By Jim Goh, partner, Holland & Hart LLP.
The Colorado Anti-Discrimination Act (CADA) prohibits employers from, among other things, firing employees for engaging in lawful, off-duty, off-premises activities. While this provision of CADA was originally passed to prevent employers from firing smokers, employees have used the provision to challenge their discharge for a variety of other lawful, off-duty activities, such as engaging in unpopular political activities or in homosexual relationships. And while originally believed to protect employees from discharge only for off-duty conduct unrelated to their jobs, on October 16, 2008, the Colorado Court of Appeals expanded the scope of protections and held that the provision also protects employees from discharge due to job-related whistleblowing.
FACTS
Dennis Watson responded to an Internet job posting for a temporary utility worker position at Xcel Energy. The job posting required the candidate to have a valid commercial driver’s license (CDL) or to obtain one within six months of employment. Watson was hired without a CDL.
Five and a half months later, an Xcel manager discovered that Watson had not yet obtained a CDL. The next day, Watson made a telephone call to the Occupational Safety and Health Administration Act (OSHA) to report what he believed were certain unsafe working conditions. He made the call when he was off duty and outside Xcel’s premises. His call prompted a site visit by an OSHA investigator who informed Watson’s manager about the complaint without revealing Watson’s identity. The very next day, this same manager terminated Watson’s employment on the basis that he had not obtained a CDL.
Watson filed a lawsuit alleging that Xcel violated section 24-34-402.5 of the CADA, which is also commonly known as the “Smokers’ Rights Statute.” That statute, which was originally proposed by the tobacco lobby to prevent employers from firing smokers, prohibits an employer from discharging an employee for engaging in “any lawful activity off the premises of the employer during nonworking hours . . ..” Watson claimed that his termination was in retaliation for having complained to OSHA, an act which he argued qualified as off-duty, off-premises conduct.
The case was tried to a jury, which found Xcel liable. Xcel appealed to the Colorado Court of Appeals, arguing principally that the Smokers’ Rights Statute applies only to private activities unrelated to work. Xcel relied on a federal court’s interpretation that the statute only immunizes employees engaged in “private off-the-job activity that is unrelated to the[ir] job duties.” The Colorado Court of Appeals disagreed with the federal court interpretation, concluding that the Smokers’ Rights Statute protects all “lawful, off-duty conduct, whether or not work-related” and that Watson’s off-duty, off-premises complaint to OSHA, even though directly job-related, was covered under the statute.
The Court of Appeals agreed with Xcel; however, the Court ruled that the statute does not authorize jury trials because it only provides a backpay remedy, which is equitable in nature. A jury trial is mandated only where the plaintiff seeks to enforce legal, as opposed to equitable, rights. The court applied the same reasoning to preclude the recovery of prejudgment interest, a legal (rather than equitable) remedy. Therefore, the Court of Appeals sent the case back to the trial court and instructed the judge, not a jury, to determine liability. Watson v. Public Service Co. of Colorado d/b/a Excel Energy, Case No. 07CA1024 (Colo. App., Oct. 16, 2008).
LESSONS LEARNED
This case is good news and bad news for employers. The good news is that claims under the so-called Smokers’ Rights Statute – which prohibits employers from terminating employees for lawful, off-duty conduct – goes to a judge, not a jury. Employers should be pleased with this result as it limits the possibility for runaway jury verdicts. The bad news is that the decision provides yet another avenue for employees to challenge their discharge. Along with legislative amendments made in 2007 that change the attorneys’ fees provision of the statute from a “loser pays” system to one in which only prevailing employees may recover their attorneys’ fees, this decision is likely to make the Smokers’ Rights Statute more frequently raised by plaintiffs lawyers in challenging the termination of their clients.
