The Rocky Mountain Employer

“Last week, the United States Supreme Court (“SCOTUS”) heard oral argument on Ames v. Ohio Department of Youth Services (“Ames”), a case based on a claim of reverse discrimination and previously discussed in the Rocky Mountain Employer.  The Justices’ comments during the oral argument indicate a strong likelihood that SCOTUS will reject the “background circumstances” test utilized in multiple federal Circuits (including the Tenth Circuit) in reverse discrimination cases, thereby lowering the prima facie burden required to state reverse discrimination claims under Title VII of the Civil Rights Act.”

“Two weeks ago, the Rocky Mountain Employer discussed recent bills from the Colorado General Assembly proposing certain changes to paid family and medical leave laws in Colorado. The General Assembly is now also considering a bill which would affect employers’ allowable tip credits in food and beverage-based industries where local minimum wages are higher than Colorado’s statewide minimum wage. If passed, House Bill 25-1208 (“HB25-1208”) would permit employers in localities with higher minimum wages to take concomitantly higher tip credits against such wages for employees who regularly and customarily receive tips as part of their income.”

“On February 14, 2025, newly-appointed General Counsel of the NLRB (“GC”), William Cowen, issued Memorandum GC 25-05, which rescinded no less than 31 previously-issued General Counsel Memoranda. Out of the rescinded memoranda, 18 were issued by GC Jennifer Abruzzo, who was nominated for the position by President Biden in 2021 and fired from that position shortly after President Trump took office, demonstrating that the new, Trump-led NLRB will aim to reverse its pro-labor stance on many labor law issues.”

“As part of the Colorado General Assembly’s 2025 Regular Session, the Colorado Senate has introduced two new and very different bills potentially affecting both employee and employer rights and responsibilities under Colorado’s Paid Family and Medical Leave Insurance Act and program (“FAMLI”).  One bill, SB25-144, seeks to provide additional leave benefits under certain circumstances and to set certain parameters on the Director of the FAMLI Division’s establishment of premium amounts for the program in future years.  The other, SB25-074, seeks to carve out certain employers who employ a majority of “highly specialized employees” from FAMLI’s employment protection requirements.”

“Introduced in the Colorado General Assembly on January 8, 2025, House Bill 25-1001 (“HB 25-1001”) represents the latest attempt by legislators to find common ground with Governor Jared Polis on the issue of confronting wage theft after Governor Jared Polis vetoed House Bill 24-1008 in the summer of 2024.  If signed into law as is, HB 25-1001 would create even more exposure for employers (and even those who would not normally consider themselves employers) for wage and hour violations under Colorado law by enhancing penalties; expanding accountability; and empowering employees in pre-suit settlement negotiations.  However, HB 25-1001 still has a long road ahead of it before it can be signed into law.”

“President Donald Trump has issued a flurry of Executive Orders in his first few days in office that aim to eliminate “diversity, equity, and inclusion” (“DEI”) policies in the private and public sphere.  President Trump’s Executive Order titled, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Order”), revokes decades-old Executive Order 11246, which, among other things, aimed to ensure that private sector employers working for the federal government under contract did not discriminate on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin.  However, despite the Order, private employers with DEI policies need not and should not eliminate these policies without a thorough audit of the same.”

“Multiple states are joining Colorado in implementing state-run paid family and medical leave programs, similar to Colorado’s Paid Family and Medical Leave Insurance program (“FAMLI Program”). The adoption of these programs raises questions regarding the interplay and coordination between the benefits and protections afforded by the federal Family and Medical Leave Act (“FMLA”), state-run paid family leave programs like the FAMLI Program, and employer-provided benefits such as short-term disability, paid sick leave, and other paid time off—particularly as to when and how employees may supplement either unpaid FMLA leave or state-run paid family leave with employer-provided benefits.  In a January 14, 2025 Opinion Letter, the U.S. Department of Labor has attempted to answer some of these questions.”

“On January 15, 2025, in E.M.D. Sales, Inc. v. Carrera,[1] Justice Kavanaugh issued the Supreme Court’s unanimous opinion rejecting arguments in favor of a heightened “clear and convincing evidence” standard for proving exceptions to overtime requirements under the Fair Labor Standards Act (“FLSA”) The question presented to the Court was whether this higher standard should apply to overtime exemption classification disputes instead of the default “preponderance of the evidence” standard. The Court concluded that even though the FLSA aims to protect workers and ensure fair wages, such public policy considerations had no bearing on the applicable standard of proof.”

