How to value a wrongful termination case.

A common, and obvious, question is “What is my discrimination or wrongful termination case worth?”  The answer, in typical lawyerly fashion, is “it depends.”  The value of a case will vary based on the fact-specific details, credibility of witnesses, key documents, legal nuances that may be relevant, the judge assigned to the case, and of course how a jury views the evidence.  However, in trying to determine the potential value, there are a few issues to consider to help you decide if it’s worth possibly spending up to two years or longer litigating the case. For discrimination cases, such as those brought under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), or the Texas Labor Code, the statutes provide for specifics as to what you can potentially recover if you prevail at trial or have a favorable settlement.

Economic loss

Lost wages and benefits for the “adverse action” caused by the discrimination (such as a termination, demotion, or failure to promote) can be recovered.  This is often in the form of backpay, which may be determined by a jury.  However, earnings from subsequent employment would have to be taken into account when determining such economic losses.  As a simple example, if your compensation was $100,000 year (salary plus benefits), and a jury decides after a trial – two years later – that your termination was discriminatory, you could be entitled to $200,000 in lost past compensation.  However, if you remained unemployed for one year with no income and got a new job one year after your termination with a compensation of $90,000 annually, then your economic loss would be $110,000 ($100,000 during the one year of unemployment plus $10,000 for the difference for the subsequent year).  You also have an obligation to “mitigate” your potential damages, meaning you would need to take reasonable steps to search for similar employment after your termination.  A failure to take such efforts could further reduce your potential damages.

In addition, you may be able to recover loss of future income and benefits, especially if your subsequent employment does not provide for as favorable compensation.

Compensatory and punitive (or exemplary) damages

For claims under Title VII, the Texas Labor Code, and the ADA, you may also be able to recover compensatory damages, which includes items such as mental anguish, inconvenience, and loss of enjoyment of life.  You may also be entitled to recover punitive/exemplary damages, which is essentially designed to punish the company/employer for violating the law.  The standard to prove punitive/exemplary damages is higher and not always recoverable.

The statutes also provide a cap on the amount of compensatory and punitive damages you can recover, based on the number of employees employed by the company/employer, as follows:

  • For employers with 15-100 employees, the limit is $50,000.
  • For employers with 101-200 employees, the limit is $100,000.
  • For employers with 201-500 employees, the limit is $200,000.
  • For employers with more than 500 employees, the limit is $300,000.

Some statutes do not have caps, such as race discrimination claims brought under 42 U.S.C. § 1981 or some protections for nurses.

Liquidated damages

For some claims, such as those brought under the ADEA (for age discrimination under federal law) and the Family Medical and Leave Act (FMLA), there are usually no compensatory or punitive damages allowed; however, you may be able to recover liquidated damages.  This would be an additional amount equal to the economic loss.  Therefore, for example, if you recover $100,000 in lost income in an ADEA discrimination case, you may be able to recover an additional $100,000 as liquidated damages.  (The FLSA also allows recovery of liquidated damages.). If the employer can show that it acted in good faith, despite the violation, then it may not be obligated to pay liquidated damages.

Attorney’s fees and costs/expenses

Finally, if you prevail in a discrimination or wrongful termination lawsuit, you would be able to recover an additional amount as attorney’s fees (even if you have a contingency-fee arrangement with your attorney) and “costs” which are primarily third-party expenses (such as filing fees, subpoena fees, witness fees, and court reporter fees).

Valuing your case

The above details provide a basic overview about what you may be able to recover through trial in most typical cases, but you would have to weigh the pros and cons of litigating a case that may take at least two years.  This is a discussion you would need to have with your attorney, and one that may need to be revisited several times over the course of a lawsuit.  Also, to reiterate, every case is different and the potential value may be impacted by many factors.

Finally, although many cases settle at various stages of a dispute, it is not recommended to go into a case assuming that it will settle.  In fact, Sud Law P.C. is unlikely to take your case if you are not willing to go the distance (trial) and even though Mr. Sud is often able to secure favorable settlements for many of his clients prior to trial or very early in the litigation process.

Also, see FAQ’s located here –