What Is the Typical Settlement for Wrongful Termination Lawsuits?

When you’ve been wrongfully terminated from your job, filing a lawsuit against your former employer may be the best path to justice and compensation.

Wrongful termination settlements can vary widely depending on the specific circumstances of your case, such as the severity of the employer’s misconduct, the strength of your evidence, and the extent of your damages.

While some wrongful termination cases settle for a few thousand dollars, others may result in settlements or verdicts in the hundreds of thousands or even millions of dollars range.

While every case is unique, understanding the factors that influence settlement amounts and the typical range can help you set realistic expectations.

Factors Affecting Wrongful Termination Settlements

Several key factors can impact the size of a wrongful termination settlement:

Employee’s Salary and Benefits

Your salary and benefits at the time of termination play a significant role in determining your settlement amount. Higher-paid employees tend to receive larger settlements because they have lost more in wages and benefits.

For example, if you were earning a six-figure salary with comprehensive health insurance and stock options, your settlement would likely be higher than someone in an entry-level position with basic benefits.

Strength of the Case

The strength of your wrongful termination case is another crucial factor. Cases with clear evidence of discrimination, retaliation, or other illegal conduct by the employer typically result in higher settlements.

On the other hand, if the evidence is more ambiguous or the employer has a strong defense, the settlement may be lower to account for the risk of losing in court.

Employer’s Conduct and Egregiousness of Termination

Particularly egregious conduct by the employer can significantly increase a settlement offer. If your employer engaged in blatant discrimination, sexual harassment, or other severe misconduct, they may be more willing to settle for a higher amount to avoid the negative publicity of a trial.

In some cases, the possibility of punitive damages being awarded at trial can also motivate employers to settle for more. Punitive damages are meant to punish the employer for particularly bad behavior and can substantially increase the total settlement.

Range of Typical Wrongful Termination Settlements

While there is no true “average” settlement, most successful wrongful termination cases result in settlements ranging from $5,000 to $100,000. However, outliers on both the low and high end do exist.

For example, a low-wage worker with a weak case may settle for as little as a few thousand dollars. On the other hand, a high-level executive with a strong case and evidence of severe misconduct could potentially receive a settlement in the millions!

Wrongful Termination Legal Damages

The latest data showed that 64% of suits filed with the U.S. Equal Employment Opportunity Commission alleged wrongful discharge.

The damages you can recover in a wrongful termination lawsuit depend on the specific circumstances of your case and the laws of your state. However, some common types of damages include:

Back Pay and Front Pay

Back pay compensates you for the wages and benefits you lost from the time of your termination to the date of settlement or court judgment. Front pay covers the future wages and benefits you would have earned if you had not been wrongfully terminated.

In our experience, back pay and front pay make up a significant portion of most wrongful termination settlements. Accurately calculating these damages is crucial to ensuring you receive fair compensation.

Emotional Distress and Reputational Harm

Losing your job can take a toll on your mental health and professional reputation. You may be able to recover damages for the emotional distress, anxiety, humiliation, and other psychological impacts of the wrongful termination.

Additionally, if the circumstances of your termination have damaged your reputation and made it harder to find new employment, you may be entitled to compensation for this harm to your professional standing.

Punitive Damages

In rare cases involving particularly egregious conduct by the employer, the court may award punitive damages. These damages are not meant to compensate you for your losses but rather to punish the employer and deter similar misconduct in the future.

While punitive damages are only awarded in a small percentage of cases, they can dramatically increase the total settlement or judgment when they are granted. The potential for punitive damages can also incentivize employers to settle for a higher amount to avoid the risk of a massive jury award.

Federal Laws Against Wrongful Termination

In the United States, most employment relationships are considered “at will,” granting employers the right to terminate employees for virtually any reason, or even for no reason at all.

However, there are important exceptions to this rule, as federal laws protect employees from being fired based on certain personal characteristics under Title VII of the Civil Rights Act of 1964 or for exercising their legal rights.

These laws shield employees from discrimination based on factors such as race, color, religion, sex, national origin, disability, or age (40 and above), which are known as “protected classes.”

Additionally, employers are prohibited from retaliating against employees who take advantage of their rights under federal law, such as taking leave under the Family and Medical Leave Act, filing a sexual harassment complaint, submitting a workers’ compensation claim, or reporting unsafe working conditions (known as “whistleblowing”).

When an employee is terminated for any of these unlawful reasons, they may have grounds for a wrongful termination lawsuit against their employer.

Why Most Wrongful Termination Cases Settle

The vast majority of wrongful termination cases end in settlement rather than going to trial. There are several reasons for this:

First, employers often prefer to settle to avoid the negative publicity that can come with a public court case. This is especially true when the allegations involve discrimination, harassment, or other serious misconduct.

Second, settling allows employers to avoid the expense and uncertainty of taking a case to trial. Even if an employer believes they have a strong defense, the cost of litigation and the risk of a substantial jury award can make settling a more attractive option.

