NOTE: THIS IS THE SECOND IN A SERIES OF CLIENT ALERTS OUTLINING RECENT CHANGES TO COLORADO'S EMPLOYMENT LAWS, MOST OF WHICH TAKE EFFECT AUG. 10.
Throughout the 2022 Colorado legislative session, the General Assembly enacted numerous laws impacting the landscape of employment law within the state. Notably, two laws expand protections for whistleblowers and threaten hefty damages for employers that run afoul of them. Senate Bill 22-097, labeled “Whistleblower Protection Health and Safety,” and House Bill 22-1119, the Colorado False Claims Act (the “CFCA”), both confer sweeping protections to employees who raise protected concerns about their employer and face subsequent adverse employment actions
HEALTH AND SAFETY WHISTLEBLOWER AMENDMENTS TO PHEW
SB 22-097 expands the “Public Health Emergency Whistleblower” law, or PHEW, which was originally enacted in 2020 during the COVID-19 pandemic. PHEW covers employers with five or more employees or independent contractors and gives workers (including contractors) the right to express concerns regarding workplace health or safety violations during a public health emergency and to be free from retaliation. The amendments, which became effective May 31, 2022, expand these statutory protections to workers (including contractors) who raise health- or safety-related complaints, not just about COVID-19 or other public health emergencies, but for all workplace health and safety situations. Indeed, although Colorado has not traditionally had a state-run safety plan to mirror the federal Occupational Safety and Health Act (OSHA), this is the first step in that direction.
Importantly, the PHEW amendments also provide for over $400,000 in appropriations for the 2022-2023 fiscal year, including for 4.3 full-time equivalents at the Department of Labor and Employment's Division of Labor Standards and Statistics (Division), presumably for enforcement efforts. To this end, on June 3, 2022, the Division promulgated new interpretive guidance, INFO #5, addressing the expanded scope of PHEW, noting that as of May 31, 2022, “protected activities under the Act are no longer required to be related to a public health emergency (PHE).” Additionally, the division promulgated a new poster, addressing not only PHEW but also paid leave under the Colorado Healthy Families and Workplaces Act (HFWA). The new PHEW/HFWA poster was updated June 1, 2022, and is available here
COLORADO FALSE CLAIMS ACT
The CFCA, on the other hand, as described comprehensively in a prior Brownstein client alert, protects public funds paid to some private employers by holding individuals or companies liable for conspiring to commit, committing, or aiding and abetting fraud to obtain public monies. Additionally, the CFCA provides unique whistleblower protections nestled into its text for any individual bringing a civil action under the statute.
As workplaces continue to return to a “new normal,” these new laws present significant protections to whistleblowers (including employees and independent contractors) and serve as a reminder that employers need to keep up to date on their obligations and risks. Below is a summary of the most important changes about which employers and employees should take note.
Who qualifies as a whistleblower—employees, independent contractors or everyone?
While federal protections are often available only to individuals that fall within the traditional “employee” definition, Colorado's whistleblower laws are more expansive, covering a group of workers that many federal laws do not: independent contractors. The “Whistleblower Protection Health and Safety” law applies broadly to all “principals,” which includes private employers (defined at C.R.S. Section 8-4-101(6)) and any entity “that contracts with five or more independent contractors in the state each year.” Similarly, the CFCA's language states that the bill prohibits retaliatory action against an “individual” because of the individual's efforts in furtherance of investigating, prosecuting or stopping false claims.
What kind of conduct is protected by the new whistleblower protections?
The “Whistleblower Protection Health and Safety” law modified PHEW by removing the phrase “related to a public health emergency.” While this change may seem minor on its face, it significantly expands the types of claims and actions protected under the statute. As a result of the amendment, any person who voices “any” reasonable concern related to health or safety is legally protected in Colorado. As passed, the statute protects against adverse action or retaliation taken against any worker raising reasonable concerns about (1) workplace violations of government health or safety rules or (2) an otherwise significant workplace threat or safety to the principal, the principal's agent, other workers, a government agency or the public if the principal controls the workplace conditions giving rise to a threat or violation.
The CFCA creates a unique enforcement regime to prosecute businesses and individuals that lie or mislead in order to receive payments from the government. The CFCA has several mechanisms to encourage individuals (including employees) to come forward with information demonstrating such fraud. The CFCA provides protection for an individual who does any of the following and subsequently experiences an adverse employment action: (1) conducting or assisting in an investigation, testifying or filing an action based on a “reasonable belief of a potential violation”; (2) meeting with potential or retained counsel or the government about a matter filed or to be filed; (3) providing the individual's counsel or government “confidential information”; or (4) filing an action under the CFCA.
When do these changes become effective?
The “Whistleblower Protection Health and Safety” law went into effect on May 31, 2022, and protects conduct occurring on or after that date. The governor signed the CFCA on June 7, 2022, and the statute goes into effect on Aug. 10, 2022.
What are the available penalties for successful claims brought under the new whistleblower laws?
The “Whistleblower Protection Health and Safety” law provides its own remedies. A successful worker seeking relief under the law against its employer may seek reinstatement, lost pay (or $10,000, whichever is greater), compensatory damages for emotional distress or other pecuniary or non-pecuniary losses, punitive damages and attorney fees.
The CFCA states that an employee, contractor or agent is entitled to all relief necessary to make that individual whole if the individual is retaliated against or discriminated against for engaging in protected conduct under the CFCA. The Colorado Attorney General's Office has enforcement authority over the CFCA, but the CFCA additionally provides an individual with a private right of action.
How do the new whistleblowing laws impact employers?
Colorado employers should take time to review their reporting, ethics and grievance policies and procedures to ensure they are properly recording and promptly resolving employee or independent contractor complaints that could fall within the specter of either whistleblowing law (in addition to the pre-existing whistleblower protections under federal laws). Further, companies must ensure they do not run afoul of the new whistleblower laws by forcing workers to sign confidentiality agreements that limit or prevent them from disclosing the type of issues these new laws aim to address. Last, employers should take note when individuals have arguably engaged in protected activities before taking any form of employment action that could be deemed retaliatory.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.