The legislature this week debated several bills aimed at the business community, covering controversial topics including workplace discrimination and unemployment benefits during a lockout.
House Bill 1136, sponsored by Sens. Morgan Carroll, D-Aurora, and Lucia Guzman, D-Denver, and Reps. Claire Levy, D-Boulder, and Joe Salazar, D-Thornton, would allow plaintiffs in discrimination lawsuits against smaller companies to seek greater payouts.
The bill targets companies of 14 or fewer employees. It would allow plaintiffs to collect punitive and compensatory damages and attorney’s fees from the defendant. Similar laws exist for suits against larger employers. But Democrats felt employees at smaller companies should be allowed the same recourse.
Colorado is one of only eight states that don’t have such a law on the books.
The bill passed the Senate on Friday by a vote of 19-16, with Sen. Cheri Jahn, D-Wheat Ridge, joining Republicans in opposing the measure.
Gov. John Hickenlooper, a Democrat with ties to the business community, has not indicated whether he will sign or veto the legislation, which is now headed to his desk. He said in February that he wanted all sides to find a compromise, and expressed concerns over raising costs on small businesses.
Carroll suggested that protecting employees is crucial to growing the state’s economy and preserving jobs.
“These are very powerful rights that I think most people think exist right now to protect people in the all important workplace, which is, after all, how families survive and thrive…” Carroll said Thursday during second reading floor debate. “There is not equal opportunity or success in society without fairness and equality in the workplace.
“So, why is Colorado one of only eight states that does not provide a remedy against discrimination?” Carroll asked.
Democrats came across fierce opposition from the business community, who say the measure is one of the most costly bills to face the legislature this year. Leaders have expressed that the cost of defending against potentially frivolous lawsuits could bankrupt small businesses.
They have also stated that the measure is simply a means to provide incentives for trial attorneys, calling the legislation, “The Trial Lawyer Employment Act of 2013.” The actual bill is titled, “The Job Protection and Civil Rights Enforcement Act.”
The GOP ran a flurry of failed amendments, including attempts at exempting companies with five or fewer employees, banning punitive-damage awards and limiting attorney’s fees.
Sen. Kevin Lundberg, R-Berthoud, repeatedly spoke out against the bill during debate, laughing when he heard Democrats call the measure a jobs bill.
“We have for the last several years been talking about the need for jobs. This bill is designed to put the small business under the gun of threat of litigation… This is a job killing bill,” Lundberg addressed his colleagues. “If the citizens of Colorado have a civil right to a good job, first they have to have a job.
“An extreme measure like this doesn’t encourage employment, it discourages the small business owner from hiring people…” Lundberg added.
Sen. David Balmer, R-Centennial, carried the torch for Republicans, declaring that the measure would limit entrepreneurial activities.
“This is just another step along a long journey of eroding entrepreneurial creativity in Colorado and across the United States,” he opined.
“We need to recognize that small businesses are small, they don’t have the capability to have six-figure legal bills every year, and that’s what we’re asking them to commit to,” Balmer continued.
Unemployment benefits during a lockout
Also dominating the business controversy this week was a measure that would provide unemployment benefits to employees during a lockout.
House Bill 1304, sponsored by Rep. Dominick Moreno, D-Commerce City, and Guzman, would allow workers shut out of their workplaces during labor disputes to receive unemployment benefits.
The House backed the measure Monday by a 37-27 Democratic party-line vote. The bill is scheduled for a hearing Monday in the Senate Judiciary Committee.
The legislation has come under intense scrutiny, especially as the United Food and Commercial Workers union Local 7 readies for contract negotiations with area grocery stores in 2015. King Soopers and Safeway used threat of lockout in 2009 as labor leaders negotiated for pay and compensation raises.
Adding to the contention was a report from Legislative Council that HB 1304 could cost the Unemployment Insurance Trust Fund an estimated $3.4 million a week in the event of a lockout. That estimate exacerbated fears of insolvency, especially in the event of another recession, which could force raising taxes on all employers.
“Why should the people of Colorado finance the union’s labor dispute?” asked Rep. Bob Gardner, R-Colorado Springs. “It is a fact that lockdowns are defensive, but they are nevertheless between a particular employer and its union.
“The union, as a matter of law, represents those workers. As a matter of law, the employer cannot negotiate with the individual worker, they must negotiate with the union…” added Gardner. “The union ought to bear the cost of its failed negotiation.”
But Moreno does not believe a lockout is the result of failed negotiations: “What we’re saying simply is if you lockout your workers, if it’s no fault of those employees, then they are entitled to unemployment benefits,” he addressed his colleagues.
