Laid-off Denver employees must give up right to sue to get severance
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A drop-off box for laid-off Denver city employees to return their work equipment sits in the lobby of the Wellington E. Webb Municipal Office Building on Monday. Photo: Alayna Alvarez/Axios
Newly laid-off city workers must forfeit their right to sue to receive severance pay under Mayor Mike Johnston's administration, city documents show.
Why it matters: Legal waivers like this are fairly standard in public and private sectors — but the requirement raises questions about transparency and fairness, especially for workers forced to choose between financial relief and the ability to challenge a potentially unlawful firing.
By the numbers: The city is laying off 171 people (about 1.6% of Denver's roughly 11,000-employee workforce) and eliminating a total of 928 positions — most of which are currently vacant, Johnston's office revealed Monday.
- The reductions are projected to save $100 million toward closing the city's $200 million budget gap in 2026.
Driving the news: Laid-off employees are being told that to receive severance, they must sign a legal waiver within 30 days — 45 days if they're over age 40 — giving up their right to sue the city.
Between the lines: Johnston ran for mayor in 2023 as Denver's progressive favorite, drawing key endorsements from labor unions. Now, as his administration shields the city from legal fallout because of the cuts, some local union leaders and social justice advocates say he's betraying city staff.
Catch up quick: The city is conducting its first round of layoffs since 2011 to address its budget shortfall. The cuts began Monday and are expected to continue through at least Tuesday.
- Denver officials haven't said which departments will be affected.
- The severance package for laid-off employees includes 30 days of paid administrative leave, two to eight weeks of lump-sum pay and additional transition benefits.
State of play: Some City Council members are already pressing the administration on potential legal exposure.
- In a meeting last week, one asked the mayor's team if it calculated the cost of potential lawsuits challenging the layoffs. The answer was no.
- Officials said any settlements would come from Denver's liabilities and claims fund — fueled by transfers from the general fund. If that runs dry, the city would dip into contingency dollars.
- The financial risk is shared by the city's taxpayers, who shoulder the cost of severance and any future legal settlements.
What we're watching: Labor rights advocate Lisa Calderón recently told Denver7 that she's spoken to city workers and local attorneys who are considering class action lawsuits.
- "I really want to encourage city employees to fight for their rights, to know that they have rights, and if they feel that their due process rights are violated, they have a right to sue," Calderón said.
Editor's note: This story has been updated with the number of city positions the Johnston administration is eliminating.
Go deeper: Denver layoffs include longtime employee suing city for discrimination