On April 13, 2017, Governor John Hickenlooper approved Colorado House Bill 17-1021 (“HB 17-1021”) which amends Section 8-1-115 of the Colorado Revised Statutes. In summary, HB 17-1021 provides that the information an employer provides to the Colorado Department of Labor and Employment (“CDLE”) in connection with complaints and investigations into violations of the State’s wage and hour laws can be treated as a public record and released to the public pursuant to the Colorado Open Records Act, unless the CDLE determines that the information is a trade secret.
CDLE’s Authority to Investigate Compliance with Colorado’s Wage & Hour Laws
Under Colorado law, the CDLE has the authority, and duty, to inquire diligently into any violation of the State’s wage and hour laws and to institute actions for penalties or fines if it is deemed an employer is in violation. (Colorado Revised Statutes Section 8-4-111.) All books, payroll records, and other data and statistics an employer maintains for the purpose of compliance with the State’s wage and hour laws must always be open for inspection by the CDLE for purposes of ascertaining compliance. Any employer who refuses to furnish such documentation shall be subject to a penalty. (Colorado Revised Statutes Section 8-1-117.) Further, upon request, every employer and employee shall furnish the CDLE with all payroll information requested and the CDLE has the right to examine, under oath, any employee or employer (or officer, agent, or employee of employer) for purposes of ascertaining any information for which the employer is required under the law to provide to the CDLE. Any employer or employee who fails to provide the information is guilty of a misdemeanor and subject to fines. (Colorado Revised Statute Section 8-1-114.)
The Wage Theft Transparency Law
Prior to the passage of HB 17-1021, the information provided by an employer in connection with a complaint and investigation into wage and hour violations was protected. The information was deemed confidential and was not subject to disclosure. HB 17-1021 amended Colorado Revised Statutes Section 8-1-115 to now provide that after all remedies have been exhausted by an employer after the CDLE has issued a notice of citation or notice of assessment relating to wage and hour violations, the CDLE will treat the information from the case as a public record and shall release the information to the public upon a request under Colorado’s Open Records Act unless the CDLE Director makes a determination that the information is a trade secret.
How Does The New Law Work?
- After receiving a public records request and before releasing any information relating to the violation of the wage law, the CDLE Director shall notify the employer of the potential release of the information.
- The employer then has twenty days to provide the Director with further documentation demonstrating that the information, or specific matters included in the information, is a trade secret.
- If the CDLE Director, in his or her discretion, determines that the information, or any portion of the information, is a trade secret, the Director shall treat the information as confidential under the law.
- The definition of “trade secret” under Section 8-1-115 is the same as that under Colorado Revised Statute Section 7-74-102(4). That section defines “trade secret” as “the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession which is secret and of value. To be a ‘trade secret’ the owner thereof must have taken measures to prevent the secret from becoming available to persons other than those selected by the owner to have access thereto for limited purposes.”
Takeaway for Employers
First and foremost, since the CDLE Director has the sole discretion to determine what is and is not a “trade secret,” let’s hope that the Director understands the definition of “trade secret” and has the legal expertise to interpret and apply the definition to the documents submitted by an employer during a wage and hour complaint and investigation.
With that said, employers should work with legal counsel to evaluate their wage and hour documents and discuss any steps they may wish to consider taking to try and classify those documents as trade secret in order to protect them from disclosure in a public records requests.
Of course, employers should also regularly audit their wage and hour practices to ensure compliance with Colorado’s laws so that they can avoid wage and hour complaints and investigations in the first place.