Wrongful Termination Settlements Payout Amount

When a worker wins a wrongful termination lawsuit, the average payout amount is $9000 to $95,000, depending on how much the worker would have made during employment.

By Brad Nakase, Attorney

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Wrongful termination settlements in California can vary significantly from one case to another due to the unique circumstances involved in each situation. While it might be tempting to seek average settlement numbers as a reference, they can be misleading and often do not provide an accurate picture of what an individual may expect to receive in a wrongful termination case. This is because each case involves different factors, such as the reasons for termination, the severity of the harm caused, and the strength of the evidence presented.

The Equal Employment Opportunity Commission (EEOC) recognizes that the nature of damages resulting from wrongful termination can vary widely based on the specific circumstances of each case. The damages awarded are typically intended to compensate the employee for their losses and injuries caused by the unlawful termination. These damages can be classified into two main categories:

  1. Economic Damages: This includes lost wages, back pay, and benefits that the employee would have earned had they not been wrongfully terminated. It may also cover future earnings and benefits if the employee can demonstrate that their wrongful termination has negatively impacted their ability to secure employment.
  1. Non-Economic Damages: These damages are meant to compensate the employee for emotional distress, pain and suffering, and other intangible losses resulting from the wrongful termination. Proving non-economic damages can be more challenging, as they often rely on subjective factors, and the extent of these damages may vary depending on the severity of the harm experienced.

Before a worker can get settlement from a lawsuit, a worker prove that a wrongful settlement ocurred. But what is a wrongful termination? Proving unlawful termination in California typically involves establishing one or more of the following legal claims:

  1. Discrimination: If an employee can demonstrate that they were terminated based on their race, color, national origin, religion, sex, disability, age (if over 40), or other protected characteristics, they may have a claim for discriminatory termination.
  1. Retaliation: If an employer fired an employee as a form of retaliation for engaging in protected activities, such as reporting discrimination or harassment, whistleblowing, or exercising their legal rights, the termination may be considered unlawful.
  1. Breach of Contract: If there was an employment contract in place, and the employer violated its terms by terminating the employee without legal justification, the employee may have a claim for wrongful termination based on breach of contract.
  1. Violation of Public Policy: If the termination violates a fundamental public policy, such as firing an employee for serving on a jury or reporting illegal activities, it may be considered wrongful termination.

To succeed in a wrongful termination case, the burden of proof lies with the employee, who must provide evidence to support their claims. This may involve documentation, witness testimonies, and other relevant evidence to show that the termination was unlawful and caused them harm. We have written an article on wrongful termination examples.

Ultimately, the extent of damages awarded in a wrongful termination settlement will depend on various factors, including the strength of the evidence, the severity of the harm suffered, and the skill of the legal representation. Some cases may result in substantial settlements or jury awards, while others may lead to smaller compensatory amounts. It is essential for individuals facing wrongful termination to seek the guidance of an experienced employment attorney to evaluate the unique circumstances of their case and pursue the most appropriate legal remedies.

In this article, our San Diego employment lawyer for workers discusses wrongful termination settlement as follows:

What is back pay and front pay?

In wrongful termination cases, both back pay and front pay are forms of monetary compensation that may be awarded to the employee as a means of making them whole for the financial losses resulting from the unlawful termination. These payments are intended to restore the employee to the position they would have been in if the wrongful termination had not occurred.

  1. Back Pay: Back pay refers to the wages and benefits the employee would have earned from the date of termination up to the date of the settlement or court judgment. It includes any salary, bonuses, commissions, and benefits that the employee would have received had they remained employed during that period. Back pay is typically awarded as compensation for the actual financial losses experienced by the employee due to the wrongful termination.
  1. Front Pay: Front pay is an additional form of compensation that is awarded to an employee to compensate for future financial losses that they are likely to incur as a result of the wrongful termination. This type of compensation is typically granted in cases where reinstatement to the former position is not feasible or appropriate. Front pay is intended to cover the period from the date of the settlement or court judgment into the foreseeable future until the employee can secure a comparable job.

It is crucial for an employee who has been wrongfully terminated to actively seek new employment immediately after the termination. This proactive job search is essential for two main reasons.

First, the law requires employees who have been wrongfully terminated to take reasonable steps to mitigate their losses. This principle is known as “mitigation of damages.” By actively seeking new employment, the employee demonstrates to the court that they are making a genuine effort to minimize their financial losses resulting from the termination. If the employee can show that they have made diligent efforts to find comparable employment, it may affect the amount of back pay and front pay awarded to them. If the court finds that the employee did not make reasonable efforts to find new employment, the damages awarded may be reduced accordingly.

Second, in cases where reinstatement to the former position is not possible, front pay is calculated based on the expected duration of unemployment. If the terminated employee secures a new job relatively quickly, the period for which front pay will be awarded may be shorter. Conversely, if the employee faces an extended period of unemployment due to the wrongful termination, the front pay awarded may cover a more extended period.

