Tag Archives: How much is a wrongful termination case worth?

“What Is My Case Really Worth?” Part One-Title VII and ADA Employment Cases

The focus of this post is on the remedies available for Title VII (gender, race, national origin, religion discrimination) and ADA (disability) cases.  Title VII gender cases also include sexual harassment and pregnancy discrimination.

Some, if not most, damages that are routinely awarded in Title VII and ADA cases (i.e. compensatory AND punitive damages, but not back pay) are capped pursuant to federal law in employment discrimination cases under Title VII and the ADA.  People often associate lawsuits with their perception of what they see on television; i.e. millions of dollars for a product liability case or hundreds of thousand dollars for a car wreck or personal injury case. In such scenarios, Hollywood’s portrayal is different than what actually happens.  Multi-million dollar awards in non-class action employment discrimination cases are rare, particularly those that are not class based, are rather rare.  Even if an employee prevails on a Title VII or ADA claim at trial, the employee still cannot recover more compensatory or punitive damages than allowed by the federal caps on the same.  So what are these “caps”?  The caps depend on how many total employees your old employer has during the current or preceding calendar year, but here is the basic breakdown based upon the number of employees who work for a given employer:

15-100 employees:    $50,000.00

101-200 employees:  $100,000.00

201-500 employees:  $200,000.00

500 plus employees:  $300,000.00

But wait, what are compensatory and punitive damages?  Why don’t these caps apply to them? Compensatory damages are often referred to as actual damages. They can include emotional distress, pain and suffering (grief, anxiety, depression, embarrassment), medical bills, and mental impairment.  Compensatory damages typically require proof of mental health or psychiatric treatment.  Punitive damages are commonly referred to as “punishment damages” and punish the company, in an employment-related case, for the wrong-doing. The overall idea is that, at least hopefully, punitive damages will prevent an employer from committing the same offenses against other employees in the future.  In order to obtain punitive damages, an employee must prove that the employer acted with malice or reckless indifference.  Punitive damages are very rarely awarded by courts.  Also, punitive damages, along with any awarded compensatory damages, are capped by the amounts set forth above.  The cap does not, however, apply to back pay damages.

BACK PAY

One could call back pay the most significant damage or remedy available in employment law litigation.  The caps mentioned above do not apply to back pay.  Back pay includes all of the wages, salary, bonuses, commissions, and benefits (health insurance, 401k, paid time off, life insurance, etc.) lost because of termination or discrimination minus any amount an employee earned in the interim.  Back pay also includes interest, overtime, shift differentials, and raises an employee would have received had he or she not been terminated.

One thing that is sometimes difficult for employees to understand is that their back pay is cut-off and stops if they get a new job making the same amount of money (or more) as their old job.  For example, if you are terminated on December 1st but get a new job making the same amount or more one week later, you would be entitled to back damages for one week of pay only.  On the other hand, if you are unemployed for a year and, despite your diligent attempts, cannot find a new job comparable to your old job, then your back pay would most likely be for one year. Employees absolutely have to keep looking for jobs and submitting applications while at all stages of litigation. An employee’s continuous search for subsequent comparable employment is a crucial part of mitigating damages.

Also worth noting, if an employee accepts a new job with a lower salary than his old job, then he is nevertheless still entitled to the difference in wages between the old higher paying job and new lower paying job. For example if an employee was making $50,000 per year as a store manager before being terminated, but then two months later finds a new job as an assistant manager at a smaller store making $35,000 per year, the employee would be entitled to back pay for the full two months while he wasn’t working, plus $15,000 annually thereafter (the difference between the old and new job) until the matter is resolved.

FRONT PAY

Front pay is available at the court’s discretion for employees who are still unemployed and where it appears unlikely that the employee will be able to get a new job for some time into the future.  The court estimates how long it will likely be before the employee finds subsequent employment that is comparable, both in terms of pay and job status, to the job he was terminated from. Unlike back pay, front pay is determined by the judge and just because an employee is awarded back pay does not mean that he will also be awarded front pay.

ATTORNEY’S FEES

Reasonable attorney’s fees are covered by Title VII and the ADA, if the employee prevails.

REINSTATEMENT

Although most employees would probably not be too interested in going back to go back to work for the employer that discriminated or retaliated against them, reinstatement to an old position is indeed an available remedy in some matters. Of course this often requires an employer to return to work for an employer that they have possibly filed a lawsuit against, which, as one would imagine, could create a less than comfortable working situation for both the employer and the employee. For this reason, reinstatement is often not a practical remedy in many situations, quite often due to the sheer animosity existing between the parties.

MEDIATION

Mediation is a good thing and most cases in the South Carolina federal district courts must be mediated.  At mediation both sides are encouraged to come to a compromise to help alleviate the risks of a trial that exist for both sides.  At the end of the day, if you go to trial, there is always a real risk that a jury will side with the employer and you will recover nothing.  On the flip side, there is a chance that a jury will side with the employee and award significant damages to the employee.  Unlike trial by jury, mediation allows both sides to structure a settlement that they can live with and helps eliminate the uncertainty of trial.  Both sides are required to negotiate in good faith.  There can also be tax incentives to structuring a settlement out of court.

SUMMARY

In a typical ADA or Title VII case, you are likely to be awarded your back pay, if you prevail.  If you can prove compensatory damages by proof of mental health treatment records or witness statements, you may also get damages up to the statutory caps set forth above.  Punitive damages are rare in the context of employment cases but can be awarded, subject to the caps.  Front pay is sometimes available for employees who are still unemployed and are unlikely to become reemployed for some time into the future, but this is at the court’s discretion.  All cases must be mediated in federal court and a settlement allows both sides to work out a compromise and gives the ability to control the outcome of the matter.