Lawyer Turned Accountant: Maximizing Damages in Employment Termination Cases by Francis J. Collins
As in nearly any case, a plaintiff ’s law-
yer in an employment termination case wants to maximize his client’s damages. Even if the case does not go to trial, a large and defensible claim for damages is a giant step toward settlement. Proceed with caution, however, because if the case does go to trial, the jury may pun- ish you for perceived piggishness. With that wisdom out of the way, let’s examine the elements of damages that might be available under the right circumstances. Remember, every type of employment case has different elements of damages available. When preparing for trial, make sure to check the case law relevant to your causes of action. For instance, damages are certainly treated differently under the FMLA and Maryland’s Art. 49B. Additionally, the damages available in a State common law sex discrimina- tion claim against a small employer under Brandon v. Molesworth, 341 Md. 621, 672 A.2d 608 (1996), are different when compared to the damages available pursuant to its older brother, Title VII. The most obvious element of damages
in an employment case is lost wages. After all, why do we trudge to work every day, fighting traffic and the elements? For a pay check. The most precise way to calculate lost wages is on a week-by- week or month-by-month basis. As we know, it is imperative that the Plaintiff have records to show that he mitigated his damages. Ford Motor Co. v. EEOC, 458 U.S. 219, 232, 102 S.Ct. 3057, 3066, 73 L.Ed.2d 721 (1982). Therefore, there will likely be some pretrial earnings to offset the Plaintiff ’s claim for lost wages. Create a spreadsheet and figure out what the person would have made and compare that to what that person, after termination, did make when he or she eventually found a job. As the case proceeds, you can easily add to this
Winter 2009
spreadsheet the new information you learn. It can also become more and more sophisticated as different elements of damages are added. It is also important to take into consid-
eration any off-sets that might apply. For instance, severance pay might be a valid off-set but pension payments might not be. Likewise, the Fourth Circuit held that unemployment compensation benefits may not be used to offset lost wages in a Title VII case. Equal Employment Op- portunity Commission v. Ford Motor Co., 645 F.2d 183, 196 (4th
Cir. 1981), reversed
on other grounds, Ford Motor Co. v. E. E. O. C., 458 U.S. 219, 102 S.Ct. 3057, 73 L.Ed.2d 721 (1982). See also National Labor Relations Board v. Gullett Gin Co., 340 U.S. 361, 71 S.Ct. 337, 95 L.Ed. 337 (1951). The second largest element of eco-
nomic damages is typically OPCs – “other personnel costs.” In the public sector, benefits are often estimated to
run from 30% to 45% of a person’s earn- ings. What do OPCs consist of? Health insurance, life insurance, social secu- rity, pension contributions, etc. These damages all depend on the employer and the choices the employee may have made while employed. Again, using a weekly spreadsheet can be essential. An employee may obtain health insurance later than when he finds a job. Therefore, separate columns will be needed for each element of economic damages. In an ap- propriate case you can collect either the cost of substitute health insurance or the amount of actual medical bills incurred. Fariss v. Lynchburg Foundry, 769 F.2d 958 (4th Cir.1985). A simple sample damages claim could
look like the table below. Under Title VII and other federal civil
rights laws you may be able to collect for punitive and non-economic damages up to $300,000. 42 U.S.C. § 1981a. Un- der that statute, compensatory damages
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