If you win a wrongful termination lawsuit, the damages (also called remedies) available to you depend on your legal claims. The purpose of damages in a wrongful termination lawsuit is to put the employee back in the position he or she would have been in, if not for the employer’s misconduct. For example, no matter what legal theories an employee relies on, the employee can expect to be compensated for salary and benefits lost as a result of being fired illegally.
In addition to these out-of-pocket losses, you might also be entitled to damages for pain and suffering, punitive damages (intended to punish the employer for particularly wrongful conduct), attorney fees, or other remedies. It all depends on the legal arguments your lawyer makes and the facts of your case.
The damages available to an employee who wins a discrimination lawsuit depend on whether the employee sued under federal or state law. For most types of discrimination, damages can include:
- back pay, to compensate the employee for lost wages from the date of termination until the date the employee got a comparable new job or the date of the judgment in the lawsuit (whichever is earlier)
- front pay, to compensate an employee who hasn’t found a new job for wages lost from the date of the lawsuit judgment until the employee is reinstated or finds new work
- other out-of-pocket losses, such as the cost of benefits or job perks lost as a result of the termination
- injunctive relief (a court order requiring the employer to do something, such as reinstate the employee, or stop doing something, such as relying on discriminatory layoff criteria)
- attorney fees and court costs for bringing the lawsuit
- compensatory damages, to pay for the employee’s pain, suffering, and emotional distress, and
- punitive damages, to punish the employer for particularly egregious conduct.
State laws vary as to whether – and how much – an employee can be awarded compensatory and punitive damages. In some states, the only limit on these types of damages is the harm suffered by the employee. However, some states put a limit on how much an employee can be awarded.
Federal law caps the total amount an employee can be awarded for compensatory and punitive damages combined, based on the size of the employer. The cap ranges from $50,000 to $300,000.
Federal law makes different damages available for age discrimination. Compensatory and punitive damages may not be awarded. However, employers may have to pay a penalty (called "liquidated damages") equal to the back pay award, if the employer knew its conduct was illegal or recklessly disregarded that possibility. State laws may provide for different damages.
Most employees in this country work at will. This means the employee can quit or be fired at any time, for any reason. However, this isn’t the case for all employees. If an employee has a written, oral, or implied employment contract that limits the employer’s right to fire at will, the employee can sue if the employer breaches that contract by firing the employee in violation of the agreement’s terms.
In a contract lawsuit, the damages depend entirely on the terms of the contract. For example, let’s say an employee had a five-year employment contract, and was fired without cause after three years. The employee’s damages would be the pay, benefits, and other compensation he or she would have earned during the last two years of the contract.
This isn’t the end of the story, however. An employee who sues for breach of contract has a legal obligation to mitigate (minimize) these damages by looking for a new job. The employee can't simply sit around for two years, cashing paychecks. The employee's final damages figure is what the employer owed under the contract less what the employee actually earned (or should have earned) from other work.
In a contract case, the employee is not entitled to compensatory or punitive damages. The language of the contract determines the employee’s right to attorney fees. In other words, if the contract states that a party who wins a contract dispute is entitled to attorney fees, they can be awarded; otherwise, each side will have to pay its own fees and court costs.
Personal Injury Lawsuits
An employee who is wrongfully terminated might be able to sue the employee for a personal injury claim, also called a “tort” claim. Often, these lawsuits allege that the employer injured the employee’s reputation or ability to earn a living.
In many states, employees can sue for wrongful termination in violation of public policy. In these cases, the employee claims that he or she was fired for reasons that most people would find morally or ethically wrong. For example, an employee who is fired for exercising a legal right (such as the right to serve on a jury or join the National Guard), refusing to engage in illegal activities (such as submit false shareholder documents or lie to a government auditor) or reporting illegal conduct within the company, may be able to sue for violation of public policy.
Another common workplace personal injury claim is defamation. In this type of case, the employee claims that the employer intentionally made false statements about the employee that damaged the employee's reputation. Often, these claims are based on providing a negative reference while the employee is searching for a new job.
In a tort case, the employee's damages include back pay, lost benefits, court costs, and attorney fees, as well as compensatory damages (for emotional distress) and punitive damages (to punish the employer for misconduct).
If you were fired in violation of a state or federal law, the law may dictate the damages available to you in a wrongful termination lawsuit. For example, under the federal Family and Medical Leave Act, employers are required to allow eligible employees to take time off for certain reasons. When the employee’s leave is complete, the employer must reinstate the employee (with a few narrow exceptions). If the employer doesn’t reinstate the employee, the employee can sue for wrongful termination and collect lost wages and benefits, attorney fees, and court costs. The statute also allows courts to award the employee liquidated damages, in an amount that is equal to the employee’s actual out-of-pocket losses, unless the employer had a reasonable basis to believe that its conduct did not violate the law.