To many, it is distasteful to take what happened and reduce it to a dollar figure. How can you put a price on your dignity or reputation? You can’t. But money is the primary yardstick courts use to evaluation a violation of employment (and other) laws. They almost never force your employer to admit wrongdoing. A court won’t even make your boss apologize. A court can require that your employer write you a check in an effort to give you something for what you have suffered. Of course, through the process of bringing a lawsuit, you can achieve many of your own nonmonetary goals, like regaining some self-respect.
The vast majority of cases settle well before trial. But the potential award at trial is what lawyers look at. When a demand letter lands on the desk of the company’s attorney, the first thing she will do (after cursing) is start to think about what your case is worth. To do that, she will consider what categories of damages you are eligible to win, and these can vary from case to case depending on which law or laws you are proceeding under. Think of these categories as fishing holes. If you go fishing, you may or may not catch a fish, but you cannot catch any fish if you are not allowed to at least cast your line in the water. Let’s talk about the different fishing holes.
Lost Wages
This is money you would win to replace lost income as the result of your unlawful termination. If you are wrongfully fired and it takes you a year to find another job, you are entitled to the money you would have received had you kept working. This also includes the value of benefits, like health care.
Let’s assume that as a result of losing your job, you lost $5,000 per month in wages and health-care benefits. Let’s also say it took you a year to find a job that paid you that much. Assuming that you won at trial, you would be entitled to $5,000 times twelve months, or $60,000. Let’s change this a bit and assume that after three months, you got a job that paid you as much or more than you were making at the old job. In that case, you would be entitled to $5,000 times three months, or $15,000. Let’s change this again and assume that you lost your job and in six months found another one, but it paid $3,000 per month in wages and benefits. Let’s further assume that your case went to trial and you won a year to the date after you lost your job (it almost always takes longer—sometimes much longer—than a year to get your case to trial, but we’ll use it here for simplicity’s sake). In this instance, you would be entitled to receive the amount in back wages for the time you were out of work: in this case, that’s $5,000 times six months, or $30,000, plus the difference between what you made in your new job and what you were making in your old job. Here, that would be $5,000 – $3,000 = $2,000 x six months = $12,000. Thus, your total lost wages would be $30,000 plus $12,000, or $42,000.
You may wonder why you should be forced to get a lesser-paying job. What if you decided not to get another job? The law requires you to “mitigate” damages: that is, you are expected to avoid running up damages numbers on purpose. In the employment context, this means looking for other work and taking a job for which you are qualified.
Tip:
Keep track of all your efforts to find a job. This is a bit harder than it was in the “old days” when folks responded to a job application with a résumé. Then you could keep a copy of the ad and cover letter or e-mail application to show that you applied. Today, applicants may use LinkedIn or another social media tool that doesn’t produce an obvious trail of applying for a specific job. So, as you look for work, keep a journal of your efforts. Defendants love to ask former employees about their efforts to find a job. They go over it in great detail in an effort to make you look less than thorough. When you keep the journal, pretend you are doing it to demonstrate to your neighbor that you are working hard to find a job. This doesn’t mean you have to apply for a job at McDonald’s if you just lost a position as a senior vice president. But it does mean that you should be able to explain what efforts you used to find work, including why you did not use certain avenues. For instance, if you didn’t use LinkedIn, just be prepared to explain why not. Here’s one possible answer: “I work in industries that require a security clearance. Companies actually don’t want applicants to have a conspicuous online profile. It might hurt my chances if I used social media.”
Front Wages
These are future wages. You might be eligible to receive front wages if you win at trial. Let’s assume that you made $5,000 a month in salary and benefits at your old job. At the time of trial a year later, you are still out of work. So, you are out $60,000. Now the trial is over, and you are still out of work and have no prospect of finding another job any time soon, through no fault of your own. And, for any number of reasons, reinstatement to your old job is not possible. In some cases, you will be entitled to a money payment (an “award of damages”) to compensate you for wages you would have received after the date of judgment if you had not been fired.
There is obviously some guesswork in this, which is why it’s advisable to have an expert witness testify on this issue. It is possible that you will find a job with the same salary a month later. But it might be three years later. The court will generally consider your efforts to find work and estimate how long it will take you to find comparable work, and it will then give you money (“award damages”) based on that educated guess. If the court thinks it will take you a year to find a job, and you were making $60,000 per year, then you will win back wages plus another $60,000.
Front pay is often called an “equitable remedy” and is usually awarded by the judge, even if a jury heard your case. Any time you hear the word equitable, it usually means fair. So, if you hear someone talk about the court’s “equitable powers,” this essentially means courts have the power to do what is fair. The period for front wages varies, but the average range is usually in the two- to five-year range. It is rare for a court to award a long period of front wages in an employment case.
Emotional Distress
Most civil rights and discrimination laws allow for the award of damages for emotional distress. When I have clients come in with dollar signs in their heads, this is the claim they pin their hopes on. Unfortunately, they are often disappointed. It is true, however, that a plaintiff can win money for emotional distress simply by testifying about the distress the defendant’s wrongful conduct caused. As a matter of common sense, the more disturbing a story, the higher the potential award.
