Getting fired from your job is one of the biggest fears that any employee has at the back of their minds. When your personal stability is shattered because a major source of income is taken away, it becomes a stressful and at times, a traumatic experience. But what if you were terminated unjustly or the grounds for removing employment are unfounded? Can you sue your employer for damages caused by your termination?
In this episode of Walking Papers, attorney Josh Van Kampen of Van Kampen Law discusses wrongful termination damages and what lawyers typically deal with in cases like this. There are different types of damages that you can seek to recover, and Attorney Van Kampen refers to these as buckets. 02:51
There’s the back pay and back fringe benefits 03:56, the discretionary front pay and fringe benefits 08:11, reputational damages 09:40 and consequential damages 10:57. He also talks about other buckets that my have damage caps on them, like emotional distress 12:47 and liquidated punitive damages 19:23. Additionally, you can also have your previous employer pay for any attorney’s fees that you will incur during the entire proceeding. 22:09
It’s important that the legal time you hire not only figure out the actual worth your wrongful termination case is, but to watch out for any pitfalls the company may lead you into, especially during questioning. 16:36
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The Walking Papers is a bi-weekly podcast by Van Kampen Law, a plaintiff-side employment law firm based out of Charlotte, NC, This podcast aims to give listeners, who are on the wrong side of some sort of situation at work, practical advice on how to turn the tables on their employers. This podcast is just an educational resource. It does not constitute legal advice and is no substitute for consulting an employment attorney about your unique situation before making legal decisions. Visit our website for more online resources and videos at NCemploymentattorneys.com, or better yet, call (704) 247-3245 for a free initial intake interview so Van Kampen Law can evaluate your case.
Intro: 00:01 Human resources, employee relations, the legal department are aligned against you. Your employer has trained for this day, the day you’ve become an expendable number at work. There are robust laws that may protect you, but unlike the company, you’ve not been drilled on how to wield them. You’re playing catch up. There are pitfalls to avoid and countermeasures to deploy that may save your job or put you in the best position to negotiate a favorable settlement. Minutes matter. Your words and actions matter even more. The Walking Papers podcast offers the first foray into learning how to turn the tables when you’ve been targeted at work. Knowledge is power. Let’s get started.
Robert Ingalls: 00:45 Welcome to episode 9 of the Walking Papers podcast. I am Robert Ingalls and I will be your host. The title of this episode is The Price is Right. What can you recover if you win your wrongful termination case? Tell us about that title, Josh.
Josh Van Kampen: 01:04 I remember being at pop pop’s house, who’s my grandpa and, I hope that I’m right, I’m pretty sure it was 11 o’clock in the morning. Price is Right, or maybe noon, every day. And maybe the younger listeners may not even know what Price is Right is, but it was a game where you were basically guessing to the dollar, the price of a car or a washer or dryer, things like that. And in a wrongful termination case, part of what a lawyer is going to do for you is figure out what your case is worth. And we’re going to actually help you to do that in this podcast by explaining what sort of factors lawyers consider when they’re figuring out the price of a wrongful termination case.
Robert Ingalls: 01:48 Got you. So let’s say I’m thinking of filing a wrongful termination case, but I really don’t know whether it’s worth it. What kind of questions should I be asking myself?
Josh Van Kampen: 01:58 Well, when we value a case, we do so on two axis. So the first is, what is the likelihood that we’re going to win in our case, and I think we’ll probably do a separate podcast on that one, Rob, to try to predict likelihood of success and with the factors we consider on whether or not we’re going to win. But the other axis, which is a lot easier to analyze is, assuming you win, what are you likely to receive? What sort of damages are you likely to receive from a jury? And on that one it’s math, and buckets. And so there are different buckets that a jury or a judge can put money in. And so we’re going to go over those various buckets and describe them and also some ranges of dollars that can be put in those buckets.
Robert Ingalls: 02:47 Gotcha. Tell me about some of those buckets.