It is important to note that while the employee is expected to mitigate their losses, they are not required to accept any job offer that comes their way. The new job should be comparable to their previous position in terms of responsibilities, salary, benefits, and other relevant factors. If the new job offered is not comparable or is substantially lower in compensation and benefits, the employee may have valid reasons for rejecting it without jeopardizing their claim for back pay and front pay in the wrongful termination case.

Can an individual be compensated for loss of benefits?

In wrongful termination cases, loss of benefits refers to the compensation and benefits that an employee would have received had they not been wrongfully terminated. These benefits can include health insurance, retirement contributions, stock options, paid time off (such as vacation and sick leave), bonuses, and other perks provided by the employer.

Calculating the recovery for loss of benefits in a wrongful termination case can be complex and may vary depending on the specific circumstances of the case. The following are some key considerations in determining how recovery for loss of benefits is calculated:

  1. Employment Contract and Company Policies: The first step is to review the employee’s contract, if one exists, and the company’s policies regarding benefits. This will help determine the extent and value of the benefits that the employee was entitled to receive during their employment.
  1. Duration of Loss: The period for which the employee is entitled to recover the loss of benefits is typically measured from the date of the termination to the date of the settlement or court judgment. This includes any past benefits that the employee would have received during that period.
  1. Benefit Valuation: The value of different benefits can be calculated in various ways. For some benefits, such as health insurance, the cost to the employer to provide coverage can be used as a basis for determining the value. For other benefits, like stock options, their value might be determined based on the market price or other relevant factors.
  1. Proof of Loss: To recover for the loss of benefits, the terminated employee must provide evidence and documentation to support their claim. This may include pay stubs, benefit enrollment documents, or statements from the employer’s Human Resources department detailing the benefits that would have been available during the relevant period.
  1. Mitigation: As mentioned earlier, the employee has a duty to mitigate their losses by actively seeking new employment. If the terminated employee secures a new job with similar benefits during the period of wrongful termination, the recovery for the loss of benefits may be reduced for the time the new benefits are in effect.
  1. Front Pay Considerations: If front pay is awarded as part of the settlement or court judgment, it may also include compensation for the loss of future benefits that the employee would have received had they remained employed.
  1. Expert Testimony: In some cases, expert testimony may be required to accurately calculate the value of certain benefits, especially if they are more complex or difficult to quantify.

It is essential for the terminated employee to work closely with their legal counsel to accurately assess the value of the lost benefits and ensure that all relevant factors are considered when seeking recovery for the loss of benefits in a wrongful termination case. Each case is unique, and the calculation of loss of benefits requires a thorough analysis of the individual circumstances and applicable laws.

Can an individual be compensated for emotional distress?

Emotional distress is a significant aspect of wrongful termination cases, and it refers to the psychological and emotional harm caused to the employee as a result of the unlawful termination. Non-economic damages, also known as general damages, are meant to compensate the employee for intangible losses that are challenging to quantify in monetary terms. Emotional distress damages can be quite substantial in wrongful termination cases, depending on the severity of the harm caused. Some examples of non-economic damages related to emotional distress in such cases include:

  1. Anxiety and Depression: Wrongful termination can lead to intense feelings of anxiety, stress, and depression due to the sudden loss of employment and uncertainty about the future. The emotional toll can be significant, especially when the employee’s livelihood and financial stability are affected.
  1. Reputational Damage: Wrongful termination can harm an employee’s reputation and professional standing in their industry or community. Being wrongfully fired can create a negative impression on potential employers, colleagues, or clients, which can be emotionally distressing and hinder future career opportunities.
  1. Post-Traumatic Stress Disorder (PTSD): In severe cases of wrongful termination, an employee might develop PTSD, a mental health condition triggered by traumatic events. PTSD can cause flashbacks, nightmares, and extreme anxiety related to the termination experience.
  1. Loss of Self-Esteem and Self-Confidence: Wrongful termination can erode an employee’s self-esteem and self-confidence. Feelings of failure and rejection can result in emotional distress that affects both their personal and professional life.
  1. Loss of Enjoyment of Life: Being wrongfully terminated can lead to a diminished quality of life. An employee might lose the enjoyment and fulfillment they previously derived from work and other activities due to the emotional impact of the termination.
  1. Humiliation and Embarrassment: Wrongful termination can lead to feelings of humiliation and embarrassment, especially if the circumstances of the termination become known to others. This can have a significant impact on an individual’s emotional well-being.
  1. Social Isolation: The emotional distress resulting from wrongful termination may cause an employee to withdraw from social interactions, leading to feelings of isolation and loneliness.

