Initiative #76 – Allowable Reasons for Employee Discharge or Suspension

StaffScapes review of the devastating labor initiatives on the November Ballot.

Initiative #76 would eliminate “at will” employment in Colorado, prohibiting employers from firing or suspending full-time employees except for reasons defined in the amendment as “just cause”.  The term “just cause” includes: incompetence; substandard performance; neglect of job duties; repeated violations of an employer’s written policies and procedures; gross insubordination; employer bankruptcy; and documented adverse economic circumstances. This initiative would allow the terminated employee to sue the employer, challenging the firing or suspension. The court may order the employee to be reinstated and awarded back wages, damages and legal fees.

Listed below is the potential impact of initiative #76:

Ø      Current state and federal laws already limit at-will employment and protect employees from being terminated for reasons for discriminatory reasons such as race, sex, religion and age.

Ø      Imposing constitutional restrictions on businesses will increase administrative and litigation costs, hurting our local businesses and economy

Ø      Initiative 76 will prevent businesses from making basic financial decisions such as reorganization, automating operations and reducing unnecessary employment

Ø      Initiative 76 requires “binding arbitration” making the decision final without ability to appeal

Ø      New business may be reluctant to relocate to Colorado or may force existing businesses to move outside of Colorado

Ø      The estimate of fiscal impact shows an increase of government spending from this initiative of $1.3 million based on roughly 3,750 lawsuits being brought (which this writer believes is underestimated)

Should a business be forced to continue employing someone who has a major personality conflict and brings down the motivation and enjoyment of the entire organization? Do you want to be forced to continue to work with a co-worker such as this? Will you be comfortable working next to this disgruntled co-worker after reinstatement? How would you feel if your employer went out of business due to frivolous lawsuits from this initiative?

If the organized labor initiatives are successfully passed this November, our state’s economic growth will be dramatically stunted for years to come. Please check future editions of our blog to view the other initiatives that can have a devastating impact to Colorado.

Sources: Tomlinson & Associates; Economic Development Council of Colorado