Josh Van Kampen: 02:51 All right. So lucky seven, we’re going to rattle them off altogether, just the roadmap. First we’re going to talk about back pay and back fringe benefits. That’s bucket one. Bucket two is front pay and benefits, which is basically future lost wages. The third is reputational damage. The fourth being what are called consequential damages. Fifth, pain and suffering or emotional distress. Sixth, liquidated damages or punitive damages and then the final bucket, my favorite bucket, attorney’s fees; attorney’s fees and costs. Unfortunately in the employment claims, that are broad, the employer is actually ordered to pay attorney’s fees and costs for the employee and so we’ll speak about how that works as well.
Robert Ingalls: 03:44 So let’s go ahead and break some of those down. Let’s start with back pay and fringe benefits.
Josh Van Kampen: 03:48 With back-pay, just emphasize back. This is backward looking. So at some point, if the case doesn’t settle you’re going to have a jury trial. And that jury trial, a typical lifespan of a case these days is between 18 months and 24 months. So let’s assume two years from now, you won your jury verdict, what could you get in back pay? Well, that would be any money that you would have earned had you not been terminated from your employer. So that’s easy to do because we’d have access to your W2 statements and also your paychecks to know what you would have earned. And so the meter just goes, no different than if you’re in a taxi cab, you get in and you’re driving around and you see the meter run. Well, the meter is running on your lost wages and benefits from the day after that your terminated. So we’ve got to calculate and figure out what you would have earned over those two years.
Josh Van Kampen: 04:43 Now the bad news is that the employer actually gets credit for any money that you earn after you’ve been terminated. So understand that you can’t be terminated and sit on your couch, put your feet up and binge-watch on Walking Dead episodes. You have a duty to mitigate your damages, which means you have a duty to try to find comparable employment. And if you don’t do that you can actually have your damages cut off because you’re expected to conduct a “reasonably diligent search.” But understand, once you get that job, in terms of what you’re going to recover in your back pay award, it’s going to be deducted dollar for dollar from anything that you earn from your new employer.
Josh Van Kampen: 05:31 So sometimes it’s a catch 22 for an employee because on the one hand, for your legal claim it’s worth more if you are out of work a longer period of time, or if you take a job that is making substantially less than your old job, the value of your legal claim actually goes down because the employer is getting a credit, dollar for dollar, for those earnings. But the flip side of it too is, if you don’t conduct your reasonably diligent search, that can also cut off your damages. So what I always tell my clients is look, you live in the real world, not the legal world. So, go out there, try to get the best job you can, as soon as you can. Don’t worry about the value of a legal claim, but just understand that the more successful you are in that job search, the lower your back pay award is going to be. So that’s back pay.
Josh Van Kampen: 06:29 Now let’s talk about back fringe benefits. So fringe benefits are the medical insurance, vision, dental, 401K match, pension, health savings, account eligibility. All the sort of bells and whistles that you love to have working for a company. If you are out of work and let’s say you had to elect COBRA insurance, for example, and you bought COBRA for six months, well you can recover the cost of that COBRA premium for six months. Or let’s say you couldn’t afford COBRA and so you were now incurring out-of-pocket medical expenses that would have been covered if you would have never been fired, we can recover those out-of-pocket medical expenses as well. And same thing goes with a 401k match, that’s easy to do. So if before you were the beneficiary of a 3% 401K match from the company. You’re fired. Your new employer doesn’t have a 401K match. We’re going to want to recover that lost 3% 401k match.
Josh Van Kampen: 07:33 Now what’s nice is that you also get interest. So add up whatever those figures are, at least in North Carolina, you can recover 8% interest on those amounts, which is a nice feature, especially since at least right, as of today the markets are cratering as we’re filming this podcast here, in March 2020.
Robert Ingalls: 07:54 And at least if they do drag it out, you’re recovering something additional for that.
Josh Van Kampen: 08:01 Right. And then you say thank you very much.
Robert Ingalls: 08:04 That’s probably not what you’re feeling, but I’m sure-
Josh Van Kampen: 08:06 Right.
Robert Ingalls: 08:07 So onto the second one, future pay and fringe benefits.
