When an employee is terminated from their job in a manner that violates legal provisions, it’s not just an emotional blow but also a significant financial strain.
In such cases, the wronged employee has the right to seek legal remedies, which often take the form of wrongful termination settlements.
This article aims to explore the concept of wrongful termination, how settlements are calculated, and the types of damages that can be claimed in these cases.
What is a Wrongful Termination Lawsuit?
A wrongful termination lawsuit arises when an employee believes they have been fired in violation of local, state, or federal anti-discrimination laws, labor laws, or terms of the employment contract.
This could include dismissal based on race, sex, religion, disability, or retaliation for whistleblowing, among other reasons.
The lawsuit serves as a formal claim against the employer for the unlawful action and seeks compensation for the damages caused by the termination.
How are Wrongful Termination Settlements Calculated?
Calculating a wrongful termination settlement involves several factors. First, the financial losses directly related to the termination are considered. These losses include lost wages and benefits, any medical expenses incurred due to stress-related illnesses, and even job search costs.
Secondly, non-economic damages like emotional distress caused by the termination are factored in. Depending on the jurisdiction, punitive damages may also be included if the employer’s conduct was particularly egregious.
Lastly, the strength of your case plays a crucial role in the settlement amount. Strong evidence of wrongful termination can lead to higher settlements. It’s advisable to consult with an experienced employment lawyer who can help assess the value of your case accurately.
Types of Damages in a Wrongful Termination Case
Loss of Earnings
Loss of earnings refers to the income you would have earned had you not been wrongfully terminated. This includes not just your base salary, but also bonuses, commissions, and raises you reasonably expected to receive.
Loss of Benefits
Benefits lost due to wrongful termination can also be claimed. These benefits might include health insurance, retirement plans, stock options, and any other perks that formed part of your compensation package.
Medical Expenses
If the wrongful termination resulted in physical or psychological harm necessitating medical treatment, these expenses could be included in your claim. For example, if you required therapy or medication to manage stress or depression resulting from the termination, those costs could be included in your settlement calculation.
Cost of Job Search
The process of job searching after wrongful termination often incurs costs. Expenses may include travel to interviews, resume preparation services, job placement agency fees, and more. These costs are typically recoverable in a wrongful termination lawsuit.
Pain & Suffering
The emotional toll of wrongful termination is not insignificant. The stress, anxiety, and depression that can result from such an experience are considered “pain and suffering,” a non-economic damage. It’s more challenging to quantify than lost wages or medical bills, but it’s nonetheless a critical component of your claim.
Punitive Damages
Punitive damages are awarded in cases where the employer’s conduct was exceptionally malicious or reckless. They’re designed not just to compensate the victim, but to punish the guilty party and deter similar behavior in the future. However, punitive damages aren’t available in all jurisdictions or all cases, so it’s essential to consult with an attorney to understand if they apply to your situation.
Attorney Fees
In many wrongful termination cases, if the plaintiff is successful, the court may require the defendant (the employer) to cover the plaintiff’s attorney fees. This rule encourages wronged employees to seek legal help and serves as a further deterrent for employers considering unlawful actions.
Liquidated Damages
Liquidated damages are predetermined damages stipulated in a contract, to be paid in the event of a breach (like wrongful termination). If your employment contract includes a clause for liquidated damages, these could significantly impact your settlement amount.
Average Wrongful Termination Settlement Amounts
The average settlement amount in wrongful termination cases varies widely, largely due to the unique circumstances of each case. Factors influencing the amount include the employee’s salary, the egregiousness of the employer’s conduct, the strength of the evidence, and whether punitive damages are awarded.
While some cases may settle for amounts in the low thousands, others may reach into the hundreds of thousands or even millions, especially in cases involving high earners or particularly egregious behavior by the employer. Legal advice from an experienced employment lawyer is crucial in helping you understand what you might expect from a settlement.
Proving Damages in Wrongful Termination Claims
Proving damages in wrongful termination claims can be a complex process. It requires quantifying both economic and non-economic losses caused by the unlawful dismissal.
Economic damages are often the most substantial component of a wrongful termination case. They include elements like loss of earnings, loss of benefits, medical expenses, job search costs, and sometimes, liquidated damages if stipulated in a contract. To estimate your economic damages, you must compute your total annual compensation, including salary, bonuses, and commissions, and project that over the period you have been (or will be) unemployed due to the termination.
Non-economic damages, such as pain and suffering, are more challenging to quantify but equally important. You’ll need to provide evidence of the emotional distress you’ve experienced, possibly through medical records or testimony from a mental health professional.
In some cases, you may also claim punitive damages. To do so, you’ll need to prove that the employer’s conduct was particularly malicious or reckless.
It’s important to note that every element of damages claimed must be proven with reasonable certainty. Speculative or hypothetical losses are not typically recoverable.
