Vote No On Amendment 55

If you are a Colorado voter, you have a very important choice to make this Fall on Amendment 55.  You will be asked approve an amendment to the state’s constitution effectively ending "at will" employment arrangements.

From the Faegre law firm:

"Colorado voters are being urged to approve a constitutional amendment this fall that would drastically change the at-will rule of employment in the state.

Amendment 55—recently approved by the Colorado secretary of state for addition to the November 4 ballot—would require employers to establish just cause prior to discharging or suspending an employee. Proponents of this initiative submitted over 130,000 signatures with the petition, well above the minimum number of signatures required.

If this amendment is approved, employers seeking to suspend or discharge employees or planning a reduction in force will need to prepare and retain a significant amount of documentation that is not currently required. Further, employers could be subject to civil actions by employees who believe they were suspended or discharged without just cause."

This amendment, if approved, could have a larger impact on the state’s economy than any presidential choice.  Before I get a bunch of hate mail claiming that I hate workers’ rights, please consider the following:

1. Never in my ten years of being a lawyer / VC have I ever been involved in a "for cause" firing.  Each time "for cause" is even alleged, the employees hires a lawyer and the company spends time and money defending itself.  While it might sound nice, "cause" is a very vague word, no one really knows what it means and it will only cause a ton of litigation.  The only clean way of dealing with this issue is having "at will" employment arrangements;

2. Partly because of 1, above, but also due to the increased need of paperwork, the only real winners with this proposed change will be lawyers; and

3. Most importantly, this will have an extremely negative effect on small businesses in Colorado.  Small businesses will not take the risk of hiring folks that they can not easily terminate in the case of a downturn in business or debatable individual performance. Most small businesses will hire more carefully and more conservatively because of fears that they won’t be able to make cuts if needed.  Without taking some hiring risks, Colorado companies will not have the advantages of growing quickly like companies in other states. 

I can’t believe how anyone would think mimicking Germany or France’s employment laws will make us more competitive.  I would highly recommend reading the full text here.  Thanks to Alan Kaplan for sending me the link.  VOTE NO ON 55.