Josh Van Kampen: 08:11 Right. So understand with back pay and benefits, that’s automatic. So if you win, you’re getting your back pay, you’re getting your back fringe benefits. Front pay or future lost wages, that’s discretionary. The judge in your case, not the jury, is going to decide whether or not you should receive any future lost wages. And so on the top end, the most that obviously that you could seek to recover would be whatever you would have earned through age 66, which is the standard retirement age.
Robert Ingalls: 08:44 So you can’t just say, I’m nimble, I was going to work to 70?
Josh Van Kampen: 08:46 I have clients that argue that all the time. But so 66 is the norm but let’s be realistic. If you got terminated and you were 40, is it fair for us to expect the company to pay you 26 years of front pay? No, of course not. Because you’re not going to be unemployed for 26 years. So in negotiations anyway, a general rule of thumb for me is somewhere around five years. But remember we were talking about mitigation earnings. So even when you’re calculating your front pay, we’re still going to be deducting what we’re projecting to be your mitigation earnings in the future. So let’s say in the hypothetical, you make 50 grand less per year in your new job, well we’re going to want to get 50 grand times five years of future losses.
Robert Ingalls: 09:35 All right. That brings us to reputational damage.
Josh Van Kampen: 09:40 On this one, whenever you’re terminated, especially if you’re terminated for cause, and let’s say that’s a pretext for discrimination, that termination for cause is it’ll damage your reputation. So it’s always frustrating for me where I have a client who has meticulously worked their way up a career ladder over, say 20 years of employment and then all of a sudden they inherit a new manager who wrongfully terminates them or has a bias against them. You get knocked off your ladder, it’s really hard to get back on when you have a termination on your record. And so you can also recover reputational damages separate and apart from your future lost wages. Question is, how do you quantify that? Sometimes we’ll hire a forensic accountant or a vocational expert to testify about that issue but ultimately it’s like pain and suffering in the sense that you can put a number on it, but it isn’t necessarily an exact science.
Robert Ingalls: 10:46 All right, well that takes us to consequential damages.
Josh Van Kampen: 10:49 Yeah and that’s the one that, why couldn’t they give it a better name? You can’t figure out what the heck consequential damages mean.
Robert Ingalls: 10:56 Not from the context.
Josh Van Kampen: 10:57 Right, exactly. So let me translate that. It’s basically miscellaneous damages that you’ve suffered as a consequence of your job loss. It’s not uncommon for folks to have to cash out their 401K plans to make ends meet after a termination. You incur a penalty for doing that so let’s assume it was a $20,000 penalty, you can recover that $20,000 back from the employer if you win. Let’s say you had to take out a home equity loan in order to keep your house, and that cost you 20 grand in interest, as a consequence of the termination, we can recover that interest as well. And then I’ve had clients who had to sell family heirlooms or prized possessions just to make ends meet and to make such sales under duress. So if it was calculable that you got 20% less on an item because you needed to sell it in a hurry, we can seek to recover that.
Josh Van Kampen: 11:58 Also within consequential damages are relocation expenses. So if you’ve got to move, pack up, you had to hire a mover, you had to sell your house, hire a real estate agent, you had to pay the real estate commission. Those are all damages you suffered as a consequence of a termination and we can seek to recover those as well. Now importantly on back pay and front pay and fringe benefits and consequential damages, there are no damages caps on those. We’re about to talk about some buckets in which there are caps on how much a jury or a judge can award. There are no caps on those first three buckets we’re talking about.
Robert Ingalls: 12:42 All right, so then that brings us to pain and suffering emotional distress.
Josh Van Kampen: 12:47 Yeah. So this one is hard to talk about. Well first of all we were just talking earlier about math and formulas. Well with pain and suffering or emotional distress, there is no formula for calculating that. And so even when we’re in trial, the lawyers even struggle to figure out, well what should we ask the jury to award for pain and suffering or emotional distress? And to some extent it’s really just going with your gut. But there are certainly different factors that we consider in valuing what sort of emotional distress or pain and suffering we’re going to ask for.