You May Need a Forensic Economic Expert Witness to Testify at Trial
In many wrongful termination cases, especially those involving substantial claims or complex economic calculations, you may need a forensic economic expert to testify at trial. This expert can provide an objective assessment of your financial losses, considering factors like future earning capacity, the value of lost benefits, and the impact of unemployment on your career progression.
The expert witness can also help the court understand more abstract damages, like the value of lost job security or the impact of the termination on your overall job marketability. Their testimony can lend credibility to your claims and aid in securing a fair settlement.
Remember, wrongful termination claims can be complicated, and navigating them without legal help can be challenging. It’s advisable to seek counsel from an experienced employment lawyer who can guide you through the process and help maximize your recovery.
How to Find a Wrongful Termination Lawyer in Each US State
Finding a wrongful termination lawyer can be a daunting task, especially considering the vast number of states in the U.S. and their unique laws.
However, with the right approach and resources, you can find the best legal representation for your wrongful termination case. Here is a guide on how to find a wrongful termination lawyer in each of the 50 states:
Alabama
The first step in finding a wrongful termination lawyer in Alabama is to contact a labor and employment lawyer at one of Morgan & Morgan’s Alabama offices. You can also explore other online resources like FindLaw, Super Lawyers, or LawRina which provide comprehensive lists of top-rated wrongful termination attorneys in Alabama.
Alaska
For Alaska, visit the Alaska Bar Association’s lawyer referral service or use online lawyer directories like Avvo and Justia.
Arizona
Check out the Arizona State Bar’s Find a Lawyer service or browse through employment lawyers on Lawyers.com.
Arkansas
In Arkansas, the Arkansas Bar Association provides a lawyer referral service. You can also use online platforms like LegalMatch.
California
Explore the California State Bar’s attorney search tool or visit sites like Nolo and LegalZoom.
Colorado
Use the Colorado Bar Association’s Find a Lawyer service or check out local law firms online.
Connecticut
Visit the Connecticut Bar Association’s lawyer referral service or use lawyer review sites like Martindale-Hubbell.
Delaware
For Delaware, use the Delaware State Bar Association’s lawyer referral service or explore online resources like Thumbtack.
Florida
In Florida, visit the Florida Bar’s lawyer referral service or use online platforms like UpCounsel.
Georgia
The State Bar of Georgia provides a lawyer referral service. You can also use online resources like LawTally.
Hawaii
Visit the Hawaii State Bar Association’s lawyer referral service or check out local law firms online.
Idaho
In Idaho, use the Idaho State Bar’s lawyer referral service or explore online platforms like Justia.
Illinois
The Illinois State Bar Association provides a lawyer referral service. You can also use online resources like Avvo.
Indiana
For Indiana, visit the Indiana State Bar Association’s lawyer referral service or use online platforms like LegalMatch.
Iowa
In Iowa, the Iowa State Bar Association provides a lawyer referral service. You can also use online resources like Lawyers.com.
Kansas
Use the Kansas Bar Association’s lawyer referral service or visit sites like Nolo and LegalZoom.
Kentucky
For Kentucky, visit the Kentucky Bar Association’s lawyer referral service or use online platforms like Thumbtack.
Louisiana
In Louisiana, the Louisiana State Bar Association provides a lawyer referral service. You can also use online resources like UpCounsel.
Maine
Use the Maine State Bar Association’s lawyer referral service or check out local law firms online.
Maryland
For Maryland, visit the Maryland State Bar Association’s lawyer referral service or use online platforms like LawTally.
Massachusetts
In Massachusetts, the Massachusetts Bar Association provides a lawyer referral service. You can also use online resources like Justia.
Michigan
Use the State Bar of Michigan’s lawyer referral service or visit sites like LegalMatch.
Minnesota
For Minnesota, visit the Minnesota State Bar Association’s lawyer referral service or use online platforms like Avvo.
Mississippi
In Mississippi, the Mississippi Bar provides a lawyer referral service. You can also use online resources like Lawyers.com.
Missouri
Use The Missouri Bar’s lawyer referral service or check out local law firms online.
Montana
For Montana, visit the State Bar of Montana’s lawyer referral service or use online platforms like Nolo.
Nebraska
In Nebraska, the Nebraska State Bar Association provides a lawyer referral service. You can also use online resources like LegalZoom.
Nevada
Use the State Bar of Nevada’s lawyer referral service or check out local law firms online.
New Hampshire
For New Hampshire, visit the New Hampshire Bar Association’s lawyer referral service or use online platforms like Thumbtack.
New Jersey
In New Jersey, the New Jersey State Bar Association provides a lawyer referral service. You can also use online resources like UpCounsel.
New Mexico
In New Mexico, the State Bar of New Mexico provides a lawyer referral service. You can also use online resources like Justia.