Finally, many wrongful termination cases are resolved through negotiation or mediation before ever reaching the trial stage. Both sides have an incentive to reach a mutually agreeable resolution rather than rolling the dice in court.

Maximizing Your Wrongful Termination Settlement

To maximize your potential settlement, it’s essential to gather strong evidence supporting your case. This may include documents related to your employment, performance reviews, witness statements, and any communications or recordings that demonstrate the misconduct of your employer.

You should also keep detailed records of any economic losses you’ve suffered due to the termination, such as lost wages, job search expenses, and medical bills for conditions caused by the stress of losing your job.

Perhaps most importantly, it’s in your best interest to work with an experienced employment law attorney. A knowledgeable lawyer can help you build the strongest possible case, negotiate with your former employer, and fight for the maximum settlement you deserve.

Hiring An Employment Lawyer

For example, let’s say you were a senior manager earning $150,000 per year with generous benefits. After complaining about witnessing sexual harassment of a colleague, you were suddenly fired for “performance issues” despite years of positive reviews.

In this scenario, an employment lawyer could help you gather evidence of the harassment, your complaint, and the retaliatory firing. They may also uncover a pattern of similar retaliation against other employees who spoke up. With a strong case and the threat of substantial damages, your attorney could potentially negotiate a settlement of several hundred thousand dollars or more.

It’s important to remember that wrongful termination cases can take time to resolve, often a year or more. Be prepared for a lengthy process, but know that a successful settlement can provide the financial resources you need to move forward with your life and career.

How Much Do Wrongful Termination Attorneys Charge?

According to NOLO, wrongful termination attorneys charge for their services through three main fee structures:

  • Contingency Fees: The attorney takes a percentage of the settlement or award. Most clients (75%) pay this way, typically between 30% and 35%, with the average just under 30%.
  • Hourly Fees: The attorney charges an hourly rate, which varies based on experience and location. Only 10% of clients use this structure, with around 35% paying between $100 and $200 per hour, and 30% paying over $300 per hour.
  • Combination Fees: This involves an initial retainer fee and a percentage of any settlement or award. About 15% of clients follow this arrangement.

Legal Considerations in Wrongful Termination Cases

Wrongful termination laws vary by state and the specific type of claim. For example, in an at-will employment state, a wrongful termination would need to show a violation of anti-discrimination laws, employment contracts, or public policy.

A question we come across frequently is whether an employer’s stated reason for termination was just a pretext for illegal discrimination or retaliation. An experienced employment law attorney can assess the facts of your case and determine the most applicable laws and legal strategies.

Additionally, some states like California place a duty to mitigate damages on wrongfully terminated employees. This means you have an obligation to seek comparable employment rather than simply waiting for a settlement.

Failure to mitigate damages could potentially reduce your settlement amount. The loan representatives at Mayfair can help connect you with resources for understanding your state’s specific wrongful termination laws.

Get the Support You Need with Mayfair Legal Funding

If you’re in the midst of a wrongful termination lawsuit, pre-settlement funding from Mayfair Legal Funding can provide the financial support you need to pursue the maximum settlement. Unlike a traditional loan, pre-settlement funding is only repaid if you win your case, and there are no monthly payments or credit checks required.

At Mayfair, we understand the stress and challenges that come with a wrongful termination case. That’s why we strive to make the funding process as simple and straightforward as possible. Our experienced team will review your case and provide a cash advance to cover your living expenses, allowing you to focus on your legal battle without worrying about making ends meet.

Don’t let financial pressure force you into accepting a lowball settlement offer. With Mayfair Legal Funding on your side, you can level the playing field and fight for the justice you deserve. Call us today at (888) 357-1338 to learn more about how we can help with your wrongful termination case!

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Frequently Asked Questions (FAQs)

How long does a wrongful termination case typically take to settle?

Most wrongful termination cases take several months to a year or more to reach a settlement. The timeline depends on factors such as the strength of the evidence, the willingness of the employer to negotiate, and the court’s schedule if the case goes to trial.

Can I sue for wrongful termination if I was an at-will employee?

Yes, even at-will employees can sue for wrongful termination if the reason for their firing was illegal. This includes terminations based on discrimination, retaliation for engaging in protected activities, or violations of public policy.

What if I can't afford an attorney for my wrongful termination case?

Many employment law attorneys work on a contingency basis, meaning they only get paid if you win your case. Contingency fees allow you to pursue justice without upfront legal costs. Additionally, pre-settlement funding can provide the financial resources you need to cover living expenses while your case is pending.

Can I still sue for wrongful termination if I received severance pay?

In most cases, accepting severance pay does not prohibit you from suing for wrongful termination. However, some severance agreements include a waiver of the right to sue, so it’s essential to have an attorney review any documents before signing. Even if you’ve already accepted severance, you may still have a case depending on the circumstances of your termination.