Colorado Nearly Ended At Will Employment, and Most Employers Never Knew It Happened.

What Colorado Employers Need to Know About Initiative 43 and the Future of At Will Employment

By Kevin Welch, CEO & Founder, Journey Payroll & HR |
JourneyPayrollHR.com

Kevin Welch, CEO and Founder of Journey Payroll & HR, has spent almost 20 years helping Colorado employers navigate payroll compliance, HR policy, and the employment law changes that arrive every legislative session whether businesses are ready or not. This article reflects his perspective on what the 2026 session means for Colorado employers right now.

The Story Most Employers Missed

Picture Dana, who runs a sixteen person marketing agency in Fort Collins. One of her employees has missed three deadlines in two months despite a written warning and a documented performance improvement plan. Dana makes the call every employer eventually has to make. She lets the employee go.

Under the law Colorado has always had, that decision belongs to Dana. No lawsuit, no reinstatement order, no requirement that she prove her reasoning to a judge. That is what at will employment means, and it is the foundation nearly every Colorado employment relationship is built on.

I’m Kevin Welch, CEO and Founder of Journey Payroll & HR, and part of my job is watching for exactly the kind of shift that could upend a scenario like Dana’s before it turns into tomorrow’s headline.

Last year, that foundation came closer to shifting than most Colorado business owners ever realized.

What Is At Will Employment, Exactly

At will employment is the default legal relationship between employers and employees in Colorado, and in every state except Montana. It means an employer can end the employment relationship at any time, for almost any reason, or for no reason at all, as long as the reason is not illegal (discrimination based on protected characteristics, retaliation for protected activity, and similar exceptions still apply). The same freedom runs the other direction. An employee can leave a job at any time without needing to justify the decision to their employer.

At will employment does not mean employers can do whatever they want. Federal and state anti-discrimination laws, wage and hour laws, and any employment contract terms an employer has agreed to still apply. What at will employment does mean is that, absent one of those exceptions, an employer does not need a documented, legally defensible “just cause” to end the relationship.

That last part is exactly what last year’s ballot proposal set out to change.

What Initiative 43 Would Have Done

Initiative 43 was filed in March of last year by leaders at the Colorado AFL-CIO and SEIU Local 105, with backing from United Food and Commercial Workers Local 7. If it had reached voters and passed, it would have made Colorado the second state in the country, after Montana, to require just cause for most terminations.

Under the proposal, private employers with eight or more employees would have needed to point to one of a defined set of reasons before discharging or suspending an employee, generally covering things like documented substandard performance following notice and an opportunity to correct it, repeated policy violations, gross insubordination, and specific, documented economic circumstances affecting the employer. Employers would have had to provide written notice of the grounds for the decision within a set window. Employees who believed their termination did not meet that standard would have had 180 days to file a civil lawsuit, with reinstatement, back pay, front pay, and attorney’s fees all on the table as potential remedies.

This is a meaningfully different model from anything most Colorado employers operate under today. Right now, a well documented, legally sound decision to let someone go does not require proving a specific statutory justification in court. Initiative 43 would have added that requirement across a huge share of the state’s private employers.

How Close It Actually Came

Here is the part that deserves more attention than it got. Initiative 43 was not some proposal that got filed and quietly disappeared for lack of interest. It went through the process seriously.

The measure cleared Colorado’s Title Board, the state body that reviews ballot language for single subject compliance before signature gathering can begin. That approval happened the following month, and supporters began collecting the roughly 124,000 voter signatures needed to put it in front of Colorado voters in November 2026.

Then, last summer, the campaign withdrew Initiative 43. A competing initiative, Initiative 39, which would have made Colorado a right to work state, disappeared from the Secretary of State’s list within the same window, officially recorded as withdrawn in August of last year. The two withdrawals were connected. Jon Caldara, sponsor of the right to work measure, indicated publicly he would pull his initiative in response to the labor coalition’s moves, though labor leaders denied any formal deal. Both sides publicly connected their decisions to Governor Polis’s veto of Senate Bill 5, which sought to modify union organizing rules under the Colorado Labor Peace Act.

In other words, Initiative 43 did not fail. It was traded away as part of a larger political negotiation. Dennis Dougherty, executive director of the Colorado AFL-CIO, said at the time that the coalition was “taking a step back” to evaluate its options in light of that veto, not abandoning the underlying goal.

Why This Is Not Over

If you run a business in Colorado, the most important sentence in this article might be this one: the coalition that built Initiative 43 has already said, on the record, that it is looking at what comes next. That is not speculation on my part. That is their own public statement.

Ballot initiatives on labor issues tend to resurface, especially when the underlying disagreement (in this case, a dispute over Colorado’s union organizing rules that has not been resolved) remains active. Colorado employers who assume this topic is settled because nothing happened in 2026 are making the same mistake employers made with several other compliance changes I have written about in this space. The absence of headlines does not mean the absence of momentum.

This is exactly the kind of shift I want Colorado employers thinking about before it becomes urgent, not after.

What Colorado Employers Should Do With This Information Today

To be clear about where things stand: Colorado is an at will employment state right now, and nothing about that has changed. There is no new documentation requirement, no new termination process, and no new legal exposure tied to Initiative 43 itself, because it never became law.

What I would encourage every Colorado employer to do is simpler and lower stakes than people assume. Get in the habit of documenting performance issues and policy violations as they happen, not after you have already decided to let someone go. This is already good practice for Colorado employers today, and it is one of the strongest protections against wrongful termination claims under the laws currently in place, including discrimination and retaliation protections. If a version of just cause employment does return to a future ballot, employers who already document consistently will have the easiest transition by far.

If your business is navigating an actual termination decision that feels legally complicated, that is a conversation for a Colorado employment attorney, not a payroll company. Journey Payroll & HR works with a number of trusted Colorado employment attorneys and is glad to make an introduction when a situation calls for one. Journey’s HR team is also a resource if you want to think through how a policy or documentation practice should work in the meantime.

You can track the official status of Initiative 43 and any related filings directly through the
Colorado Secretary of State’s ballot initiative results page
and the
Colorado General Assembly’s initiatives filed page.

The Bottom Line

Colorado came closer to ending at will employment last year than most employers ever knew. It did not happen, and today’s law has not changed. But the coalition behind that effort is still organized, still motivated, and has already said it is looking at what comes next. Colorado employers who start documenting well now, and who keep an eye on this space, will be the ones who are ready no matter what the next ballot cycle brings.

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