By: Abigail Garber
The Colorado legislature is considering ballot initiative 2025-2026 #43, which would make Colorado the second state (after Montana) to require employers to have “just cause” before discharging or suspending an employee. If the ballot initiative becomes law, Colorado would no longer be an “at-will” employment state.
Text of the Proposed Initiative
The proposed initiative would apply to private employers with eight or more employees. It would protect employees of private sector employers—excluding independent contractors and employees already covered by collective bargaining agreements with their own just cause provisions—from discharge or unpaid suspension without an employer first establishing “just cause” for such action. § (2)(a) lists seven possible “just causes” for suspension or discharge:
- Substandard performance of assigned job duties following notice and an opportunity to cure;
- Material neglect of assigned job duties;
- Repeated violations of written policies and procedures relating to job performance;
- Gross insubordination that affects job performance;
- Willful misconduct that affects job performance;
- Conviction of a crime of moral turpitude; or
- Specific economic circumstances that directly and adversely affect the employer and are documented by the employer.
Employees who believe they have been suspended or discharged without just cause may sue their employer within 180 days of having been placed on notice of such action. If the employer is found to have violated the just cause requirement, a suing employee may be reinstated with or without back pay, receive front pay, or receive “any other equitable relief.” The initiative also allows for an attorney fee shift for a prevailing plaintiff, which significantly increases the liability faced by an employer defending a claim.
Questions Left Unanswered
The bill leaves out a number of definitions that are certain to be debated by lawmakers. For example, it does not specify what would qualify as “repeated” policy violations (is two sufficient? Is there a time limit between violations before the count is reset?), nor whether employers must maintain a record of such violations (are informal, verbal warnings enough?). The bill does not define what constitutes “gross” insubordination (would a comment declining an assigned task be enough?), a “conviction” (would an Alford or nolo contendre plea qualify?) or a “crime of moral turpitude” (must this involve significant harm to an alleged victim? Or do certain types of intent suffice – like for theft or fraud?).
Impact on Workplace Investigations
Regardless of its outcome, the initiative as written opens major questions related to the world of workplace investigations. Many of the just causes listed in the initiative are things that might naturally involve a formal workplace investigation. Employers often seek out impartial investigations to gather a full understanding of events, and in some cases, place Respondents on leave while the investigative process unfolds. If passed, the initiative would preclude such suspension (if unpaid) while an investigation takes place. That is sure to change the speed at which employers expect findings to be delivered, if they initiate a formal investigation in the first place. On the other hand, the strict requirement that just cause be established prior to a discharge or suspension may push employers to ensure they have engaged in a thorough investigation with solid findings as a precautionary measure, should they face a lawsuit under the new law.