What is a typical employment lawsuit settlement?

Key Takeaways

  1. Variability in Settlement Amounts: Employment lawsuit settlements vary widely based on the type of claim, with sexual harassment settlements averaging $120,000 and wrongful termination ranging from $120,000 to $1 million.
  2. Significant Litigation Costs: The average employment lawsuit costs a company approximately $200,000, including legal fees for both sides and the employee’s settlement.
  3. Importance of Mitigation: Employees must seek similar employment to mitigate damages in wrongful termination cases, potentially reducing the settlement amount.
  4. Types of Damages: Plaintiffs can recover lost wages, benefits, non-economic damages (like emotional distress), attorney’s fees, and, in egregious cases, punitive damages.

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 What is a Typical Employment Lawsuit Settlement?

Typically, the average employment lawsuit settlement is $40,000, but that doesn’t nearly tell the whole story. A sexual harassment lawsuit may settle for $120,000, while an unpaid wage lawsuit averages $40,000. Wrongful termination may range from $120,000 to $1 million.

The average discrimination settlement amount differs from a wage claim amount. Employment lawsuits and claims are the most significant and most time-consuming losses that a business will face. The average employment lawsuit will cost a company $200,000; this is made up of $80,000 for the employer’s attorneys’ fees, $80,000 for the employee’s attorneys’ fees, and $40,000 in settlement to the employee. The “average” is not a good benchmark because the issues alleged in the lawsuit determine the settlement amount. For example, the average discrimination settlement amount may be $80,000; likewise, an employee’s lawsuit alleging wage violations may be $10,000.

During the last five years alone, 60% of employers have faced employment lawsuits. Every year the EEOC secures approximately $404 million from U.S. employers. So, yes, your company is at risk for lawsuits.

Types of Employment Lawsuits

It is important to know the most common employment claims so you can protect your company against them.

Retaliation has become the top reason for discrimination lawsuits, higher than even racial discrimination.

What types of monetary damages can I receive in an employment lawsuit?

An employment lawsuit in California typically arises from disputes between an employer and an employee. These disputes may involve harassment, discrimination, wage issues, retaliatory actions, or wrongful termination. The types of monetary damages you receive depend on the legal basis for your lawsuit and the specific facts and circumstances of your case.

Example: If you were wrongfully terminated and lost $50,000 in wages, you could receive compensation for those lost wages, plus any future wages you would have earned.

Explanation: This example shows how lost wages can be calculated as part of the damages. It illustrates the direct financial impact of losing a job due to wrongful termination and the potential compensation for that loss.

What compensation can Nakase Law Firm clients expect?

Nakase Law Firm clients whose employment law claims result in out-of-court settlements or court awards after trial typically receive between $5,000 to $80,000 in compensation. Unfortunately, more than half of those who request consultations believe they were fired illegally, only to find that their firing was not a violation of their employment rights.

Example: A client might receive $30,000 in a settlement for a wage dispute, but another might receive $70,000 for a wrongful termination claim.

Explanation: This example highlights the variability in compensation amounts depending on the nature of the claim. It shows that different types of claims, such as wage disputes and wrongful termination, can result in different settlement amounts.

Do employment laws protect against all wrongful acts?

Unfortunately, employment laws do not protect employees from being wronged in all circumstances, only in select few. An experienced attorney can help determine whether your situation is one in which compensation can be obtained.

Example: If an employee is fired for poor performance, this may not be protected under employment laws. However, if they are fired for reporting safety violations, it could be protected.

Explanation: This example distinguishes between situations that may or may not be protected by employment laws. It clarifies that not all wrongful acts by employers are legally actionable.

What are lost wages and benefits?

Lost wages and benefits are the most basic form of damages in California employment cases. When the plaintiff provides evidence of discrimination, harassment, wage issues, or wrongful termination, they may recover monetary damages for lost wages and benefits. This includes wages and benefits from the date of wrongful termination to the court verdict or settlement and future lost wages.

Example: An employee wrongfully terminated may receive $25,000 for lost wages and $10,000 for lost health benefits.

Explanation: This example shows how damages for lost wages and benefits are calculated. It includes both past losses from the date of termination to the court verdict or settlement and future lost wages.

What is the mitigation of damages?

Mitigation of damages means looking for and taking up alternative employment to reduce losses caused by wrongful termination. In a wrongful termination lawsuit, the court will likely consider the extent to which the employee mitigated damages. Damages may be reduced if the employee found or could have found substantially similar employment and did not make reasonable attempts to retain it.

Example: If a wrongfully terminated employee finds a new job that pays $5,000 less annually, their damages might be reduced by that amount.

Explanation: This example explains the concept of mitigation of damages and how finding a new job can reduce the compensation amount. It emphasizes the importance of the employee’s efforts to mitigate their losses.

What are non-economic damages in employment lawsuits?

Non-economic damages include emotional distress, mental suffering, and damage to professional reputation. Plaintiffs may receive damages for health symptoms or mental stress caused by wrongful termination, harassment, or discrimination.

Example: An employee experiencing anxiety and depression due to wrongful termination might receive $20,000 for emotional distress.

Explanation: This example illustrates non-economic damages, showing how emotional distress and mental suffering can be quantified and compensated in an employment lawsuit.

Can I recover attorney’s fees and costs?

In some California employment cases, successful plaintiffs may recoup attorney’s fees and other litigation costs such as court fees, filing fees, and the cost of expert witnesses. Most plaintiffs must pay these fees from their damages or settlement, but employees can collect attorney’s fees and litigation costs under certain circumstances.

Example: An employee who wins a harassment case might also recover $15,000 in attorney’s fees and court costs.

Explanation: This example shows that in addition to the primary damages, plaintiffs can also recover the costs associated with litigation, including attorney’s fees, under certain conditions.

What are punitive damages?

Punitive damages differ from compensatory damages as they aim to punish the employer for egregious acts like oppression, fraud, or malice. These damages also serve to set an example and deter other companies from committing similar acts.

Example: An employer found guilty of maliciously firing an employee to cover up fraud might be ordered to pay $100,000 in punitive damages.

Explanation: This example explains punitive damages, emphasizing their purpose to punish the employer for particularly egregious behavior and to deter similar actions by others.

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