Justia Labor & Employment Law Opinion Summaries

Articles Posted in Colorado Supreme Court

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The United States District Court for the District of Colorado certified a question of law to the Colorado Supreme Court. The question centered on proof of equitable estoppel. In 2017, a group of current and former exotic dancers sued the owners of clubs where they performed and the club owners’ corporate parent companies alleging the defendants acted in concert to wrongfully deprive the dancers of basic protections provided by law to employees. The plaintiffs contended they were misclassified as nonemployee “independent contractors” or “lessees” pursuant to “Entertainment Lease” agreements that identified the club-owner defendants as “landlords” rather than employers. According to the plaintiffs’ pleadings, the club-owner and corporate-parent defendants were jointly and severally liable for denying the dancers earned minimum wages and overtime pay, confiscating or otherwise misallocating their gratuities, charging them fees to work, and subjecting them to onerous fines. The club-owner defendants have successfully compelled arbitration of the plaintiffs’ claims based on the arbitration clause included in the agreements the dancers signed with the club owners. The corporate-parent defendants sought to do the same, but because they were not parties to the agreements or to any other written contract with the dancers, they had to find a different hook to compel the dancers into arbitration: that the dancers should be equitably estopped from litigating their claims against one set of defendants because they were in compelled arbitration of the same claims against the other set of defendants. The Colorado Supreme Court held Colorado’s law of equitable estoppel applied in the same manner when a dispute involves an arbitration agreement as it did in other contexts. Thus, a nonsignatory to an arbitration agreement could only assert equitable estoppel against a signatory in an effort to compel arbitration if the nonsignatory can demonstrate each of the elements of equitable estoppel, including detrimental reliance. View "Santich v. VCG Holding Corp." on Justia Law

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Dami Hospitality, LLC (“Dami”) was the owner-operator of a Denver motel that employed between four and ten people at any given time. As an employer of three or more persons, Dami was required by statute to maintain workers’ compensation insurance. Dami allowed its workers’ compensation coverage to lapse on in 2005. Upon receiving notification of the lapse from the Division of Workers’ Compensation (“DWC”), Dami conceded the violation and paid a corresponding settlement in June 2006. Dami again allowed its workers’ compensation coverage to lapse in 2006. From June 2007 to September 2010, Dami carried the proper insurance, but the company’s workers’ compensation coverage again lapsed on September 12, 2010 and went without insurance until July 9, 2014. On February 19, 2014, the DWC discovered that Dami had allowed its workers’ compensation insurance to lapse for these periods of time and issued a notice to Dami regarding this. Dami faxed a copy of workers' compensation insurance for the July 10, 2014 - July 10, 2015 period; Dami offered no such evidence for any other period, nor any explanation for the lapses. Fines accrued for noncompliance, totaling $841,200. The DWC ultimately issued an order upholding the fines. Dami appealed to the Industrial Claim Appeals Office (“ICAO”). The ICAO rejected all but Dami’s excessive fines argument. The ICAO remanded the matter to the DWC, directing it to review the constitutionality of the aggregated per diem fines assessed in accordance with the test established by the court of appeals in Associated Business Products v. Industrial Claim Appeals Office, 126 P.3d 323 (Colo. App. 2005). The ICAO would ultimately affirm the resulting fines, and Dami appealed to the Court of Appeals. The appellate court set aside the fines, assuming, without deciding, the Excessive Fines Clause could be applied to challenge regulatory fees imposed on a corporation. The Colorado Supreme Court concluded the proper test to assess the constitutionality of government fines under the Eighth Amendment required an assessment of whether the fine was grossly disproportional to the offense for which it was imposed. The Supreme Court thus reversed the court of appeals’ ruling and remanded to that court for return to the Division of Workers’ Compensation with instructions to, as appropriate and necessary, develop an evidentiary record sufficient to determine whether the $250–$500 fine that a business was required to pay for each day that it was out of compliance with Colorado’s workers’ compensation law is proportional to the harm or risk of harm caused by each day of noncompliance. View "Colo. Dept. of Labor & Emp. Div. of Workers' Comp. v. Dami Hosp." on Justia Law

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Colorado Custom Maid (CCM) places house cleaners with clients who need their homes cleaned. In doing so, it has tried to avoid becoming the house cleaners’ employer, hoping instead to maintain the relationship as one between a referral service and a group of independent contractors so that it could avoid paying unemployment taxes on the money it paid to those cleaners. In 2014, the Colorado Department of Labor and Employment Division of Employment and Training (Division) concluded that, despite CCM’s efforts to characterize them as independent contractors, CCM’s cleaners were in fact employees for whom the company should be paying unemployment taxes. After evaluating the dynamics of the relationship between CCM and its cleaners, the Colorado Supreme Court agreed. The Court affirmed the conclusion of an Industrial Claim Appeals Office Panel that the realities of CCM’s relationship with its cleaners established an employment relationship. View "Colo. Custom Maid v. ICAO & Div. of Unemp. Ins." on Justia Law

