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Wrongful Termination Cases – Damages

By on September 11, 2015

If you sue a former employer for wrongful termination, you are asking the jury to award you money, called damages. Monetary damages are usually the only remedy available in a wrongful termination lawsuit.

But the jury doesn’t just hand over a big pot of cash. The purpose of monetary damages is to make you whole: to compensate you for what you lost because of the employer’s actions. You will have to prove not only that you suffered losses because of the employer’s wrongful actions, but also the amount of those losses.

What Are Damages? 

Wrongful termination cases are civil lawsuits. If you file a civil wrongful termination lawsuit, you (the plaintiff) are asking the court to order your former employer (the defendant) to pay money to compensate you for losses caused by the termination. This compensation is called damages. But, you cannot simply waltz into court and ask for “one million dollars” (to quote Dr. Evil); rather, you have to prove the amount of various types of losses you suffered at trial.

Here are the main elements of monetary damages that you may recover if you win a wrongful termination lawsuit.

The Mitigation Of Damages 

The following are the most general factors a court looks at when assessing the duty to mitigate damages:

  • Before projected earnings from other employment opportunities not sought or accepted by the discharged employee can be applied in mitigation, the employer must show that the employment was comparable, or substantially similar, to that of which the employee has been deprived.
  • The employee’s rejection of, or failure to seek, other available employment of a different or inferior kind may not be resorted to in order to mitigate damages.
  • The deprivation of infringement of an employee’s rights held under an original employment contract converts the available other employment relied upon by the employer to mitigate damages, into inferior employment which the employee need not seek or accept.

Back Pay

Back pay and benefits are among the types of damages most typically awarded in successful employment cases. Back pay includes all of the wages, salary, bonuses, commissions, and benefits lost because of an unlawful dismissal or discrimination, minus any amount the employee was able to earn in the interim. This offset is known as “mitigation,” which is explained in more detail on our site’s page on mitigation.

Back pay includes much more than your salary or wages. It includes interest, overtime, shift differentials, and raises you would have received. The value of employer-provided housing lost because of the discrimination is part of a back pay award. Back pay is calculated from the date of the discrimination or job loss to the date of the court’s decision.

Front Pay

Front pay is a form of damages awarded in some employment claims involving wrongful terminationor other kinds of workplace disputes. It usually represents the amount of wages that an employee would have earned if they were to be reinstated to the job they were wrongfully fired from or if they were promoted to a position that they were denied.

Often, front pay is awarded as a form of compensation for wages that the former employee would have received if they had otherwise been employed during the period between a court judgment and reinstatement to the prior job title if they had been reinstated. It is very similar to back pay, except that it is awarded primarily in instances where reinstatement is not possible.

Lost Pay

What earnings have you lost because you were fired? This element of damages includes the pay you would have received if your employer had not fired you, as well as any earned and unpaid wages, overtime, or other compensation the employer has withheld.

However, this amount is reduced by any money you earned after being terminated. If you get re-hired at the same or a higher rate of pay at some point after the termination, you won’t have any more lost pay as of the date of re-hire. If you get re-hired at a lower rate of pay, you will continue to have lost pay damages, equal to the difference between what your old job paid and what you are earning at your new job. For example, if you are out of work for one month, you count that full month of lost pay at the former pay rate. If you get a new job but are paid $1,000 per month less than at the former job, your lost pay damages continue to add up at the rate of $1,000 per month. Lost bonuses may also be a part of this element of damages.

Lost Benefits

The value of lost employment benefits is also an element of your damages from a wrongful termination. Because the cost and value of benefits can be difficult to quantify in dollar terms, you might need an expert to evaluate exactly how much you’ve lost for trial. This element includes medical and dental insurance, pension or 401k plans, stock options, and profit sharing, among other benefits. Because disability and unemployment benefits are not considered in quantifying damages in wrongful termination cases, employees need not be fearful of applying for and obtaining california unemployment benefits.

Contemporary Damages

The purpose behind compensatory money damages is that they are intended to make you “whole.” Compensatory damages are also called actual damages. In employment cases, they refer to the damages that are harder to measure, such as the following:

  • Emotional distress
  • Pain and suffering (such as grief, fright, anxiety, humiliation, and depression)
  • Permanent disability
  • Mental impairment
  • Medical bills

In employment discrimination cases brought under the federal antidiscrimination law, Title VII, the compensatory and punitive damages (but not back pay) that a jury could award to plaintiffs for discrimination are capped. If the employer has

  • 15-100 employees, the cap is $50,000
  • 101-200 employees, the cap is $100,000
  • 201-500 employees, the cap is $200,000
  • 500 employees and up, the cap is $300,000

Other types of cases, and cases brought under some state laws may not be subject to these caps, however.

Punitive Damages

Punitive damages are an amount the employer is ordered to pay for actions that are particularly egregious. Unlike other kinds of damages, which are intended to reimburse you for losses, punitive damages are intended to punish the employer and deter similar behavior by others in the future.

Punitive damages are not available for all wrongful termination claims and are not available in some states. In general, punitive damages are difficult to recover even where they are available, and impossible to quantify in advance. You may have to satisfy a greater burden of proof at trial in order to win punitive damages. And, even if these damages are available and you have met the burden of proof, the amount of such damages is entirely up to the jury.

Attorney Fees

Some types of employment-related claims may entitle you to an award of attorney’s fees. Most do not. In many (but not all) wrongful termination cases, your attorney will take the case on a contingent fee basis. This means the attorney will be paid a set percentage of what you win.

Practical Considerations

Anyone considering filing a lawsuit must do a cost/benefit analysis. You may have solid-gold legal claims, but a lawsuit may not be justified if you have very modest damages. Lawsuits are expensive, time-consuming, emotionally trying, and very risky. If you haven’t suffered many actual losses from being fired, a lawyer may advise against litigation, simply because what you’re likely to “win” in court won’t be worth what it would cost to get it.

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