DENVER – In the name of civil rights, Democrat Senators passed a bill Friday that would make small businesses vulnerable to paying enormous attorney fees to defend discrimination lawsuits – even those deemed frivolous.
The bill now goes to Gov. John Hickenlooper who will either uphold his promise to create jobs and improve the state’s economy and veto the measure – or renege by signing it into law.
Opponents of the measure declared it hypocritical after legislators and Gov. John Hickenlooper won elections on a “jobs, jobs, jobs” mantra in recent years when Coloradans were hit hard by the recession.
This measure, opponents argued, will deter small businesses from hiring new employees and puts yet another Colorado “unwelcome” sign to new entrepreneurs from outside of the state.
Hickenlooper could quash the measure, but his veto could be overturned by the Democrat- controlled legislature.
Democrat sponsors of House Bill 1136, Sens. Morgan Carroll of Aurora and Lucia Guzman of Denver with Reps. Claire Levy of Boulder and Joe Salazar of Thornton, contend the bill is courageous and fair because it expands the federal Civil Rights Act to include small businesses with 14 or fewer employees.
Sen. Steve King (R-Grand Junction) said that a minority owner of a small business called Friday and complained that the bill that would increase his annual insurance premium from $2,000 to $3,500 to cover potential lawsuit liabilities. The minority owner said the company is just recovering after losing $44,000 last year in this recession.
The business owner questioned the “hypocrisy” of the governor and legislators promising to eliminate bureaucratic red tape and overbearing regulations, said King, who was chastised by Democrat Senators for talking about the bill’s negative impact on minority business owners.
“According to our Governor, heck, we just want to get out of the way of small business and let you go do what you do,” said King, recalling Hickenlooper’s campaign statements echoed in his State of the State address.
But Sen. Evie Hudak (D-Westminster) countered, “If small businesses are not allowing any discrimination, then they have nothing to fear, nothing to fear from this bill.”
“My colleagues, who are concerned that this is going to crush small businesses, are you suggesting to them that they all discriminate (against employees)?” asked Hudak of Republican Senators. “That is abhorrent if that is the case.”
House Bill 1136, The Jobs Protection Rights Act of 2013, passed on a 19 – 16 vote. Democrat Sen. Cheri Jahn of Wheatridge joined Republican Senators in voting against the measure.
If signed into law, the bill would allow employees to sue their employers for discrimination and harassment in the workplace, and add protections for those 70 years and older as well as those who are lesbian, gay, bisexual or transgender.
The bill applies to businesses with 14 or fewer employees, which the bill’s sponsors said closes a “loophole” in the federal Civil Rights Act that applies to businesses with 15 or more employees. The bill expressly exempts state and local governments and their agencies from the bill.
Small businesses would have to spend a more than $100,000 on attorney fees at an hourly rate to defend themselves – and if found guilty, pay punitive and compensatory damages plus the plaintiff’s legal costs which are usually based on contingent fees. Those costs could exceed $250,000.
If the complaint is deemed frivolous or unfounded, the small business would win but at a hefty price. Unlike other civil cases, the small business defendant could not recoup attorney fees in a judgment against the plaintiff.
Democrat supporters argued the bill caps punitive damages at $10,000 for an employer of four or fewer employees, and $25,000 for an employer of five to 14 employees. The bill does not address the costs of the business’s defense attorney fees as well as other liabilities if the case is lost.
Sen. Michael Johnston (D-Denver) argued against the opposition by lampooning the Bill of Rights with a litany of exceptions to the rights “if you work for a company of 15 employees or less.”
“Congress shall make no law respecting the establishment of religion unless you work for a company of 15 employees or less,” said Johnston. “…Congress shall make no law respecting your right to privacy or preventing people from breaking into your house and coming to seize your belongings unless you work for a company of 15 employees or less.”
“Or how about this one, maybe the 13th Amendment, neither slavery or servitude except as a punishment for crime, ought to be allowed unless you work for a business of 15 members or less?” asked Johnston.
Apparently Johnston had not read the Democrat-sponsored Civil Rights bill before the Senate that only applied to small businesses with 14 or fewer employees.
Republican Senators offered about 50 amendments during Second Reading on Thursday to give small business employers equity in the bill, but Democrats rejected them.
The bill’s Democrat sponsors claimed it was “embarrassing” that Colorado is one of eight states without this civil rights protection for employees of small businesses.
But, Sen. Kevin Lundberg (R-Berthoud) researched the 42 states that purportedly have expanded civil rights penalties and found that most had exempted small businesses, did not impose punitive damages or leave them with no legal remedy for their defense attorney costs.
“This legislation is the most extreme,” declared Lundberg. It not only threatens the viability of small businesses, “it is a curse upon employees looking for a job.”