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What to Expect When Settling a Wrongful Termination Suit

Posted on June 18, 2018 | Firm News

Wrongful termination cases arise whenever an employer fires an employee in violation of the law or an employment agreement. The resulting lack of a job can bring on loss of income, loss of benefits, and emotional distress depending on the conditions of the firing. In California, several options for wrongful termination suits exist:

  • Contract claims – When an employer fires an employee in violation of the terms of the employment contract or other written and verbal agreements
  • Discrimination claims – When the firing is based on protected characteristics, such as race or gender
  • Retaliation claims – When an employer makes a firing decision against an employee that has exercised their employment rights, such as taking time off or filing a complaint
  • Violation of public policy – When an employee faces termination for exercising a legal right, such as participating in civil rights protests in his or her free time

Some wrongful termination suits combine with additional suits, such as personal injury claims. A personal injury may include physical and emotional injury, as well as defamation of character.

Potential for Settlement

Wrongful termination cases may prove difficult for both employers and employees. Employers take on the risk in trial that, even if they win the case, potentially harmful information about their company may arise.

Since civil trials are predictable by nature, both parties may be interested in settling before entering the courtroom. Because of this, the employer and employee agree to settlement in most wrongful termination claims.

Reasons for Settlement of Wrongful Termination Claims

Aside from avoiding an uncertain court procedure, many other reasons exist for moving to settlement. Beyond recovering financial damages, employees may pursue wrongful termination out of vindictiveness, to discourage similar actions in the future, or to receive closure for particularly stressful and defaming terminations.

By contrast, an employer may avoid settlement to circumvent similar claims in the future. An employer may also have insurance that covers the cost of legal expenses. While many wrongful termination claims end in settlement, it is not a guaranteed outcome.

Factors Influencing the Value of Wrongful Termination Claims

The settlement value is based on how much loss the employee suffered because of the firing. Several factors serve as the basis for determining value of a wrongful termination claim:

  • Wage Loss – The amount of wages lost between the date of termination and the present. A fired employee must attempt to mitigate wage damages by seeking another job. If the employee has found a new job or received unemployment benefits, those values take away from the wage loss total. If the employee has not found new employment, the value may include future loss of wages as well.
  • Benefit Loss – The value of lost benefits is part of the wrongful termination claim’s value. Employees who must switch to paying for their own insurance out of pocket can receive compensation for these costs. This includes both major benefits, such as health insurance, and fringe benefits, such as loss of stock options.
  • Emotional Distress – Losing one’s job can lead to various levels of emotional distress, especially in cases of wrongful termination. Anxiety, depression, and other emotional suffering play a role in determining value of compensation. Employees can most likely recover emotional distress damages when their termination is due to extreme alleged actions, such as discrimination and harassment, or if the employer spread defamation following the termination that damaged the employee’s chances of finding new work.

These factors affect the value of a wrongful termination suit in court, but the involved parties should account for these damages in settlement as well.

Whether an employee agrees to settlement or pursues a court trial for their wrongful termination case, the help of a wrongful termination attorney can be invaluable. At the Law Office of Omid Nosrati, we will advocate for employee’s rights to ensure a fair value for compensation.