If you win a wrongful termination lawsuit, the compensation (also called "damages") available to you depend on your legal claims. The primary purpose of damages in a wrongful termination lawsuit is to put the employee in the same position he or she would have been in, if not for the employer’s misconduct. No matter what legal theories an employee relies on, the employee can usually expect to be compensated for lost wages and benefits 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 (for the emotional turmoil and other negative effects of the illegal act), punitive damages (intended to punish the employer for especially egregious conduct), attorneys' fees, and court costs. Other non-monetary remedies may also be available, such as reinstatement to your job. 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 sues under federal or state law. For most types of discrimination, damages can include:
Federal law places a cap on the amount of damages an employee can receive for compensatory damages (out-of-pocket costs and pain and suffering combined) and punitive damages. The caps are based on the size of the employer and are as follows:
While these rules apply to most discrimination cases, there are special rules for age discrimination cases. An employee cannot receive compensatory damages and punitive damages in an age discrimination case. However, an employer may have to pay a penalty (called "liquidated damages") equal to the back pay award, if the employer knew its conduct was illegal or it recklessly disregarded that possibility. State laws may provide for different damages for age discrimination cases.
As to all other types of discrimination cases, state laws vary as to whether – and how much – an employee can be awarded for compensatory damages and punitive damages. In some states, there is no limit, and a jury can award whatever amount it feels is warranted by the evidence (although jury awards are subject to review if they are deemed excessive). In other states, there is a limit on how much an employee can be awarded. The caps vary significantly from state to state.
Most employees in this country work at will. This means the employee can quit or be fired at any time, for any reason (as long as the reason is not illegal, such as discrimination). However, not all employees are at-will employees. Some employees have written or oral contracts, which guarantee that they will not be fired except for certain reasons. If the employer fires the employee for a reason not stated in the contract, the employee can sue the employer for breach of contract.
In a breach of contract lawsuit, the damages depend entirely on the terms of the contract. For example, suppose an employee has a five-year employment contract and is to be paid $100,000 per year. If the employee is fired without good cause after three years, the employee would be entitled to the $200,000 that he or she would have earned during the last two years of the contract. The same goes for any benefits, bonuses, or other compensation guaranteed to the employee in the contract.
This isn’t the end of the story, however. The employee has a legal duty to minimize his or her damages by looking for a new job. In other words, the employee can't simply sit around for two years, cashing paychecks. The employee must make an active effort to find new work, and any wages earned will be subtracted from what is owed under the contract. For example, suppose after six months, the employee was able to find a new job paying $100,000 a year. In that case, the employee would only receive $50,000 for the half year that he or she was unable to find work.
In a breach of contract case, the employee is not entitled to pain and suffering or punitive damages. And, the employee can only recover attorneys' fees and costs if there's a clause in the contract giving the winner of the lawsuit that right.
An employee who is wrongfully terminated might be able to sue the employer for other civil claims, called “tort” claims. Often, these lawsuits allege that the employer violated public policy or 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), for refusing to engage in illegal activities (such as submit false shareholder documents or lie to a government auditor), or for reporting illegal conduct within the company, may be able to sue for violation of public policy.
Another common workplace tort 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 arise when the employer gives negative references to potential employers during the employee's job search.
In a tort case, the employee's damages may include lost wages and benefits, attorneys' fees, court costs, pain and suffering, and punitive damages.
If you were fired in violation of a state or federal law, the law may specifically state the amount of damages available to you. For example, under the federal Family and Medical Leave Act, employers are required to allow eligible employees to take time off for certain health and caretaking reasons. When the employee’s leave is complete, the employer must reinstate the employee to the same position (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, attorneys' 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.