

June 7, 2012

Last-Chance Agreements — Employer beware!

The EEOC, in its recent press release (http://www.eeoc.gov/eeoc/newsroom/release/5-29-12.cfm) of May 29, 2012, announces a rare victory on summary judgment in what could be a bad trend for employers. In the underlying case of EEOC v. Cognis Corporation, a foreign multinational corporation, the federal judge ruled that the company retaliated against an employee for refusing to waive his rights to file a discrimination charge, both for past conduct and prospective conduct.

The employee, as a condition of continued employment, was asked to sign a last-chance agreement that prohibited him from filing a discrimination charge. According to the EEOC, Cognis conditioned the employment on the execution of the last chance agreement and when the employee refused to be bound by that agreement he was fired. As the Court noted in its opinion, it is not often that an employee is granted summary judgment on a Title VII retaliation claim.

The outcome here is problematic for two reasons. First, in most cases there is often a fact issue over the stated motivation for the adverse action taken by the employer because the motivation for the underlying decision is almost always in dispute; thus, there is a necessary question of fact that would defeat a summary judgment. Second, the Court’s willingness to discount the fact that had the employee not executed the last-chance agreement in the first instance he would have been terminated for a legitimate and non-discriminatory reason – poor performance – is worrisome. In rejecting Cognis’s argument on this point, the Court reasoned that even if it credited Cognis’s argument; it was the employee’s revocation of the last-chance agreement that constituted an adverse action, an act that might dissuade a reasonable worker from making or supporting a charge of discrimination. (See Opinion). This reasoning, of course, doesn’t adequately address the fact that the worker essentially was given consideration to remain employed under the last-change agreement.

What is clear from the Court holding in Cognis is the fact that the last-chance agreement is said to have threatened termination for undertaking future protected activity, which the Court says satisfies one element of the prima facie case of retaliation – a preemptive retaliatory act. Now, all that remains for the Court is a determination of damages. If the Cognis last-chance agreement had not included this prospective provision, I wonder how the case would have turned.

This holding is sure to motivate the EEOC to seek out similar cases of this kind. The EEOC concludes its release by indicating that “[f]iling EEOC charges is a fundamental right of American employees, and this agency always stands ready to protect that right.” EEOC’s Chicago District Director John Rowe further states, “This court’s opinion should cause employers to remember that seeking to dissuade employees from exercising that right is not only bad policy, it’s a violation of federal law which can give rise to very substantial liability.”

Despite the Court’s finding and the threats by the EEOC, this author maintains that narrowly crafted last-chance agreements are often useful to employers, both to ensure employees understand that future satisfactory performance is demanded and to give the employee fair opportunity to improve his/her conduct.

For more information contact Steven M. Gutierrez.

May 15, 2012

National Labor Relations Board Election Rule Invalidated

A federal judge has invalidated the "ambush election" rule by the National Labor Relations Board ("NLRB"). Brian Mumaugh and Brad Williams summarized the decision by Judge James E. Boasberg of the United States District Court for the District of Columbia and its impact on employers in a post, which is available on Holland & Hart's website by clicking here.

April 17, 2012

NLRB Notice-Posting Requirement Indefinitely Postponed

Brian M. Mumaugh and Bradford J. Williams have been following the recent developments regarding the rule by the National Labor Relations Board, which required most employers to post a statement of rights under the National Labor Relations Act. Today the D.C. Circuit granted an emergency motion for relief, which had the effect of enjoining enforcement of the rule. More information about the D.C. Circuit's ruling and its effect on employers is available by visiting the Colorado Employment Law Blog or clicking here.

March 23, 2012

Hiring and Social Media: Beware

By Mark Wiletsky

Should you require prospective employees to provide you with access to their Facebook page and other social media accounts, as a condition of being considered for the job? Some public agencies apparently are doing so. But Richard Blumenthal, a Democratic senator from Connecticut, is writing a bill to prohibit the practice. (Not surprisingly, you can find more information about his proposed bill by visiting his Facebook page: http://www.facebook.com/dickblumenthal). Relying on social media for hiring decisions can be risky, but it happens. People Google a candidate’s name, check LinkedIn profiles, browse a Facebook page, or surf the web to see if they can learn some information about the candidate. It’s so easy to do, and there is so much information about people on the web that it is hard to resist. The problem is that the information on the Internet may or may not be relevant to the job. The information also might disclose protected characteristics that you would not otherwise know from simply reviewing a job application (e.g., a person’s race, a disability, etc.). My own thought is that for most private employers, it is not a good idea to require candidates to turn over passwords to their social media accounts. Regardless of whether the candidate agrees to do so, it is clearly not a voluntary decision, and it raises a host of potential problems for private employers, beyond even the typical problem of not hiring someone due to a protected characteristic, e.g., what happens if someone at the company loses the password, abuses it, or protects it but is later accused of being responsible for hacking into the account? The law in this area continues to evolve, but I would avoid becoming a “test case” for having gone too far.

February 23, 2012

EEOC’s New Strategic Plan

Wow! The U.S. Equal Employment Opportunity Commission approved a new strategic plan on February 22, 2012.

In summary, the four-year strategic plan, adopted by a 4-1 vote, will focus on efforts to stop and remedy unlawful employment discrimination as a core mission. Commissioner Constance Barker noted that the plan’s focus will emphasize enforcement and litigation rather than education and outreach, which she believed was contrary to the EEOC’s legislative focus.

Perhaps the most dangerous component of the new plan will be the EEOC objective to increase the number of systemic discrimination cases it handles. These cases are focused on pattern or practice, policy, or class cases where the alleged discrimination has a broad impact on an industry. Systemic cases are also exceedingly expensive to defend. The EEOC will work over the next months to create the framework to “inform, justify and support the quantitative and qualitative performance measures throughout the plan.”

Fasten your seatbelts, it's going to be a bumpy night!

You can find the announcement at: http://www.eeoc.gov/eeoc/newsroom/release/2-22-12.cfm

For more information, contact Steven M. Gutierrez.

October 6, 2011

NLRB Postpones Posting Rule

Good news. The NLRB (National Labor Relations Board) has postponed the effective date on the private business posting rule that informs workers about their right to form a union. The Board indicated on Wednesday that there has been too much confusion over which business are covered under the rule. For a good summary of the posting rule from my partner Jeff Johnson click on this link: http://www.hollandhart.com/newsitem.cfm?ID=1873

For more information, feel free to reach out.

Steven M. Gutierrez