Wrongful Termination Damages

Calculating lost wages as a result of wrongful termination, many times a retaliatory act based on our whistle blower client having objected to an illegal activity, is a three step process. The first step is calculating your lost earnings, fringe benefits and retirement income that you would have received “but for” the termination. A jury (or arbitrator) examines the earnings history, education level, employer-specific factors and the labor market potential of similarly situation persons. Where our client has held a sales job, company-specific information such as sales pipeline, prospects and opportunities that the plaintiff had in place when terminated may be helpful for determining what The second step involves determining the amount of income a person can now expect to earn in their current or expected position. Finally, future losses must be reduced to present cash value of the future income stream. In short, a dollar received tomorrow is worth less than one received today because the current dollar can be deposited and earn interest. Various tables are used to determine that value (work life tables, interest rats and tax tables may be used).

In a recent wrongful termination here at Los Angeles Employment Lawyers, economic damages were split into two parts by the court, called “back pay and “front pay”. Back pay is the loss that the injured worker incurred from the wrongful termination or forced resignation until the time of trial. This is calculated as the difference between the earnings that the plaintiff could have been expected to earn and the actual or expected earnings from a new job. Generally, in California, income taxes are not considered. Front pay, on the other hand, is the difference between future wages that the plaintiff would have been expected to have earned and their current expected future replacement income.

How long into the future does a jury project (and hopefully, award) lost wages? If the former employer/defendant has a retirement plan, the worker may have been able to receive full retirement benefits before they would have stopped working. In contrast, how much longer does the plaintiff (realistically) plan to keep working? In our public employment cases, government employees generally have longer job tenure than private workers According to Bureau of Labor Statistics, private employment duration is 3.5 years, whereas public employees at all levels of government employment work 9.9 years. The “Life Cycle Model” assumes that a typical employee will earn a faster increase in pay over the first few years of employment, then slow down as the life cycle matures.

In many of our cases at , we alleged retaliation. One common form of retaliation is slander in the workplace. Slander is against California Civil Codes 43, 45 and 46(3). The latter code looks to whether the employee’s opportunity to earn a profit in their business field has been jeopardized. Thus, a financial analysis may have to look at these retaliatory and defamatory acts as reducing the potential of the employee to take a higher-paying job. Similarly, a false negative performance review could impact earnings. Call now to discuss your case with California’s leading employee-only law firm. Stephen Danz & Associates, 877 789 9707.