Proving non-economic damages can be more challenging than quantifying economic damages like lost wages, as emotional distress is subjective and not easily measurable. The employee and their legal team must present evidence and testimony to demonstrate the extent of the emotional harm suffered due to the wrongful termination.

Courts may consider factors such as the severity and duration of emotional distress, the impact on the employee’s daily life, any medical treatment sought, and the credibility of witness testimonies in determining the appropriate compensation for non-economic damages in a wrongful termination case. Each case is unique, and the award for emotional distress will be based on the specific circumstances and evidence presented during the legal proceedings.

Can an individual be compensated for courts costs and attorneys fees?

In wrongful termination cases, attorneys’ fees and court costs refer to the expenses associated with hiring legal representation and pursuing the claim through the legal system. These costs can be significant, and understanding how they are handled is essential for both the employee seeking justice and the attorney representing their interests.

  1. Attorneys’ Fees:

In California, attorneys’ fees in wrongful termination cases are typically awarded based on specific legal provisions. The general rule in the United States is that each party is responsible for covering their own attorneys’ fees.

But employees who prevail in wrongful termination cases under certain laws, such as those involving discrimination, retaliation, or whistleblower protections, may be entitled to recover their reasonable attorneys’ fees and costs. This means that if the employee wins the case or reaches a favorable settlement, the employer may be required to reimburse the employee for the reasonable legal fees incurred during the litigation.

The inclusion of attorneys’ fees provisions in certain employment laws is intended to encourage employees to pursue legitimate claims and protect their rights, even when the potential costs of litigation might otherwise deter them from seeking justice.

  1. Court Costs:

Court costs encompass various expenses associated with pursuing a legal case, apart from attorneys’ fees. These costs can include filing fees, document preparation, court reporter fees, expert witness fees, photocopying, travel expenses related to the case, and more.

In the United States, the general rule is that each party is responsible for their own court costs, win or lose. However, there are exceptions. For instance, in some cases, the prevailing party may be entitled to recover court costs from the losing party.

In California, if an employee successfully proves their wrongful termination claim and the court awards them damages, they may also be entitled to recover court costs in addition to their attorneys’ fees, depending on the applicable laws and the court’s discretion.

Individuals who believe they have been wrongfully terminated should consult with an experienced employment attorney to understand their rights, the potential costs involved, and the likelihood of recovering attorneys’ fees and court costs if they prevail in their case. An attorney can help guide the employee through the legal process, assess the strength of their claim, and advocate for their rights effectively.

What are punitive damages in wrongful termination cases?

Punitive damages, also known as exemplary damages, are a type of monetary award that can be sought in certain wrongful termination cases. Unlike compensatory damages, which are meant to compensate the plaintiff for their actual losses and harm suffered, punitive damages are intended to punish the defendant (usually the employer) for their egregious conduct and to deter others from engaging in similar wrongful behavior in the future.

In the context of wrongful termination cases, punitive damages may be awarded when the employer’s actions are found to be particularly malicious, oppressive, fraudulent, or done with reckless disregard for the employee’s rights. These damages are not available in all wrongful termination cases and are generally only awarded in cases where the employer’s conduct is deemed to be especially egregious.

In California, the standard of proof for punitive damages is higher than that for compensatory damages. The plaintiff (the wrongfully terminated employee) must demonstrate, by clear and convincing evidence, that the employer’s actions amounted to extreme misconduct or intentional wrongdoing.

Some jurisdictions impose caps or limits on the amount of punitive damages that can be awarded in wrongful termination cases. These limits are typically based on a multiple of the compensatory damages awarded to the plaintiff.

The primary purpose of punitive damages is to punish the employer for their wrongful actions and to deter similar misconduct in the future. By imposing significant financial penalties on the employer, the court seeks to send a message that such behavior will not be tolerated.

The potential for punitive damages can significantly impact settlement negotiations in wrongful termination cases. Employers may be more inclined to settle out of court to avoid the risk of facing substantial punitive damages if the case goes to trial.

Punitive damages are typically reserved for cases involving intentional or reckless misconduct by the employer, such as discrimination based on protected characteristics, retaliation for whistleblowing, or other serious violations of employment laws.

It is important to note that not all wrongful termination cases will qualify for punitive damages. Whether punitive damages are available and appropriate in a specific case will depend on the facts and circumstances involved. In addition, the availability and potential amount of punitive damages will vary based on the laws of the jurisdiction where the case is filed.

For employees pursuing a wrongful termination case, it is crucial to work with an experienced employment lawyer who can assess the merits of the case, advise on the potential for punitive damages, and navigate the legal process effectively to seek appropriate remedies for the harm suffered.

Can an employee be reinstated after wrongful termination?

In wrongful termination cases, reinstatement refers to the court-ordered or negotiated remedy where an employee who has been wrongfully terminated is restored to their former position within the company or organization as if the termination had not occurred. Reinstatement is one of the possible remedies available to an employee who prevails in a wrongful termination case, but it is not always granted or sought, depending on the circumstances.