Moreno called the bill an attempt at “establishing equality back into our state statutes.”
“What this bill is about is shared economic consequences. When a union decides to strike, there are consequences to that decision,” he said. “Their family does not bring home a paycheck, there’s mortgages that are to be paid, utility bills to be paid, and that is a consequence for that union when they decide to strike…
“And so what we’re asking for is a consideration on the part of employers as well, if you decide to lockout your employees… then they should be eligible for unemployment benefits,” Moreno concluded.
Republicans see some success
Despite failed attempts by Republicans to lobby against contentious Democratic business proposals, they did see some success this week passing their own business-related bills.
House Bill 1206, sponsored by Sen. Mark Scheffel, R-Parker, and Rep. Brian DelGrosso, R-Loveland, would expand the authority of a local government to negotiate a business tax incentive agreement when there is a risk that the local business might leave the state.
The Senate State, Veterans and Military Affairs Committee on Monday voted 4-1 to send the measure to the full Senate where it is awaiting debate. The measure already unanimously passed the House.
Following the committee vote, Scheffel raved about the potential of offering incentives to local businesses for staying in the state.
“This incentive gives local governments another tool in the tool box to ensure that small businesses in their community have the resources to stay in Colorado,” he said. “This bill makes local businesses more competitive and expands the authority of local governments to reduce companies’ business personal property tax when that company is being recruited to leave the state.”
Current law only offers local government flexibility on the business personal property tax when those businesses are expanding their facilities, or building new infrastructure in Colorado.
The GOP was also successful this week with House Bill 1080, sponsored by Sens. Ted Harvey, R-Highlands Ranch, and Cheri Jahn, D-Wheat Ridge, and Reps. Chris Holbert, R-Parker, and Tracy Kraft-Tharp, D-Arvada.
The bipartisan bill would allow an aircraft manufacturer to receive a tax credit of $1,200 for each new employee they hire if they are located in an aviation development zone.
The bill passed the Senate Monday by a vote of 33-2 and is awaiting the governor’s signature.
“This bill will encourage economic growth throughout Colorado in a capital intensive industry that provides high-paying, skilled work,” Harvey said following the vote. “The aviation industry is responsible for thousands of Coloradan jobs, and extending this credit to those companies and employees who work, repair and maintain aircrafts in Colorado is a common sense, practical measure.”
Other business bills moving
Several other business bills received action this week by the legislature, including:
• House Bill 1255, sponsored by Reps. Angela Williams, D-Denver, and Carole Murray, R-Castle Rock, and Sen. Andy Kerr, D-Lakewood, and Scheffel, which would exempt certain Internet protocol-enabled services from oversight by the Public Utilities Commission. The measure unanimously passed the House on April 19 and is awaiting debate in the Senate;
• House Bill 1059, sponsored by Rep. Cheri Gerou, R-Evergreen, which would have provided a sales and use tax exemption used by telecommunications companies to expand broadband services. The House Finance Committee killed the measure Wednesday on a party-line vote;
• House Bill 1295, sponsored by House Speaker Mark Ferrandino, D-Denver, which would bring Colorado in line with the proposed federal Marketplace Fairness Act. The federal legislation would allow states to require online and catalog retailers to collect a consumer’s applicable sales taxes. The measure passed the House on Friday by a vote of 37-23. Rep. Frank McNulty, R-Highlands Ranch, said he accidentally joined Democrats in backing the bill;
• House Bill 1288, sponsored by Reps. Kathleen Conti, R-Littleton, and Daniel Kagan, D-Cherry Hills Village, and Sens. Pat Steadman, D-Denver, and Owen Hill, R-Colorado Springs, which would establish a statewide uniform sales and use tax base. The bill received preliminary approval from the House on Friday;
• House Bill 1292, sponsored by Reps. Dan Pabon, D-Denver, and Pete Lee, D-Colorado Springs, and Kerr and Sen. Jeanne Nicholson, D-Black Hawk, which would require state agencies to weigh overall “best value” in their consideration of competitive bids on state contracts. It would require state agencies to consider the use of Colorado workers and Colorado products to complete contracts, as well as wages, health care and other benefits. The measure would also require the Department of Labor and Employment to investigate and fine contractors who do not abide by the state’s requirement that they use Coloradans as at least 80 percent of their workforce. The measure passed the House Monday by a vote of 36-28 and is awaiting debate by the Senate; and
• House Bill 1142, sponsored by Hullinghorst and Sen. Rollie Heath, D-Boulder, which would cap investment-tax credits in economically disadvantaged enterprise zones at $750,000 per year. The measure received preliminary approval from the Senate on Friday.