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 lawsuit or wrongful termination settlement. Wrongful termination claims allege that an employee was fired in violation of an employment agreement or the law. Because wrongful termination claims can be difficult to prove (and also risky for employers), many claims are resolved in settlements. The value of a wrongful termination settlement depends on a number of factors which 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. Rather, many cases are settled beforehand. Often, settlement is seen as the best option for both parties, given the potentially unpredictable nature of civil trials.

For the terminated employee, one of the main obstacles is showing convincingly that the employee was terminated for impermissible reasons, such as his or her race, gender, whistle blowing or reporting harassment. Employers often respond with evidence of supposedly valid reasons for the firing, such as poor performance. A review of wrongful termination trials in the 1990's found that employees win just about half their claims.

Employers too, often have 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.

How Wrongful Termination Claims Are Valued

The monetary value of a wrongful termination is based on several components, which seek to determine how much loss was suffered as a result of a firing. Some factors commonly examined to determine the value of a claim are:

Wage Loss

The amount, in wages, the employee lost from the date of termination until the present. A plaintiff has a duty to mitigate these damages, through, for example, seeking another job. Any interim benefits, such as income from a new job or unemployment benefits, are deducted from the past wage total. Future wage loss may sometimes also be calculated, such as when 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

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

Other Factors Influencing Wrongful Termination Settlements

Besides the monetary value associated with a wrongful termination claim, settlements may be influenced by additional factors. For example, many workers also pursue claims to see justice or personal vindication, not just to recover lost income. Workers who have been fired due to discrimination or retaliation may see a successful settlement as providing validation and closure. In addition to monetary damages, some pursue changes in company policy to prevent similar wrongs in the future.

Similarly, employers who believe they have done no wrong may seek to avoid settling, on order to discourage similar claims in the future. Employers whose insurance covers the cost of legal expenses may be more willing to litigate such cases.

Get a Free Initial Claim Review

If you believe you have been wrongfully terminated the assistance of an objective third party 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 attorney for a free initial claim review to discuss how they can help you get a fair review of your termination.

Next Steps

Contact a qualified employment attorney to make sure your rights are protected.

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