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Wrongful Termination Settlements: What Can I Expect?

Employees who have been wrongfully terminated may be able to recover their job, back pay, compensatory damages, and other expenses in a successful wrongful termination lawsuit. Wrongful termination claims allege that an employee was fired in violation of state or federal law, or by breach of an employment agreement. Wrongful termination claims can be difficult to prove, which is why many claims are resolved in settlements. The value of a wrongful termination settlement depends on a number of factors that vary from case to case.

See FindLaw's Wrongful Termination section to learn more.

Why Wrongful Termination Settlements are Common

The majority of wrongful termination claims don't reach a courtroom. Instead, most cases are settled before they go to trial. Settlement is often the best option for both parties because of the unpredictable nature of jury trials.

For the terminated employee, one of the main obstacles is showing convincing evidence that the employee was terminated for impermissible reasons, such as their race, gender, whistleblowing, or reporting harassment. Employers often respond with evidence of supposedly valid reasons for the firing, such as poor performance.

Employers often have good reasons to settle. In addition to the uncertainty of a trial, even when employers successfully defend themselves, wrongful termination trials can reveal potentially damaging information about a company. Trials can also take a lot of time and be more costly than settlement.

How Wrongful Termination Claims Are Valued

The monetary value of a wrongful termination claim is based on several factors, which determine the amount of losses and damages suffered as a result of a firing. Common factors for the value of a claim are:

  • Lost wages
  • Loss of benefits
  • Emotional distress

Wage Loss Damages

Loss of wages is the amount of pay, including bonuses and commissions, the employee lost from the date of termination until the present. A plaintiff has a duty to mitigate these damages, generally through trying to find another job. Any interim benefits, such as income from a new job or unemployment benefits, can be deducted from the past wage total. Future wage loss may also be calculated where the employee has been unable to find new work by the time of trial or settlement.

Lost Benefits

The loss of benefits is also calculated when determining lost earnings. For example, if a fired employee must fund their own health insurance after termination, the employer may be liable for these out-of-pocket expenses. Benefits can also include fringe benefits, such as the loss of stock options.

Emotional Distress Damages

The cost of mental anguish experienced as a result of wrongful termination. Employees who have experienced anxiety, depression, or other emotional suffering as a result of their termination may seek compensation for distress. Recovering for emotional distress is more likely in cases where the alleged actions were especially egregious, as in claims of harassment or discrimination.

Other Factors Influencing Wrongful Termination Settlements

Some workers also pursue claims that go beyond financial compensation. Part of a settlement agreement could include getting the dismissed worker's job back, getting a promotion, or a change in workplace conditions.

When there is a culture of discrimination at a workplace, some wrongfully terminated workers may want to see justice, get validation for their claim, and closure. Terms of a settlement could include a demand for changes in company policy to prevent similar wrongs in the future.

There are also reasons why an employee or employer would not want to settle their case. Some employers who believe they have done no wrong may seek to avoid settling, in order to discourage similar claims in the future.

Get Legal Help With Your Wrongful Termination Settlement

If you believe you've been wrongfully terminated, the assistance of an attorney on your side who understands your state's employment laws can be very helpful in determining how to proceed. Their advice can help you avoid costly errors and guide you through the complexities of negotiation and litigation. Contact a local employment law attorney today.

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