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In 2010, the Colorado General Assembly enacted Senate Bill 10-191 (SB 191), which significantly amended Teacher Employment, Compensation, and Dismissal Act of 1990 (TECDA) provisions concerning teacher contracts and the transfer process. SB191 eliminated the earlier practice of transferring teachers to schools without the consent of the principal of the recipient school. Under SB 191, nonprobationary teachers who were deemed effective during the prior school year and who have not secured a mutual consent placement become members of a “priority hiring pool” for available positions. However, nonprobationary teachers who were unable to secure such a position after the longer of twelve months or two hiring cycles are placed on unpaid leave until they are able to secure an assignment. Defendant-Petitioner School District No. 1 in the City and County of Denver (DPS) sought review of the trial court’s denial of its motion to dismiss Plaintiff-Respondent Rebecca Reeves-Toney’s constitutional challenge to the “mutual consent” provisions of section 22-63-202(2)(c.5) of the TECDA. Reeves-Toney alleged these provisions violated the local control clause of article IX, section 15 of the Colorado Constitution by delegating local school boards’ hiring decisions to principals and other administrators. DPS moved to dismiss Reeves-Toney’s complaint, arguing, among other things, that she lacked standing to bring her claim. The trial court agreed that Reeves-Toney lacked individual standing, but nevertheless concluded that she sufficiently alleged taxpayer standing to challenge section 22-63-202(2)(c.5) and plausibly alleged that the statute was facially unconstitutional. The court thus denied the motion to dismiss. The Colorado Supreme Court determined Reeves-Toney did not allege an injury based on an unlawful expenditure of taxpayer money, thus failing to demonstrate a clear nexus between her status as a taxpayer and the challenged government action. Reeves-Toney therefore lacked taxpayer standing to bring her constitutional challenge to section 22-63-202(2)(c.5). Accordingly, the Court reversed and remanded for the trial court to dismiss Reeves-Toney's complaint. View "In re Reeves-Toney v. School Dist. No. 1 in the City & County of Denver" on Justia Law

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Believing that the decision to stop paying teachers for English Learning Acquisition (ELA) training violated a series of the parties’ Collective Bargaining Agreements (CBAs), the Denver Classroom Teachers Association (DCTA) pursued a grievance against the District that was referred to nonbinding arbitration and resulted in a recommendation in favor of the DCTA. Because the District declined to adopt that recommendation, however, the DCTA brought this suit asserting a breach-of-contract claim against the District. The trial court ruled that the relevant provisions of the CBAs were ambiguous and that their interpretation was, therefore, an issue of fact for the jury. The jury, in turn, found the District liable for breach of contract and awarded damages to the DCTA. A division of the court of appeal subsequently affirmed the judgment of the trial court. After its review, the Colorado Supreme Court concluded interpretation of the CBAs was properly submitted as an issue of fact to the jury because the CBAs were ambiguous regarding payment for ELA training. “[B]ecause the CBAs are fairly susceptible to being interpreted as expressly requiring compensation for ELA training, we cannot conclude that the management rights clause includes the right to refuse to pay for ELA training.” View "School Dist. No. 1 v. Denver Classroom Teachers Ass'n" on Justia Law

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The Tenth Circuit Court of Appeals certified two questions of Colorado law to the Colorado Supreme Court. The questions stemmed from an action brought by teacher Linda Johnson against Denver School District No. 1 (“the District”) and the District’s Board of Education, in which Johnson argued that by placing her on unpaid leave, the District breached her contract and violated her due process rights. The federal district court concluded that because Johnson was placed on unpaid leave, rather than terminated, she was not deprived of a property interest. Johnson appealed that decision to the Tenth Circuit. After analyzing the statutory history and the current statutory language, the Colorado Supreme Court held that the provisions of section 22-63-202(2)(c.5) (CRS 2015) applied to all displaced nonprobationary teachers, not just nonprobationary teachers who were displaced because of a reduction in enrollment or an administrative decision to eliminate certain programs (the reasons stated in subparagraph (VII)). Furthermore, the Court held that nonprobationary teachers who placed on unpaid leave had no vested property interest in salary and benefits, meaning a nonprobationary teacher who is placed on unpaid leave under subparagraph (IV) is not deprived of a state property interest. View "Johnson v. Sch. Dist. No. 1" on Justia Law