New York
Use the New York State Bar Association’s lawyer referral service or visit sites like LegalMatch.
North Carolina
For North Carolina, visit the North Carolina Bar Association’s lawyer referral service or use online platforms like Avvo.
North Dakota
In North Dakota, the State Bar Association of North Dakota provides a lawyer referral service. You can also use online resources like Lawyers.com.
Ohio
Use the Ohio State Bar Association’s lawyer referral service or check out local law firms online.
Oklahoma
For Oklahoma, visit the Oklahoma Bar Association’s lawyer referral service or use online platforms like Nolo.
Oregon
In Oregon, the Oregon State Bar provides a lawyer referral service. You can also use online resources like LegalZoom.
Pennsylvania
Use the Pennsylvania Bar Association’s lawyer referral service or check out local law firms online.
Rhode Island
For Rhode Island, visit the Rhode Island Bar Association’s lawyer referral service or use online platforms like Thumbtack.
South Carolina
In South Carolina, the South Carolina Bar provides a lawyer referral service. You can also use online resources like UpCounsel.
South Dakota
In South Dakota, the State Bar of South Dakota provides a lawyer referral service. You can also use online resources like Justia.
Tennessee
Use the Tennessee Bar Association’s lawyer referral service or visit sites like LegalMatch.
Texas
For Texas, visit the State Bar of Texas’s lawyer referral service or use online platforms like Avvo.
Utah
In Utah, the Utah State Bar provides a lawyer referral service. You can also use online resources like Lawyers.com.
Vermont
Use the Vermont Bar Association’s lawyer referral service or check out local law firms online.
Virginia
For Virginia, visit the Virginia State Bar’s lawyer referral service or use online platforms like Nolo.
Washington
In Washington, the Washington State Bar Association provides a lawyer referral service. You can also use online resources like LegalZoom.
West Virginia
Use the West Virginia State Bar’s lawyer referral service or check out local law firms online.
Wisconsin
For Wisconsin, visit the State Bar of Wisconsin’s lawyer referral service or use online platforms like Thumbtack.
Wyoming
In Wyoming, the Wyoming State Bar provides a lawyer referral service. You can also use online resources like UpCounsel.
FAQs
What is the highest settlement for wrongful termination?
The highest settlements in wrongful termination cases often reach into millions of dollars, though such large payouts are not common. For example, in 2012, a California jury awarded $167 million to a former physician assistant in a wrongful termination and harassment suit against her employer1. However, it’s important to note that these high-profile cases are outliers and the average settlement is generally much lower.
How successful are wrongful termination cases?
The success rate of wrongful termination cases varies widely and depends on several factors, including the strength of the evidence, the jurisdiction, and the expertise of the legal counsel. A study by the American Bar Association found that plaintiffs win wrongful termination or employment discrimination cases about 15% of the time at trial. However, many cases are settled out of court, and those settlements are often confidential.
How do you negotiate a wrongful termination settlement?
Negotiating a wrongful termination settlement often involves several steps:
- Document Everything: Keep records of all incidents related to your termination, including emails, performance reviews, and any discriminatory or retaliatory actions.
- Calculate Your Damages: Determine how much you have lost in wages, benefits, job search costs, medical expenses, and any other relevant expenses.
- Consult an Attorney: An experienced employment lawyer can help you understand the value of your case and guide you through the negotiation process.
- Prepare a Demand Letter: This letter outlines your claims, the evidence supporting them, and the amount you are seeking in damages.
- Negotiate: The negotiation process may involve several rounds of offers and counteroffers until a settlement can be reached.
How to calculate compensatory damages for a wrongful termination claim?
To calculate compensatory damages, you’ll need to tally up all your economic losses (lost wages, lost benefits, job search costs, etc.) and non-economic losses (pain and suffering). In some cases, you may also be eligible for punitive damages if the employer’s conduct was particularly egregious.
What type of compensatory damages will pay?
Compensatory damages in wrongful termination cases typically include:
- Lost Wages and Benefits: This includes the salary, bonuses, commissions, and benefits you would have earned had you not been wrongfully terminated.
- Job Search Costs: Expenses incurred while looking for a new job can be included in your claim.
- Pain and Suffering: Compensation for emotional distress caused by the wrongful termination.
- Medical Expenses: If the wrongful termination resulted in physical or psychological harm, the costs of treatment could be included in your claim.
- Punitive Damages: In some cases, additional damages may be awarded to punish the employer and deter similar behavior in the future.
What is the average EEOC settlement?
The U.S. Equal Employment Opportunity Commission (EEOC) enforces federal laws prohibiting job discrimination. The agency does not release average settlement figures, and settlements can vary greatly depending on the specifics of each case. However, in 2020, the EEOC secured $439.2 million in monetary benefits for victims of discrimination3.
Sources