The following are some important aspects to consider regarding reinstatement in the context of wrongful termination cases:

  1. Availability of Reinstatement: Reinstatement is not always a feasible remedy, particularly in cases where there has been a breakdown in the employment relationship or where the employee no longer wishes to work for the employer due to the events surrounding the termination. In such instances, the court may consider alternative remedies like front pay (compensation for lost future earnings and benefits) instead of reinstatement.
  1. Front Pay vs. Reinstatement: Front pay and reinstatement are both remedies intended to address the economic harm caused by the wrongful termination. Front pay covers the period during which the employee would have remained unemployed until they find comparable employment. Reinstatement, on the other hand, requires the employer to take the employee back into their former position, usually with back pay for the time they were unemployed.
  1. Employer Cooperation: For reinstatement to be a viable remedy, the employer must be willing to cooperate and re-employ the wrongfully terminated employee. In many cases, the relationship between the parties may have deteriorated to a point where reinstatement is not possible or practical.
  1. Employee’s Perspective: Reinstatement may not be the preferred option for the wrongfully terminated employee. If the work environment was hostile or the employer has displayed discriminatory behavior, the employee may prefer to seek other job opportunities or negotiate a settlement without reinstatement.
  1. Seniority and Advancement: If the wrongfully terminated employee is reinstated, they should be entitled to the same seniority, benefits, and opportunities for advancement that they would have had if the termination had not occurred.
  1. Retaliation Protection: Some employment laws, such as Title VII of the Civil Rights Act of 1964, provide protection against retaliation for employees who assert their rights by pursuing a wrongful termination claim. Reinstatement can offer an added layer of protection for employees who fear future retaliation.
  1. Negotiated Settlements: In many wrongful termination cases, the parties may reach a negotiated settlement that includes a monetary award along with other terms, such as reinstatement or a mutually agreed-upon separation.

Reinstatement is a remedy that should be carefully considered in each wrongful termination case, taking into account the specific circumstances, the preferences of the employee, and the feasibility of restoring the employment relationship. Employees seeking reinstatement should consult with an experienced employment attorney to understand their rights, evaluate the potential benefits and drawbacks, and pursue the most appropriate remedy to address the harm caused by the wrongful termination.

How do you build a strong wrongful termination case in California?

Building a strong wrongful termination case in California requires thorough preparation, solid evidence, and strategic legal representation. To increase the likelihood of achieving a fair settlement, consider taking the following steps:

  1. Gather Evidence: Collect all relevant documents and evidence related to your employment, termination, and any discriminatory or retaliatory actions. This may include employment contracts, performance evaluations, emails, text messages, witness statements, and any other documentation that supports your case.
  1. Document the Events: Create a detailed timeline of events leading up to and following your termination. Include dates, names of individuals involved, and a clear description of any discriminatory or retaliatory actions.
  1. Understand the Applicable Laws: Familiarize yourself with the relevant employment laws in California that protect against wrongful termination, such as anti-discrimination laws and whistleblower protections. This will help you identify potential legal claims to support your case.
  1. Seek Legal Advice: Consult with an experienced employment attorney who specializes in wrongful termination cases in California. A knowledgeable attorney will evaluate the strength of your case, guide you through the legal process, and provide valuable advice on building a compelling claim.
  1. File Timely Administrative Complaints: If applicable, file complaints with the appropriate administrative agencies, such as the Equal Employment Opportunity Commission (EEOC) or the California Department of Fair Employment and Housing (DFEH), within the specified time limits.
  1. Preserve Your Rights: Do not sign any waivers or release agreements without first consulting your attorney. Signing such documents without understanding their implications could jeopardize your ability to pursue a wrongful termination claim.
  1. Explore Mediation and Settlement Talks: Engage in mediation or settlement negotiations with the help of your attorney. Sometimes, reaching a fair settlement without going to court can be beneficial for both parties.
  1. Demonstrate Damages: Establish the economic and non-economic damages you suffered as a result of the wrongful termination. Provide evidence of lost wages, benefits, emotional distress, and any other relevant losses.
  1. Identify Witnesses: Identify potential witnesses who can provide testimony in support of your claims. These witnesses may include colleagues who observed the events leading to your termination or Human Resources representatives who were involved in the termination process.
  1. Be Transparent and Honest: Be open and honest with your attorney about all relevant details, even if they may seem unfavorable. Your attorney needs a complete understanding of the situation to build the strongest possible case.
  1. Maintain Professionalism: Throughout the legal process, maintain professionalism and avoid engaging in retaliatory actions or public discussions that could harm your case.

Remember that each wrongful termination case is unique, and success depends on the specific facts and circumstances involved. An experienced employment law attorney is instrumental in building a strong case and advocating for a fair settlement on your behalf.

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