Wrongful Termination: How Much Can I Expect in Compensation?

AVERAGE COMPENSATION

$37,200

Monetary settlements and court awards in wrongful termination cases typically range from $5,000 to $80,000.

  •  Monetary settlements and court awards in wrongful termination cases typically range from $5,000 to $80,000.

If you think you’ve been fired illegally from your job and are considering suing your former employer for wrongful termination, you probably want to know how much money you can expect to receive in compensation for your lost wages and other damages. We surveyed readers who recently had a wrongful termination claim to get an idea of typical settlements or awards—and what makes a difference in the amounts. Here’s what we learned.

The Range of Compensation in Wrongful Termination Cases

Our survey showed that for readers who received monetary compensation (in an out-of-court settlement or a court award after a trial), the overall average was about $37,200. Compensation typically ranged from $5,000 (or less) to $80,000, with a few readers receiving significantly more.

When you’re looking at these results, keep in mind that the readers who participated in this survey had come to our websites to find information about a wrongful termination claim and to look for a lawyer. It may be that those with the strongest cases and the most damages (which can leader to higher settlements or awards) were quickly able to retain a lawyer elsewhere and therefore did not participate in the survey.

It’s also worth mentioning that more than half of readers who believed they had a wrongful termination claim weren’t able to get any kind of compensation. This low success rate is probably due to common misconceptions about employers’ actions that may seem unfair but aren’t illegal. (For more information, see our articles on the likelihood of receiving a settlement or award for wrongful termination and what types of claims are most successful.)

The Connection Between Damages and Compensation

Nearly all of our readers who received compensation in their wrongful termination claims did so through out-of-court settlements rather than court awards after trial. But whether you settle with your former employer or go to trial, any money you receive is generally meant only to compensate you for the losses (or “damages”) you experienced as a result of the illegal firing, such as:

  • lost earnings (including the amount of your former wages while you were out of work as well as the difference between your old and new salaries if you found another job that pays less)
  • lost benefits (including increased premiums for health insurance as a result of losing employer-provided insurance)
  • the costs of looking for a new job
  • emotional distress, and
  • medical expenses (due to changes in insurance coverage as well as treatment for emotional distress or other consequences of your termination).

So if you were able to find a new job fairly quickly at an equivalent salary, you might have a difficult time obtaining much in the way of compensation—even if you have solid proof that your former employer acted illegally. Our survey bears out this general rule. Readers who received settlements of less than $5,000 tended to have no or little wage loss as a result of their wrongful termination, while those who received settlements at the upper end of the spectrum tended to experience significant lost earnings, as well as emotional distress and other damages.

In some states and for some kinds of wrongful termination claims, juries may also award punitive damages if the employer’s illegal actions were particularly outrageous. Punitive awards are meant to punish wrongdoing and prevent similar behavior rather than to compensate for an employee’s losses, but they’re hard to obtain and nearly impossible to predict.

How Having a Wrongful Termination Lawyer Affects Compensation

You probably can’t do anything to increase the amount of damages you’ve suffered as a result of being fired illegally. (Even if you could, it wouldn’t be wise to turn down a new job offer in the hopes of getting a fat settlement check from your former employer, because employees are required to reduce their losses as much as they can.) But as you pursue your claim, you can make choices that are likely to affect the amount of compensation you might receive. One of the most important of those decisions is whether to hire a lawyer.

Our survey showed that readers who had an attorney on their side received settlements that were 150% higher, on average, than those who pursued wrongful termination claims on their own. Of course, hiring a lawyer also costs money. However, even after subtracting 29% for attorneys’ fees (the average percentage of compensation that our readers paid for legal fees), those with lawyers walked away with nearly $15,500 more than unrepresented readers.

Negotiating Helps in Wrongful Termination Cases

It might seem obvious that you’re likely to receive a higher settlement if you negotiate rather than simply accepting your former employer’s first offer. That may not be true in every case, but it’s still a very effective strategy for getting more money. Nearly 80% of readers held out for a better deal after receiving a settlement offer. As a result, they ended up with more than twice as much in compensation, on average, compared to those who didn’t try to fight for more.

How Filing a Wrongful Termination Lawsuit Affects Compensation

Only about one in five of our readers took the next step of filing a lawsuit against their former employers, but it made a difference in the amount of compensation they received. Readers who filed a suit ended up with nearly $12,000 more, on average, than those who didn’t file. Filing a lawsuit starts a process of “discovery”—taking depositions and making other formal requests to obtain evidence. This puts the employee in a stronger position to negotiate with the former employer. So even though wrongful termination claims rarely to go to trial, your former employer will probably be persuaded to make a better settlement offer if you file a lawsuit.

Employer Size Matters in Wrongful Termination Claims

Our survey revealed a connection between the size of the employer and the amount of compensation that former employees received for their wrongful termination. In general, readers who were illegally fired by larger employers received settlements than were nearly twice as high, on average, compared with those who had worked for smaller employers. Some of this difference may be explained by the fact that larger employers have more money to offer heftier settlements, and they may be more worried about their reputation. Also, for wrongful termination claims based on illegal discrimination or harassment, federal law sets limits on how much a former employee can receive for damages—and those limits go up as the employer size increases.

Nonmonetary Settlements and Awards

If you’ve been out of work for a long time after being wrongfully terminated—or you’ve had other significant financial losses—money is no doubt at the forefront of what you want in compensation. Still, some employees agree to settlements (or obtain awards after a trial) that don’t include monetary damages. For example, a settlement may require the employer to give you back your former job (called “reinstatement”) or give you a good reference. But nonmonetary settlements in wrongful termination cases are very uncommon. The vast majority (83%) of our readers with successful outcomes received settlements that included money to compensate them for their losses.

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