Back in March of 2021, Democratic lawmakers in Colorado began directing their attention towards the growing issue of direct corporate negligence claims, laying down the initial groundwork for what would turn out to be one of the state’s most shocking legislative reversals in decades. Aimed at holding corporations fully accountable for employee submitted negligible claims, if passed, HB21-1188 would directly reverse the Colorado Supreme Court’s 2017 ruling in Ferrer v. Okbamicael, which states that an employer’s admission of vicarious liability restricts an employee’s direct negligence claims against them.
Simply put, under Colorado’s superior doctrine, any employer or corporation can be held vicariously liable for a direct negligence claim brought against them, as long as the claim in question occurred within the employee’s time at the company. Other types of direct negligence claims that qualify under HB21-188 include negligent supervision, training and hiring or failure to properly maintain a company vehicle or equipment.
HB21-1188 would directly reverse the Colorado Supreme Court’s 2017 ruling."
Just two months later, Governor Jared Polis and Democratic lawmakers would go on to successfully sign HB21-1188 into Colorado State law, marking a shift in workplace power from the employer to the employee. Despite many outspoken proponents of the new bill, many legal experts are expecting HB21-1188 to increase overall litigation costs for some companies directly facing negligence claims.
“The expansion of HB21-1188 puts pressure on the employer to settle the case. All that litigating becomes very expensive, and it becomes very disruptive. A lot of small businesses usually don’t have the resources to be in a position to manage litigation full time while they’re also trying to run a business full time,” stated Lee Mickus, a legal partner at Evans Fears & Schuttert who contributed to the 2017 Ferrer ruling.
In addition to increases in litigation costs for companies, critics of HB21-1188 fear an immediate uptick in statewide negligence claims prompted by employees will undoubtably put companies in the direct line of fire to receive significant reputational damages, potentially risking the exposure of either sensitive or damaging information to the general public in open court trial. Already delayed once due to the ongoing pandemic, HB21-1188, now in full effect, is expected to alter the ways in which employers and employees interact on a day-to-day basis, hopefully fostering an environment of both transparency and accountability in the years to come.