Josh Van Kampen: 13:26 The most important one for me is, is there a medical basis? So for listeners who have been wrongfully terminated, you know how you’re feeling as you’re listening to this. You can’t sleep. You’re racked with anxiety. You used to play volleyball all the time, and now you’re not playing volleyball. You’re not going to the movies. You look in the mirror and you know that you’re different, but you haven’t gone and talked to a doctor or a therapist. All you’re doing is playing right into the employer’s hands by not doing that because guess what they’re going to do? They’re going to argue that you were not hurt. You were not traumatized by the termination because you never talked to a doctor about it. You never spoke to a therapist.
Josh Van Kampen: 14:12 So please, if you know that that termination has been a traumatic event for you, and for most people it really is, please go talk to your primary care physician about how you’re feeling and if your primary thinks that it’s appropriate for you to talk to a therapist, go talk to a therapist. And what’s more, be a good patient. So if you start in therapy, stay in therapy. If your doctor prescribes you an antidepressant or an anti-anxiety medication, and obviously if it’s not working or you had a bad reaction, you should stop. But be a good patient and follow your doctor’s advice in taking your medication because the bean counters on the other side of a table at a mediation that are representing the company are going to be assigning a higher value to your pain and suffering and emotional distress if there’s a basis for it.
Josh Van Kampen: 15:08 Now another thing to consider though too is I’ll readily admit to the listeners, hey I’ve been to a counselor before. That doesn’t mean that just because I have a preexisting condition or I’ve seen a counselor before in my life doesn’t mean I can’t recover for pain and suffering and emotional distress as a result of the termination, because the judge and the jury are going to basically figure out what was from what. So let’s say that before you had a depression diagnosis and you were taking five milligrams of Welbutrin. You got fired, you went back to the doctor, and now your dosage has been upped to another 10 milligrams, for example.
Josh Van Kampen: 15:51 Well that’s an exacerbation in a preexisting depression condition and so we can go to a judge and jury and say, well see, it got worse. And so it’s appropriate for there to be some compensation for that worsening. Same thing goes for counseling. We don’t go through life in this world unscathed. And so it’s not uncommon for people to have counseling for different sorts of traumas that happened before. Don’t let that stop you because if your therapist or your doctor is able to carve that out and connect the dots to say that the termination has messed you up further then you can be compensated for that.
Robert Ingalls: 16:30 Now are there any pitfalls to watch out for that the employer may try to tactically deploy?
Josh Van Kampen: 16:36 Yeah. One trap is, understand you’re not able to recover emotional distress damages because you’re stressed out about you can’t pay your bills. So everybody that loses their job is stressed about making ends meet. The stress about making ends meet is not compensable. The employer’s not responsible for your stress about not paying bills. So if you’re in a deposition and the company attorney is asking you questions about your stress level or your anxiety, he or she’s probably going to try to lead you down this, oh, it was about… I understand the financial losses and that must have been very stressful, was that mostly what you were worried about? No. No, it was because you hurt my heart when you wrongfully terminated me.
Robert Ingalls: 17:29 Right. Trying to lead you to the swamp.
Josh Van Kampen: 17:32 It wasn’t because I was worried about my credit card bill. But they absolutely… That’s a really good way to put it, leading to the slaughter. And the other thing is the company attorney is going to try to get you to put more emphasis on the other traumas in your life so that he can say those were the main factors in why you had an increase in your dosage, versus the termination itself.
Robert Ingalls: 17:56 Now we started this out discussing how there were no caps on the last ones we talked about, but what is the cap on the pain and suffering and emotional distress?
Josh Van Kampen: 18:07 So does it make any sense to you that Congress would pass caps back in the 90s and then not update those caps?
Robert Ingalls: 18:18 That sounds about right to me.
Josh Van Kampen: 18:19 For inflation? So there are caps that are literally still in place since the Clinton administration, and so they’re really low. So for most employers, the cap under title seven of the Civil Rights Act, or the Americans with Disabilities Act is $300,000. But depending on how small the employer is, if it’s under 50 employees the cap is actually $50,000, for emotional distress or pain and suffering. Now, this is why you need a good lawyer.
