“What Is My Case Really Worth?” Part One-Title VII and ADA Employment Cases

As promised, today marks my first installment in a three part series of blog posts about damages in employment law cases.  Balancing my client’s expectations about how much their case is worth with the likely  reality of what their case is actually worth is quite often a difficult job.  Today, we will focus on Title VII (gender, race, national origin, religion discrimination) and ADA (disability) cases.  Title VII gender cases also include sexual harassment and pregnancy discrimination and cases involving any retaliatory actions taken against someone who is a part of these protected classes.

THE CAPS

The first thing I always have to explain to clients is that damages (compensatory AND punitives but NOT back pay) are CAPPED by federal law in Title VII employment discrimination cases and ADA cases.  This is a very difficult concept for clients to understand at times because they often associate lawsuits with their perception of what they see on television; i.e. millions of dollars for a product liability case or hundreds of thousand dollars for a car wreck or personal injury case.  Personal injury and product liability cases do not have federal caps like employment discrimination cases do!  Multi-million dollar awards in non-class action employment discrimination cases are rare.  Even if a jury agrees with you in a Title VII or ADA case, you cannot get more compensatory or punitive damages than the federal caps.  There is nothing I can do as an attorney to change this.  So what are the caps?  The caps depend on how many total employees your old employer has during the current or preceding calendar year:

15-100 employees:    $50,000.00

101-200 employees:  $100,000.00

201-500 employees:  $200,000.00

500 plus employees:  $300,000.00

Your next logical question will be what is included in compensatory and punitive damages?  Compensatory damages are also called actual damages and include emotional distress, pain and suffering (grief, anxiety, depression, embarrassment), medical bills, and mental impairment.  Compensatory damages typically require proof of mental health or psychiatric treatment.  Punitive damages are commonly referred to as “punishment damages” and punish the company for the wrong-doing, hopefully deterring them from committing the same offenses in the future.  In order to get punitive damages, you must prove that the employer acted with malice or reckless indifference.  Punitive damages are very rarely awarded by courts.  These damages together, are capped by the amounts set forth above.  The cap does not apply to back pay so we will move on to discuss that next.

BACK PAY

Back pay is the most often awarded damage in employment discrimination and ADA cases.  There is no cap on back pay.  Back pay includes all of the wages, salary, bonuses, commissions, and benefits (health insurance, 401k, paid time off, life insurance, etc.) lost because of termination or discrimination MINUS any amount you earned in the interim.  It also includes interest, overtime, shift differentials, and raises you would have received had you not been terminated.  One thing that is difficult for employees to understand is that your back pay is cut-off and stops if you get a new job making the same amount of money (or more) as your old job.  For example, if you are terminated on December 1st but get a new job making the same amount or more one week later, you would be entitled to back damages for one week of pay only!  However, if you are unemployed for a year and cannot find a new job, your back pay would be for one year. You have to keep looking for jobs and submitting applications while your case is in court! Your continued search for subsequent comparable employment is a crucial part of mitigating your damages.  And in case you are asking, “how will my old employer even know that I am working now?,” they are going to request copies of your tax returns during the course of discovery and you will be obligated to give these up.  Also worth noting, if you accept a new job but it makes less than your old job, you are still entitled to the difference in wages between your old job and new job to the present time. For example if you were making $50,000 per year as a store manager before being terminated, but then two months later find a new job as an assistant manager at a smaller store making $35,000 per year, you would be entitled to back pay for the full two months while you weren’t working, plus $15,000 annually thereafter (the difference between your old and new job) until the matter is resolved.

FRONT PAY

Front pay is available at the court’s discretion for employees who are still unemployed and where it appears unlikely that the employee will be able to get a new job for some time into the future.  The court estimates out how long it is likely before the employee could find a new comparable job and awards pay up until that future point in time.  You do not get front pay if you have a new job that is making the same or more than your old job. Unlike back pay, front pay is determined by the judge and not the jury and just because the jury awards you back pay does not mean that the judge will award you front pay.

ATTORNEY’S FEES

Reasonable attorney’s fees are covered by Title VII and the ADA, if you prevail.

REINSTATEMENT

Although most employees do not want to go back to work for the employer that terminated them and that they are now suing, reinstatement to your prior position with your old employer is an option under Title VII and the ADA. In my experience, and for perhaps obvious reasons, reinstatement is not a viable or common remedy in employment law cases.

MEDIATION

Mediation is a good thing and all employment cases in South Carolina federal court must be mediated.  At mediation both sides are encouraged to come to a compromise to help alleviate the risks of a trial that exist for both sides.  At the end of the day, if you go to trial, there is always a risk that a jury will side with the employer and you will recover nothing.  On the flip side, there is a chance that a jury will side with the employee and award large and embarrassing damages against the employer.  Mediation allows both sides to structure a settlement that they can live with and helps eliminate the uncertainty of trial.  Both sides are required to negotiate in good faith.  There can also be tax incentives to structuring a settlement out of court.

SUMMARY

In a typical ADA or Title VII case, you are likely to be awarded your back pay, if you prevail.  If you can prove compensatory damages by proof of mental health treatment records or witness statements, you may also get damages up to the statutory caps set forth above.  Punitive damages are rare but can be awarded, subject to the caps.  Front pay is sometimes available for employees who are still unemployed and are unlikely to become reemployed for some time into the future, but this is at the court’s discretion.  All cases must be mediated in federal court and a settlement allows both sides to work out a compromise and gives the ability to control the outcome of the matter.

Stay tuned next Monday for the second installment in this series which will focus on damages in FMLA (Family and Medical Leave Act) cases.

Stay Tuned for Upcoming Series: “What is my case really worth?”

Beginning next week, I will be writing a three part blog series on calculating damages in employment cases.  The first part of the series will focus on Title VII (gender, race, national origin, religion, and corresponding retaliation) and Americans with Disabilities Act (“ADA”) cases. Part two will deal with FMLA (“Family & Medical Leave Act“)  cases. Lastly, Part three will deal with ADEA (“Age Discrimination in Employment Act”) cases.  The first blog post will be published next Monday, March 25th.

I have found in my practice that one of the most difficult things to do is to help clients understand what their case is worth.  Unlike other lawsuits (car wrecks/personal injury, defamation suits, workers compensation, etc.), the federal government has enacted statutory caps in most employment cases.  These caps set the upper limit for what you could obtain on your best day in court.  I will be discussing the caps in detail in my upcoming postings.  Often times clients do not understand these caps and the way they limit their potential recovery.  I cannot tell you how many times I have people say that they have an employment case that is worth a million dollars.  Needless to say, there are very few employment cases that would bring that kind of award.  I will also be discussing front pay, back pay, liquidated damages, and punitive damages.  I hope this series will help others understand the way that damages are calculated in employment cases so that everyone can have a realistic picture of what to expect once litigation begins.