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The United States District Court for the District of Colorado certified a question of Colorado law to the Colorado Supreme Court. Defendant Ray Domenico Farms, Inc. grew organic vegetables. Plaintiffs were three year-round and four seasonal migrant workers who had been previously employed by Domenico Farms from as far back as 1992. All Plaintiffs were paid by the hour, and alleged they never received overtime pay during their employment with Domenico Farms. While agricultural workers were generally exempt from the Fair Labor Standards Act’s (“FLSA”) overtime requirements, Plaintiffs alleged they performed nonagricultural tasks in weeks in which they worked more than forty hours, thus entitling them to overtime wages under FLSA for those weeks. The certified question from the federal court pertained to how far back in time a terminated employee’s unpaid wage claims could reach under the Colorado Wage Claim Act, sections 8-4-101 to -123, C.R.S. (2017). Specifically, the certified question asked whether the statute permitted a terminated employee to sue for wages or compensation that went unpaid at any time during the employee’s employment, even when the statute of limitations had run on the cause of action the employee could have brought for those unpaid wages under Colo. Rev. Stat. § 8-4-103(1)(a). The Supreme Court held that under the plain language of section 109, an employee could seek any wages or compensation that were unpaid at the time of termination; however, the right to seek such wages or compensation was subject to the statute of limitations. That statute of limitations begins to run when the wages or compensation first become due and payable and thus limits a terminated employee to claims for the two (or three) years immediately preceding termination. Thus, the Court answered the certified question in the negative. View "Hernandez v. Ray Domenico Farms, Inc." on Justia Law

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The United States District Court for the District of Colorado certified a question of Colorado law to the Colorado Supreme Court. Defendant Ray Domenico Farms, Inc. grew organic vegetables. Plaintiffs were three year-round and four seasonal migrant workers who had been previously employed by Domenico Farms from as far back as 1992. All Plaintiffs were paid by the hour, and alleged they never received overtime pay during their employment with Domenico Farms. While agricultural workers were generally exempt from the Fair Labor Standards Act’s (“FLSA”) overtime requirements, Plaintiffs alleged they performed nonagricultural tasks in weeks in which they worked more than forty hours, thus entitling them to overtime wages under FLSA for those weeks. The certified question from the federal court pertained to how far back in time a terminated employee’s unpaid wage claims could reach under the Colorado Wage Claim Act, sections 8-4-101 to -123, C.R.S. (2017). Specifically, the certified question asked whether the statute permitted a terminated employee to sue for wages or compensation that went unpaid at any time during the employee’s employment, even when the statute of limitations had run on the cause of action the employee could have brought for those unpaid wages under Colo. Rev. Stat. § 8-4-103(1)(a). The Supreme Court held that under the plain language of section 109, an employee could seek any wages or compensation that were unpaid at the time of termination; however, the right to seek such wages or compensation was subject to the statute of limitations. That statute of limitations begins to run when the wages or compensation first become due and payable and thus limits a terminated employee to claims for the two (or three) years immediately preceding termination. Thus, the Court answered the certified question in the negative. View "Hernandez v. Ray Domenico Farms, Inc." on Justia Law

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In this case, a hearing officer found that claimant Laurie Gomez, who was terminated from her position as public services manager with the Mesa County Public Library District (the “Library”), suffered from acute stress disorder and depression and was mentally unable to perform the work required of her. The hearing officer nevertheless disqualified Gomez from receiving unemployment benefits under section 8-73-108(5)(e)(XX), C.R.S. (2016) because the officer determined that Gomez’s mental condition was caused by her own poor job performance, and therefore, Gomez was ultimately at fault for her separation from employment. Gomez appealed the hearing officer’s decision to the Industrial Claim Appeals Office (“ICAO”), which reversed. The panel adopted the hearing officer’s finding that Gomez was mentally unable to perform her job duties, but concluded that the hearing officer’s findings regarding the etiology of Gomez’s medical condition were too remote from the proximate cause of her separation, and that scant evidence supported the conclusion that Gomez committed a volitional act to cause her mental incapacity. The court of appeals and the Colorado Supreme Court affirmed: neither the text of section 8-73-108(4)(j) nor related case law contemplated further inquiry into the origin or root cause of a claimant’s mental condition, and such an inquiry is beyond the scope of the simplified administrative proceedings to determine a claimant’s eligibility for benefits. View "Mesa Cty. Public Library Dist. v. Indus. Claim Appeals Office" on Justia Law

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Norma Hoff owned a home she rented through a property management agency. The roof sustained hail damage, and she contracted with Alliance Construction & Restoration, Inc. (Alliance) to make the repairs. Alliance subcontracted the roof repairs to MDR Roofing, Inc. (MDR). MDR employed Hernan Hernandes as a roofer. While working on Hoff's roof, Hernandez fell from a ladder and suffered serious injuries. He filed a workers' compensation claim against MDR, but MDR's insurer, Pinnacol Assurance, denied the claim because MDR's insurance coverage had lapsed. The issue this case presented for the Supreme Court's review was whether Pinnacol had a legal obligation to notify MDR of a certificate of insurance when the policy evidenced by the certificate was cancelled. Based on the certificate at issue in this case and the applicable statute, the Colorado Supreme Court concluded that the insurer had no such obligation. Therefore, the Court reversed the appellate court's judgment to the contrary. View "Pinnacol Assurance v. Hoff" on Justia Law