“As reported in the Rocky Mountain Employer in October, 2024, in Ames v. Ohio Department of Youth Services, the U.S. Supreme Court is poised to review how reverse discrimination claims are assessed under Title VII of the Civil Rights Act and resolve an ongoing Circuit split on the issue. “Argument before the Court is scheduled for February 26, 2025, but, in the meantime, the U.S. Equal Employment Opportunity Commission (“EEOC”) and the U.S. Department of Justice (“DOJ”) have submitted an amicus brief in favor of Petitioner Marlean Ames to argue that the heightened “background circumstances” test for reverse discrimination cases, as applied by the Court of Appeals for the Sixth Circuit, should be abandoned.”

“On December 3, 2024, the U.S. Department of Labor (“DOL”) announced a proposed rule to phase out the issuance of Section 14(c) certificates under the Fair Labor Standards Act (“FLSA”). Since 1938, these certificates have allowed employers to pay workers with disabilities less than the federal minimum wage based on their productive capacity. The DOL’s proposed rule reflects its conclusion that these certificates are no longer necessary as a result of significant advancements in disability rights, workforce inclusion, and employment opportunities for individuals with disabilities.”

“Last Spring, the Rocky Mountain Employer discussed the U.S. Department of Labor’s (“DOL’s”) anticipated increases to the minimum salary thresholds for exemptions from the Fair Labor Standards Act’s (“FLSA’s”) overtime exemptions for executive, administrative, and professional employees—including the salary thresholds for “highly-compensated employees”—which went into effect on July 1, 2024, and which affected the exempt status of salaried and highly-compensated employees both in Colorado and nationwide (the “Final Rule”). However, on November 15, 2024, the U.S. District Court for the Eastern District of Texas, in Texas v. United States Department of Labor, vacated the DOL’s Final Rule, effectively resetting salary thresholds to their previous 2019 levels.”

“Colorado law occupies a unique middle-ground position in “right to work” labor laws, as it currently allows employees to unionize after obtaining a simple majority vote, but also requires a second election where a 75% plurality must be obtained before a recognized union can negotiate for “union securities.” However, Colorado labor movement is looking to change Colorado’s status from a modified right-to-work state to a state that permits conditioning employment on membership with a union once a union is elected as the employees’ bargaining agent.  Specifically, the Colorado labor movement is pushing for the passage of the Worker Protection Act (“WPA”), which would repeal key provisions of the over 80-year-old Colorado Labor Peace Act (“LPA”).”

“On November 13, 2024, the National Labor Relations Board issued a landmark decision in Amazon.com Services LLC, overturning decades-long precedent to hold that employers violate Section 8(a)(1) of the National Labor Relations Act when they require employees to attend captive-audience meetings (or else face discipline or discharge) in which the employer expresses its views on unionization.”

“On November 8, 2024, the National Labor Relations Board ruled in Siren Retail Corp. d/b/a Starbucks Corp. that the prior test governing the lawfulness of statements made by employers concerning the effects of unionization on the employer/employee relationship was wrongly decided, and defined a new test that considers whether the employer’s statements are factually supported and reasonably justified.”

“The Rocky Mountain Employer recently discussed the U.S. Department of Labor’s recent guidelines focused on preventing disability discrimination in the hiring process resulting from the use of artificial intelligence (“AI”) and has previously discussed Colorado’s own legislation intended to curb unintentional discrimination resulting from the use of AI in employment decisions.”

“On October 7, 2024, the Colorado District Court for the City and County of Denver denied Southwest Airlines’ motion to dismiss the Transport Worker Union of America, AFL-CIO, Local 556’s Complaint seeking a declaratory judgment that the settlement reached between Southwest and the Division of Labor Standards and Statistics is unenforceable.”

“On September 9, 2024, the Colorado Supreme Court in Hamilton v. Amazon.com Services LLC held that holiday incentive pay offered by an employer must be included in the calculation of the “regular rate of pay” when determining an employee’s overtime rate of pay.“

“The U.S. Supreme Court is set to review how reverse discrimination claims are assessed under Title VII of the Civil Rights Act and resolve an ongoing Circuit split on the issue.”