Find the second one here. Imposing a new threshold for discrimination and harassment claims, cumbersome new recordkeeping requirements and strict requirements governing nondisclosure and non-disparagement restrictions in agreements with workers, the POWR Act requires Colorado employers to revisit their policies, practices and existing forms of various agreements.
Part 2 will address changes related to harassment, discrimination and recordkeeping requirements and related issues. These changes are nuanced but will likely require a significant overhaul of various employment-related agreements. This constitutes a significant change to existing law. These new requirements can be construed to apply to confidentiality and other restrictive covenant agreements, employment agreements and offer letters, employee handbooks and policies and various other employment-related agreements such as equity grants , as well as to settlement and release agreements.
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Section also includes new limitations on liquidated damages provisions in nondisclosure agreements. Specifically, a liquidated damages provision may not constitute a penalty or punishment. In order to be enforced, it must provide for an amount of damages that is reasonable and proportionate in light of the anticipated actual economic loss that a breach of the agreement would cause, with the amount varying based on the nature and severity of the breach.
Claims may be brought immediately i. The new law is extremely broad, and on its face applies well beyond agreements involving settlement of claims of unlawful or unfair employment practices under CADA. It also leaves many unanswered questions. The statute does not expressly include standard carve-outs for employers for truthful statements, responding to legal process or other similar purposes.
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We expect that the scope of this law will become better defined through guidance and case law going forward, but for now, employers should to exercise caution. Specifically, employers would be wise to work with legal counsel to promptly review any and all agreements including handbooks and policies acknowledged by employees to determine whether revisions might be necessary to avoid running afoul of this new law.
