Supreme Court Hears Arguments to Sort Out CWCA

Case over state wage claims ‘affects all employers and employees in Colorado’

Colorado’s wage claim law has a statute of limitations that reaches back only as far as three years. But courts can’t seem to agree whether that statute of limitations actually bars any unpaid wage claims once an employee is fired.

The trouble is that the Colorado Wage Claim Act could be construed as having conflicting sections — one stating a statute of limitations on unpaid wage claims and another that declares all unpaid wages due upon termination. This confusion arose in a case where migrant farm workers are suing a Platteville-based farm owner for unpaid overtime, among other allegations. The plaintiffs say the CWCA entitles them to all unpaid wages throughout the time they worked there, which for three of them was from 1992 to 2016.

The Colorado Supreme Court is now looking at whether the CWCA allows an employee, once terminated, to sue the employer for all past-due wages owed even if the law’s statute of limitations would otherwise bar the claim and regardless of how long ago those wages should have been paid. State and federal courts have varied on this issue, but the Supreme Court has a chance to limit the amount of damages employers face in individual CWCA suits.

The case at hand, Hernandez, et al. v. Ray Domenico Farms, et al., didn’t get to the Supreme Court by appeal. Rather, District Judge William Martinez of the District of Colorado sua sponte asked the Supreme Court to take up the issue in April after each party filed for summary judgment. In the order certifying the question to the Supreme Court, Martinez said the apparent conflict “affects all employers and employees in Colorado.” 

Like its federal counterpart, the Fair Labor Standards Act, the CWCA allows plaintiffs to sue employers for minimum wage and overtime violations and likewise has a statute of limitations of two years, which stretches to three years in case of a willful violation. Plaintiffs tend to bring CWCA claims alongside federal wage theft claims, which is why federal judges like Martinez often have to deal with the state statute.

The plaintiffs in Domenico Farms can’t seek unpaid wages going back to the beginning of their employment under the FLSA, but they argue that they can under the CWCA, which Martinez acknowledged is where the “real money” is.

Section 103 states that earned wages become due and payable 10 days after the end of a pay period. But Section 109 says that when an employee is terminated, all of that employee’s unpaid compensation becomes due immediately. Employees have taken that to mean fired employees are entitled to any unpaid wages they might have incurred over the course of their employment, not just within two to three years.

In oral arguments on Wednesday, plaintiff’s counsel Andrew Turner argued that the CWCA gives two different causes of action — one under 103 while the plaintiff is still employed and the other under 109 that is triggered once they are fired. Turner also argued that it wasn’t absurd but instead rational for the statute to give “two opportunities to collect the same payment.” Many employees may find it impossible to sue a current employer for unpaid wages, he said.

Justice William Hood asked why the CWCA only requires employers to keep pay-related records for three years — in line with its statute of limitations — if the intention is for claims to potentially reach back much further. Turner replied that the record retention period relates to the Colorado Division of Labor’s standard of practice, not the statute itself.

Section 109 also addresses wage claims by employees who quit, in addition to those who are terminated. 

“The idea that if an employee quits, then the wages we are talking about in 109 are due on the next payday, that sounds to me like what the legislature was thinking of was [that] the wages that are still due from that last pay period, rather than all wages that might have been due at any time,” Justice Melissa Hart commented.

In his reply, Turner said Section 103 and 109 use the same definition of wages and compensation, so if it’s understood to be just for the last pay period in 109, then that would have to be true of 103 as well.

Arguing for the defendant, attorney Leah Vanlandschoot asked the court to hold that the cause of action for unpaid wages accrues only once — the date those wages become due — and that Section 109 doesn’t revive time-barred wage claims. 

“There is no second bite at this apple,” she said.

“The court should interpret the statute of limitations consistent with its purpose of promoting justice, avoiding unnecessary delay and preventing the litigation of stale claims,” Vanlandschoot said. “A holding that Section 109 can undo the statute of limitations on a 103 unpaid wages claim directly rejects these purposes.”

Hood asked why the stale claims issue should take priority over “the broad remedial purpose” of the CWCA. “Why shouldn’t the concern about migrant farm workers getting stiffed be a bigger concern than stale claims?”

Vanlandschoot replied that the legislature made the determination when it enacted the CWCA.

“They could have easily said, instead of ‘shall be brought within two years, or three years if willfulness is proved, and not after that time,’ they could have said ‘within two years or three years of the separation of employment,’ and that would have encompassed everything,” Vanlandschoot argued. “They didn’t do that.”

— Doug Chartier

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