Ballot Initiative Would Eliminate At-Will Employment in Colorado
March 20, 2025
By: Colin A. Walker
In the 2026 election, Colorado voters will be presented with a ballot initiative that would eliminate at-will employment in Colorado. Currently, employers and employees both have the right to terminate the employment relationship at any time, without prior notice, for any reason or no reason at all (as long as it is not for an unlawful reason, such as discrimination). This has been the law in Colorado, and in all states, except Montana, for time immemorial. There are many sound reasons for this. The employment relationship is a special, personal relationship, which requires employees and manager to work together closely on issues such as business strategies and tactics, which cannot always be clearly identified or articulated, yet are critical to a productive employment relationship. Sometimes, “it just isn’t a good fit.” The law has always recognized that both parties should have the right to terminate the employment relationship without a specific reason. However, that may soon change.
A group of labor unions has introduced a ballot initiative, Initiative 2025-2026 #43, which would require private-sector employers in Colorado with eight or more employees to show “just cause” to terminate employment, or suspend an employee without pay. The law would not apply to employees who have a written employment contract with a just cause provision that provides substantially the same or greater protection than the law, including collective bargaining agreements. Just cause is defined as:
- Substandard performance of assigned job duties following notice and an opportunity to cure;
- Material neglect of assigned job duties;
- Repeated violations of the employer’s 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,
- Discharge or suspension due to specific economic circumstances that directly and adversely impact the employer and are documented by an employer.
The employer would have to provide the employee with a written notice setting forth every reason supporting the just cause within seven days of the termination or suspension. The employee, on the other hand, could quit at any time, without prior notice, for any reason or no reason, without penalty.
The law would allow an employee terminated without just cause to sue and, if successful, recover damages such as back pay (the compensation the employee would have earned from the time of the termination without just cause to the time of the court’s judgment), front pay (the compensation the employee would have earned from the time of the judgment until the court found that the employee should have found equivalent employment), costs, interests and attorneys’ fees. In addition, the court could order reinstatement, i.e., order the employer to re-hire the employee. However, the law would not allow the employee to recover amounts that the employee should have earned elsewhere. For example, if the employee obtained equivalent, or better, employment at the same or greater rate of pay the same day as the termination, there would be no monetary recovery. Reinstatement and an award of attorneys’ fees, however, would still be possible.
Noticeably absent from the law is a “safe harbor” for the employer to terminate the employment relationship without just cause if it pays the employee a specified sum of money, such as, perhaps, one week of compensation for each year of service. For example, if the employer wanted to terminate the employment of an employee who had worked for it for 10 years without just cause, it could do so, but it would have to pay the employee 10 weeks of compensation. The new law has no such provision or any other method for an employer to terminate an employee without just cause after six months of employment. Of course, the employer and employee could work out a settlement. However, with no clear measure or limit of damages, and the right to recover costs, interests, and attorneys’ fees—and the possibility of reinstatement—the employee would have enormous leverage.
While the labor unions have said that the purpose of the initiative is to protect Colorado workers, it may have more to do with a looming fight in the Colorado legislature about amending the Colorado Labor Peace Act. Democratic legislators have introduced a bill, Senate Bill 5, that would make it easier for unions to require workers in a “union shop” to pay union dues, even if they are not members of the union. Apparently in response to this, another ballot initiative has been proposed which would amend the Colorado Constitutional to prohibit requiring non-union workers to pay union dues. The just cause initiative may be a response to that initiative.
At-will employment has worked not just in Colorado but across the country for many years. Employers and employees both expect to be able to terminate the relationship, without explaining their reasons, if it isn’t working out for them. Furthermore, employment laws such as the Colorado Anti-Discrimination Act, the Colorado Wage Claim Act, Title VII of the Civil Right Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Fair Labor Standards Act, and a myriad of other employment laws protect employees from wrongful termination. In addition, employees can negotiate additional protection and benefits by insisting on written employment contracts with such provisions—and many do. Finally, such a radical departure from established employment law and practice in Colorado, in contrast to nearly every other state in the country, would be a great disincentive to employers who are considering establishing or expanding operations and hiring employees in Colorado. Eliminating at-will employment would be very unwise.