For instance, a woman raped by her supervisor at work is likely to receive a substantial award, perhaps well in excess of $100,000. Someone who was subjected to disturbing discrimination and experienced expected distress—for example, loss of sleep, loss of appetite, and depression—can also win emotional distress damages, but not large damages. These usually range, at least in the Eastern District of Virginia, between $5,000 and $50,000. As evidence of how blasé the courts are about these kinds of damages, they refer to claims supported only by the plaintiff’s testimony as “garden variety.”
Emotional distress damages tend to be higher if they are supported by the testimony of a mental health professional. For instance, a jury is likely to give a larger award (and the court less likely to reduce it) if the employee’s testimony of emotional distress is supported by a psychiatrist who will testify that it is some of the worst she has seen and that she had to prescribe high doses of antidepressants to combat severe depression. Note that an employee cannot win emotional distress damages caused by the litigation itself, even though litigation results in a lot of emotional distress for everyone involved.
Negligent/Intentional Infliction of Emotional Distress
When alleging emotional distress under state law, plaintiffs have a choice of two types of claims: negligent infliction of emotional distress or intentional infliction of emotional distress. They are state law claims; thus the law, while often similar, can vary from state to state. As with most tort claims, the plaintiff is entitled to be compensated for emotional distress if she wins. However, and this is certainly the case in Virginia, what courts consider sufficiently egregious conduct to satisfy this standard is unbelievably high. For instance, in Virginia, the conduct must be “outrageous and intolerable in that it offends against generally accepted standards of decency and morality.” So, if your boss threatened to inflict serious bodily harm on you and then pummeled you in the parking lot, that would almost certainly count; however, being repeatedly yelled at by your boss to the point that you cried would almost certainly not count. In Virginia, to succeed on those claims, there typically has to be some touching involved. Other states may not be so exacting, but in most, the standard is still higher than many people understand.
Punitive Damages
Punitive damages are designed to punish the defendant. For years, these damages were not tied to compensatory damages. You could still win a fairly large award even if your actual damages were low. However, the US Supreme Court has held that these damages must be proportional to the underlying award. So, a jury cannot lawfully award, for instance, a $30 million punitive damages award when the plaintiff won, say, $30,000 in lost wages.
Still, these damages can be a multiple of the underlying award. Of course, this presumes that you can win such an award. The willingness of juries to award damages, and for courts to uphold damage awards, varies by jurisdiction. For instance, a jury in New Jersey may be more likely to award punitive damages than a more conservative jury in Virginia. I had a case in Virginia in which the client won damages of around $100,000. The judge (this was a bench trial) awarded another $100,000 in punitive damages. This was considered a large and unusual award for our area.
Liquidated Damages
This essentially means “times two.” So, if you are awarded lost wages of $10,000, liquidated damages would double this amount, giving you $20,000. Liquidated damages are a form of punitive damages. They are available only if the statute says that a court can award them: both the FLSA and the FMLA allow for this type of damages.
Consequential Damages
This money is awarded to compensate someone for a loss that occurred as a result of the defendant’s bad acts. For instance, if you are fired, you may have to go without income. As a consequence, you might lose your house. As with other damages, the statute will determine whether a judge can award them.
A Judge Can Reduce Your Damages
Shocking to most people is that a judge can reduce a damages award given by a jury. Let’s suppose that the jury in your case thought your employer acted reprehensibly. They want to sock it to the employer for damages of a cool $10 million. Two weeks later, the judge issues an opinion essentially saying that’s nice, but how about $300,000? She then gives you the option of taking that amount or having a whole new trial on the issue of damages. Judges (usually) don’t do this to be mean; they are worried about the court of appeals that reviews their decisions. In Virginia, the court of appeals has issued rulings disfavoring large damages awards, particularly punitive damages.
Caps
Some states cap emotional distress damages. And Title VII explicitly limits the money you can win in certain categories: the highest is $300,000 for a large company, but that figure drops to $50,000 for a company with fifteen to fifty employees. That’s right; go to trial on a sex-discrimination claim and win, and the best you can do is $300,000 if your main claim is for emotional distress. You also get your attorney’s fees paid, and front and back wages. So, how much money you are entitled to depends on which categories of damages you qualify for. If you were fired illegally and suffered severe emotional distress but got a job right away, the award you can win at trial is limited by Title VII caps.
Attorney’s Fees
I will talk about this later in the book, but want to address it briefly here, given that we’re talking about money that may end up in your pocket. Many discrimination statutes—including Title VII, FLSA, and FMLA—have what are called “fee-shifting provisions.” This means that, if you win, the defendant must pay your attorney’s fees and costs. Depending on the retainer agreement you sign with your attorney, this money may or may not have actually come out of your pocket. The advantage of these provisions is that, unless you have a contingency fee arrangement with your attorney, you get to keep the entire award.
Taxes
First, I am not a tax attorney, so I can talk only generally about this subject. But you should know that your award will likely be taxable, particularly if it includes an award of back and front wages. This amount will probably be subject to payroll taxes and income taxes. And your entire award will likely be subject to income taxes. So, if you get $100,000 at settlement or trial, a large chunk of that will go to taxes.
