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Not All That Glitters Is Gold: Damages in Employment Law

August 17th, 2018 by David Minces

The legal field can be very confusing, especially since so much varies between the different types of law. It may seem as though all lawyers are cut from the same cloth, but this far from the truth in a literal sense: as we wrote in a previous article, lawyers in Hawaii often wear Aloha shirts instead of charcoal suits and silk ties. The process of awarding damages is no exception. Employment law has a method and philosophy of calculating court payouts that contrasts from other law fields.

What is the philosophy of awarding damages in employment law?

If you turn on your television, you might see a personal injury lawyer promising millions of dollars in damages for your accident with an 18-wheeler, or a medical malpractice attorney offering a similarly large sum for your poorly-constructed hip. For some lawyers, multi-million dollar rewards are common, if not the norm. Large sums like these often occur in cases when the plaintiff’s physical well-being has been harmed. These damages seek to compensate victims for their medical expenses and physical pain, and serve as punishments for guilty parties.

In contrast, the nature of employment law minimizes the amount plaintiffs are able to receive. Unlike more highly-paying cases, medical expenses and physical pain are rarely factors when dealing with employers in the courthouse. One exception to this is on-the-job injuries, where one may have to sue his employer for worker’s compensation or negligence. Worker’s compensation is an area of employment law Minces PLLC does not specialize in (though we can recommend great lawyers who do), and negligence leading to injury or death actually falls more under tort law, not employment law.

Employment law also differs from other types of law in that damages are usually not intended to punish employers. Rather, the Plaintiff’s award is meant to create a situation comparable to if their employer had acted in accordance to the law. Thus, it is more accurate to see damages as money that an employee has already worked for but has not received. Unless you have an extremely large salary, you are unlikely to see a million dollar judgment for a discrimination or FLSA claim. It is rare in employment law for an employee catch a financial windfall from his employer acting illegally, even if he receives the maximum possible damages.

How are losses in employment law calculated?

Calculating how much an employer should pay to repair illegal actions is always tricky. Damages in employment law are generally separated into five categories. The most common type, and generally most of what an employee receives, is back pay. Back pay allows workers to recover money attached to work and unemployment before a settlement is reached. This includes pay for time looking for a new job after wrongful termination, raises that were not received due to discrimination, and unpaid overtime. A second type of pay is front pay, money attached to time after settlement. It includes, for example, pay for unemployment after settlement, which allows the employee some additional time to get back on his feet. Unlike other types of damages, back pay and front pay are not capped. However, they are limited by the duty to mitigate losses: the obligation to lessen the effects of an employer’s illegal conduct. For example, if you are wrongfully terminated, you must actively search for another job in order to receive the maximum amount of damages possible.

On some occasions, an employee may receive compensatory/punitive damages or injunctive relief. Compensatory damages are prescribed by statute, vary based on the cause of action and serve either to punish particularly egregious violations of law or to ameliorate the harm done to employees (such as having to wait to obtain unpaid wages). Injunctive relief rewards employees who bring unfair codified company policies to the attention of a judge, who then forces the company to change that policy. These forms of damages can make up the bulk of the damages a Plaintiff receives, but this is rare. Additionally, these damages are capped in Texas. The best scenario most can expect is for a settlement or judgment to put them in a position similar to what they would have been in had their employer not acted wrongly.

This article should clear up any misinformation about the damages possible in employment law. Though advertisements often tell us that we can get rich by going to trial, in most employment disputes, an employee’s damages will be very similar to their salary. That is not to say that suing an employer for wrongful actions is not worth it. You deserve every penny your employer owes you, and Minces PLLC will use its decades of legal experience to help you get what is rightfully yours.

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