Between plaintiffs who think their case is worth more than the law contemplates, and defendants who believe exactly the opposite, the measure of damages is often a thorny topic. This is perhaps most true in employment cases, where the alleged wrongful termination will be based on discrimination or retaliation and emotions run high.
The first thing to keep in mind is that employees who are fired and claim wrongful termination have a duty to mitigate their damages. That means that they must diligently look for new employment. The law, like Heaven, helps those who help themselves.
The measure of damages is then the difference between the employee’s earnings at the former employer and his or her new earnings. That will equate to the whole amount the employee used to earn if he was unable to find a new job despite looking in earnest (damages = prior earning – zero), or the difference between the two rates of pay if the employee finds a new job that pays less. There are no damages to be awarded if the employee quickly finds another job that pays more.
The next question is, what will be included in “earning.” Often enough, that will include overtime, bonuses, and commissions. It will sometimes include fringe benefits like 401(k) matching or health insurance. The devil is in the details and it will ultimately depend on the circumstances of each case and the case law in the jurisdiction. Regardless, the damages will be calculated from the date of termination through the date of the judgment.
In rare cases, exemplary or punitive damages may be awarded. Also in rare cases, courts have awarded “front pay,” damages for continuing injury after the trial to the extent they are tied to the employment termination. And again rarely, some parties have recovered their attorneys’ fees. It bears repeating once more that such awards are quite unusual.
Throughout the conduct of a case, from the first consultation with either a plaintiff or defendant, to negotiating potential settlements during the course of litigation, a crucial part of the relationship between client and attorney involves communicating about and understanding the financial amounts at stake.
Tell your kids… even in law, there’s math involved!