(Centennial Fellow) To hear trial lawyers and their anti–business enablers tell it, the only thing that prevents Colorado employers from literally chaining workers to their desks is the “right to sue” their dastardly bosses. In this fantasy world, plaintiffs’ attorneys never bring frivolous lawsuits and fired employees never file dubious claims motivated but grudges against their former employers.
In fact, listening to testimony recently on Senate Bill 72 (sponsored by Sen. Morgan Carroll, D–Aurora, and Rep. Claire Levy, D–Boulder), the uninitiated could be forgiven for wondering—given the obvious virtue presumed by the bills’ supporters—why the sponsors don’t propose a new law that simply accepts employees’ claims at face value, dispenses with the inconvenience of a trial, and orders those heartless employers to immediately deposit funds into plaintiffs’ bank accounts.
Maybe that’s on their agenda for next year.
Fortunately for Colorado job creators and workers who want a job rather than a chance to play “litigation lottery,” the bill died in the House State Affairs Committee—the third time in as many years that similar legislation has failed. This year, the tally sadly fell along party lines. In the two previous iterations, sensible members of both parties united to recognize this idea as shortsighted and anti–economic growth.
According to a local liberal website that repeated proponents’ arguments as fact, the problem is that “employees are protected against workplace discrimination for race, age, gender and sexual orientation” but “they are not allowed to collect punitive damages, compensatory damages or attorney fees even if they prove discrimination” to “the Colorado Civil Rights Commission.”
That’s one way to look at it—albeit from a shallow, tendentious position that views litigation as job creation.
Employers know all too well that they can do everything by the book and still find themselves hiring a lawyer to defend a discrimination claim—often tantamount to proving their own innocence—either in court or to the Civil Rights Commission or both.
In fact, the 2009 annual report from the Colorado Civil Rights Division reveals that almost 92 percent of complaints failed even to show probable cause. At the federal Equal Employment Opportunity Commission, more than 95 percent of complaints were meritless.
For employers, that means their time and resources are needlessly wasted answering 10 to 20 frivolous complaints for every one that may be legitimate. Those distractions—which divert from the business of providing goods and services to their customers—are not inconsequential. Responding to a complaint can easily cost $25,000 to $50,000. Going to trial raises that cost to more than $100,000.
Perhaps employers should demand that those who bring meritless lawsuits be required to pay their employers’ legal costs.
Worse yet, when the Civil Rights Commission fails to find probable cause, that’s not the end of the case, plaintiffs are not barred from filing the same claim in court.
Plaintiffs and attorneys—who typically receive 33 to 40 percent of an award or settlement—know that businesses must weigh both the financial cost and the workplace disruption caused by a discrimination complaint. They often file dubious claims with the aim of reaching a pre–trial settlement from an employer willing to write a check to make the legal harassment just go away.
If responding to such tactics is a costly nuisance to large employers, it can be devastating to small businesses that were the target of Senate Bill 72.
In today’s economy, just keeping the doors open and providing jobs for hard–working employees is hard enough without trial lawyers and anti–business legislators compounding those challenges with the unnecessary