How to Calculate Damages in Employment Litigation

If you are involved in an employment litigation lawsuit—either as an employee who is suing or as an employer being sued—it is important to know what potential damages exist. Understanding what damages exist can help you determine what verdict a jury is likely to award and can help determine what an appropriate damage amount is if the case is going to be settled out of court.

Add up lost wages and other actual losses. These damages are referred to as compensatory damages and pay the employee back for any money he actually lost as a result of the employer's behavior. If the employee lost his job and it took five months for him to find a new one, then he may be entitled to five months of lost wages. If he found a new job but it didn't pay as much, he may be entitled to the difference between what he would have been paid had he not been fired illegally and what he was actually paid. If the employment litigation isn't a case of wrongful termination but is instead a case in which the employee was passed over for promotion for illegal reasons, then the lost wages will be equal to the difference between what he would have made had he been promoted and what he was actually paid.

Determine an appropriate amount for pain and suffering. Pain and suffering damages are available if the victim experienced emotional distress as a result of the illegal actions on the part of the employer. For example, if an employee was harassed at work or a hostile work environment was created for him that made him uncomfortable, he may have suffered stress and pain as a result of this and should be compensated for that.

Consider punitive damages. Punitive damages are available in order to punish the defendant. They aren't always awarded. They are generally only granted if the employer acted egregiously. For example, if the harassment was extreme or if the employer has a history of discriminating, then punitive damages may be awarded by a judge or jury. The punitive damages generally should not be more than three times the actual compensatory damages.

Add in attorneys fees. If the case arose from civil rights litigation, such as an employer's violation of Title VII of the Civil Rights Act of 1964, the plaintiff employee may be entitled to have his legal fees and court costs paid by the employer.