Thursday, September 18, 2008

Colorado Proposed Amendment 55 - Just Cause Terminations

As an employment lawyer, one of the top ten questions I hear is "what is at-will employment"? I usually try to explain that this means that:

Workers can be fired for any reason or for no reason, as long at it's not an illegal reason. Well, what in the hell does that mean?

Basically, it means in Colorado there is a presumption that your employers can fire you for almost any random reason, for example, because they don't like the color of your shirt. But they can't fire you because they don't like the color of your skin. Certain laws protect workers from discrimination based on age, sex, color, religion, national origin, race, and disability. Those are some exceptions to at-will employment. Our society values equality, so bosses generally aren't supposed to act like bigots.

So, employers can terminate for any reason or no reason - as long as it does not violate a federal or state law against discrimination.

Workers lucky enough to have written employment agreements also can't be fired at-will if their contracts say the employer must have just cause to terminate them. This usually means the employer has to show bad performance or gross misconduct of some kind. Lots of high-level executives get this provision, along with their "golden parachutes," paying them millions even when the company goes under. But that's a different post.

So, employers can terminate for any reason or no reason - as long as it does not violate a federal or state law against discrimination - or violate a written employment agreement.

Let's recap so far. Minority workers get some protections from being terminated at-will and so do high level corporate execs. Sometimes whistle blowers are protected from termination, or at least they can get a remedy after they are fired for exposing things such as corporate accounting fraud, safety violations, and fraud on the government.

So, employers can terminate for any reason or no reason - as long as it does not violate a federal or state law against discrimination - or violate a written employment agreement - or violate whistle blower laws.

Union workers usually get protections from being terminated at-will for no good reason. Most union contracts require employers to show that they had a good reason for the termination, again usually just cause.

Government workers usually are protected from being terminated at will, since they have grievance procedures, administrative hearings, and written findings to support their terminations.

So, employers can terminate for any reason or no reason - as long as it does not violate a federal or state law against discrimination - or violate a written employment agreement - or violate whistle blower laws - or union collective bargaining agreements.

See where I'm going with this? And there are even more exceptions. Employees generally can't be terminated for legal off-duty conduct; for political affiliation; for voting or not voting; for taking military leave; for being pregnant; for taking family and medical leave; and the list goes on. . .

But you can be terminated for a random reason, like the boss is in a crappy mood because the Starbuck's was cold - even if you're doing a great job at work. Where is the protection for workers doing their job on a daily basis, who certainly deserve to keep their jobs unless there is a good reason for termination? Do we really want to keep a rule that encourages baseless, if not random, firings?

In the state of Montana, workers have had "just cause" protections since 1987. And nothing bad has happened to their economy as a result. A recent issue paper shows that Montana's "just cause" law had no perceptible impact on the unemployment rates. I highly recommend the article written by Denver attorney Barry Roseman and published by The American Constitution Society containing a detailed analysis of unemployment rates for Montana and the surrounding four states before and after the just cause law passed. 1.

Colorado workers are fed up with being fired with no reason given. Trust me. They seek my advice daily. Employees deserve a valid reason for their terminations. Colorado Amendment 55 addresses this need.

Amendment 55 defines "just cause" as specified types of employee misconduct and substandard job performance, employer bankruptcy, documented economic circumstances that directly affect the employer. It would include companies that employ more than 20 employees and non-profits that employ more than 1000. It would exclude the government and union workers who already have just cause provisions. It would provide workers fired without just cause with remedies including reinstatement where feasible, where not feasible, lost wages and benefits. It also provides the possibility of attorneys' fees and court costs to the prevailing party. Workers bear the burden of proof in this kind of a case, and they have a duty to minimize their damages by actively seeking work.

Employers should not be scared of this Amendment. Currently, they have a false sense of security by relying too heavily on the at-will presumption. It is riddled with exceptions, and the random nature of it invites an ignorant supervisor to abuse the authority of the company in a termination situation. Employers' lawyers have forever been advising employers to document poor performance of workers, provide honest evaluations to workers, and terminate for legitimate reasons. Small businesses with fewer than 20 employees would not be impacted by the Amendment.

Nothing infuriates a terminated worker more than a manager glibly saying, "You're at-will, so I don't have to give you a reason for termination." Talk about inviting lawsuits - this statement alone has driven thousands of calls to my office asking about filing a lawsuit. Amendment 55 would cure this. Yes, I'd like our society to advance to the point of equality that would put lawyers out of business.

If you think Colorado workers should keep their jobs unless they are engaging in misconduct or poor performance, Vote Yes on Amendment 55.

Source 1: Barry Roseman, Just Cause in Montana: Did the Big Sky Fall?, (Sept. 2008), accessed Sept. 18, 2008.

Source: Colorado Secretary of State, Amendment 55, General Election Ballot Question (accessed Sept. 18, 2008).

Subscribe to Kimberlie Ryan's Working Wellness


  1. Anonymous4:20 PM

    One thing that I am unclear on:

    For example, if a company decides to RIF a group of employees to shift the work to another state or country, if this passes, the RIF'd employee would have legal recourse?

  2. I don't believe this provision would give employees a new right of action in a mass lay off situation. In general, a lay off is different from a termination. Sometimes lay offs are governed by federal law, such as the WARN Act, which generally requires 60 days' notice in case of a mass layoff for covered employers. Usually business considerations can provide "just cause" to support a termination - if that's the true reason for the firing.