By Lawrence P. Schaefer |
Lawyers for terminated employees too often focus solely on the past wage loss in seeking a damage award, and thereby often ignore or dramatically undervalue other compensable areas of recovery. This includes future wage loss that can extend for years, benefits and other components of compensation such as options, cash/incentive awards which vest over time, and emotional distress/reputational harm hat should always be a significant component of any claim arising from a termination. This limited approach often extends to falling into the “trap” of negotiating a settlement which exclusively, or even primarily, focuses on wage/salary loss, and accepts risk reductions to this component of loss when negotiating. The most effective advocates for plaintiffs in employment cases understand that these other areas of loss, often referred to as “soft” damages, have to be requested to the full extent permitted under the law in seeking an appropriate award at trial, and have to be adequately valued when conducting effective negotiations.
Damages for Emotional Distress
Emotional distress damages, even when considered “garden variety” (i.e. not supported by medical testimony or records), can be significant, sometimes extending well into six figures in some termination cases. See Baker v. John Morrell & Co., 266 F. Supp.2d 909, 944-45 (N.D. Iowa 2003) ($735,000 emotional distress award upheld to discrimination victim who was constructively discharged). Moreover, when this distress is bolstered by a diagnosable medical/psychological condition that establishes its’ severity, this will only increase the prospect for a significant recovery at trial. See, e.g. Luu v. Seagate Tech., Inc., 2001 WL 920013 (D. Minn. 2001) ($1.9 million awarded to discrimination victim, $800,000 in compensation for emotional distress suffered). In these circumstances, the most effective advocates also understand that a discriminator, like a tortfeasor, takes the victim as he or she finds them, and is liable for the full extent of mental anguish caused by discriminatory or retaliatory conduct, even if the victim is an “eggshell” plaintiff, susceptible to experiencing extreme anguish far beyond what would be experienced by a reasonable person. See Rowe v. Munye, 702 N.W.2d 729, 740 (Minn. 2005); see also Jenson, et al. v. Eveleth Taconite Co., 130 F.3d 1287, 1294-95 (8th Cir. 1997).
It’s About More than Wage Loss
Lawyers sometimes compound the mistake of focusing solely on wage loss by limiting even this narrow focus to back pay loss, ignoring the right to recover significant front pay loss. Prevailing plaintiffs in employment cases have a right to recovery of front pay (in lieu of reinstatement), and this recovery can sometimes extend for years, often well beyond the duration of back pay loss. See e.g., Hukkanen v. Int’l Union of Operating Eng’rs, Hoisting & Portable Local No. 101, 3 F.3d 281, 286 (8th Cir.1993) (ten years of front pay awarded). In addition to front pay, lawyers need to factor in the full value of benefits (often worth around 25% of wages), and all other compensation, such as pension and 401(k) contributions, option grants which have not vested or had to be exercised early, and other incentive awards subject to cliff or incremental vesting, and thus forfeited in whole or in part at termination. Only when all of these factors are considered can an appropriate assessment of economic loss take place.
Lawyers at Schaefer Halleen are intimately familiar with all of the above legal standards, and can thus ensure that our clients recover the greatest possible award at trial, and that any settlement pre-trial adequately considers all elements of the potential recovery.
As one of the most recognized plaintiff’s lawyers nationwide, Larry Schaefer has earned the respect of judges and other lawyers for his thorough and aggressive client advocacy in negotiation and litigation. He concentrates his practice representing people who are injured through employment discrimination practices. Larry serves as the firm’s CEO and head of litigation.
