Colorado, like most other jurisdictions, has seen an explosion in employment related claims in the last decade. Following the enactment of the Civil Rights Act of 1991, access to the courts and the damages available in employment actions increased substantially. As a result, more carriers are writing employment related practices liability policies which provide coverage for claims that would have been unimaginable a decade ago.

Employment claims run the full spectrum from discrimination and harassment to claims premised on alleged violations of the Fair Labor Standards Act. The most frequent claims involve alleged violations of the following federal statutes:

• Title VII of the Civil Rights Act of 1964 prohibiting discrimination in employment on the basis of race, religion, sex, national origin, creed, or pregnancy status for all employers having at least 15 employees.
• The Age Discrimination in Employment Act (ADEA) prohibits discrimination on the basis of age against those individuals over the age of 40. The ADEA applies to employers having at least 20 employees.
• The Americans with Disabilities Act (ADA) prohibits discrimination on the basis of handicap or disability for employers having at least 15 employees.
• The Family and Medical Leave Act of 1993 (FMLA) requires employers with at least 50 employees to provide up to 12 weeks of unpaid leave for certain qualifying medical conditions including pregnancy.
• The Equal Pay Act which requires employers to pay female employees the same as male employees for the same type of work.

In addition to these federal statutes, Colorado has its own anti-discrimination act which applies to all employers having two or more employees and prohibits discrimination in a manner similar to Title VII, though with more limited remedies.

Although Colorado courts will presume that an employment relationship is “at will” (one in which both the employee and the employer have the right to terminate the employment relationship at any time), there are a number of exceptions to this rule. These exceptions result in frequent claims for wrongful termination and other related claims, including allegations of breach of express or implied contracts, breach of an express or implied covenant of good faith and fair dealing, claims of promissory estoppel, and claims that termination was in violation of public policy, i.e. a statute or regulation. Other claims frequently seen in the employment setting include claims for outrageous conduct, defamation, interference with contractual relations, fraudulent inducement or negligent misrepresentation, invasion of privacy, negligent supervision, termination or investigation and retaliation for participating in such protected activities as assisting in a sexual harassment investigation or pursuing a worker’s compensation claim.

Many of these claims entitle a claimant to a jury trial and, although non-economic damages are frequently capped depending on the size of the employer, economic loss claims in these cases can be extremely high. In addition to compensatory damages, a prevailing plaintiff is typically able to recover reasonable costs and attorney’s fees and equitable relief such as reinstatement by his or her employer.

The interrelationship of these laws can be confusing. It is generally recommended that counsel be involved as soon as a claim is made or an administrative charge of discrimination is filed with either the state Civil Rights Division (CCRD) or the federal Equal Employment Opportunity Commission (EEOC). The employer’s response at this initial stage can be extremely important.

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You should consult an attorney for individual advice regarding your own situation.
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