Economic Damages From Wrongful Termination

Economic Damages From Wrongful Termination

Written by : Mike Swift

The economic damages resulting from wrongful termination are substantial. An individual may become displaced from the labor market during a critical point in his or her career development. Even if an individual quickly finds re-employment following wrongful termination, the individual may have suffered economic damages if the earnings level pre-displacement is not quickly recaptured. There are two components to calculating the economic losses in wrongful termination litigation:

1. The likely compensation that the individual would have earned absent the wrongful termination and
2. The likely compensation that the individual can be expected to earn from alternate employment consequent to the wrongful termination.

The economic loss in a wrongful termination case is equivalent to the sum of:

1. The difference between the two compensation streams and
2. The foregone earnings growth.

The calculation of this loss can be based upon the plaintiff’s actual post-separation employment and earnings or on the statistically average employment and earnings the plaintiff could have received post-separation. Statistical information from the Displaced Workers Survey may also aid an expert in determining the economic damages resulting from wrongful termination