Robert Ingalls: 18:51 I thought you were about to come with workarounds.
Josh Van Kampen: 18:52 Sure. There are workarounds to get out from under these stupid caps. In North Carolina, we almost always bring a companion claim to our federal claim. So you’ve got a federal cap on emotional distress, but if you see for wrongful discharge under North Carolina common law, you don’t have a cap on emotional distress damages. So we always have a counterpart wrongful termination claim under North Carolina law.
Robert Ingalls: 19:19 All right. So then tell us about liquidated punitive damages.
Josh Van Kampen: 19:23 These are basically damages where the purpose of it is to punish the employer for doing a bad thing and also deterring this employer or other employers from acting in a similar fashion. So when you’re valuing a claim, we usually don’t rely on or put a lot of money in these liquidated damages or punitive damages buckets because it’s a pretty high bar to be able to recover those. The legal term for doing so is, basically we have to show maliciousness or willful and wanton behavior. So that doesn’t tell our listeners anything.
Josh Van Kampen: 20:05 Let me translate that to say where it is so obvious that the employer doesn’t give a care about what employment obligations there are. They’re going to do whatever the hell they want and deal with the consequences later. That’s malicious. That’s reckless. And that sort of arrogance, brazenness is what you need. Most employers these days, although in the era of the Trump administration, we’re seeing more and more of this sort of cowboy behavior. But in general, it’s the exception to run into that sort of behavior but when you do, it’s actually really good for your case.
Josh Van Kampen: 20:42 So if it’s an age discrimination case, you can recover liquidated damages. Liquidated damages are double damages, so when you see liquidated, think double. And that is double whatever your back pay award would have been; very nice feature to the Age Discrimination Act. And then under the other federal employment laws, you can recover punitive damages on those… Remember we talked before about those crappy old caps? They’re actually in place and they pertain both to punitive damages and pain and suffering combined. So can you imagine, no matter how brazen the conduct or how traumatic the injury that there would be a cap of $300,000, for both?
Robert Ingalls: 21:29 That certainly works well for the employer.
Josh Van Kampen: 21:31 Right. Good thing you have a savvy lawyer who knows workarounds to get out from under those stupid old caps. But even under North Carolina, sorry to say there’s a cap on punitive damages but not as bad. So under North Carolina law you can get three times your lost wages, three times your pain and suffering. So if your pain and suffering and lost wages is a million bucks, well you can get 3 million bucks in punitive damages in North Carolina. So that’s nice.
Robert Ingalls: 22:05 All right. And that brings us to your favorite one, attorney’s fees and costs.
Josh Van Kampen: 22:09 Attorney’s fees and costs. Anytime we’re at a mediation, I’m sitting across the table from a business owner, the company lawyer, I say, “Understand that you’re paying for my time as I’m sitting here today being a pain in your ass, and you’re going to pay for every minute of my time, in all likelihood all the way through a trial, if we win. And sometimes judges will reduce attorney fee awards if you’re not very successful or let’s say I wasn’t efficient with my time or that sort of thing and there can be circumstances where it’s appropriate to reduce an attorney fee award. But for sure the general rule is that, where you’re suing for federal employment discrimination or wrongful termination, the company is going to be ordered to pay the attorney fee and cost.
Josh Van Kampen: 23:00 And we represent a lot of executives but we also represent a lot of factory workers too, or people in the service industry. And it’s not uncommon to have a case where maybe the lost wages, back pay and front pay was $200,000 but our attorney fee petition was $400,000. And so when we’re negotiating with a company, for example at a mediation, we’re pointing out, well look, you’re undervaluing the claim if all you’re thinking about is the lost wages and benefits, because the attorney fee award is going to be double that. So we’re always reminding employers about the fact that these are called fee shifting provisions, where the fees are shifted to the defendant if they lose.
Robert Ingalls: 23:44 All right, well before we go, tell me about the Van Kampen Law approach to negotiations. If I come in and I have a case like this, take me through what this is going to look like together.
Josh Van Kampen: 23:56 Well it could be a really short road or it could be a really long road, but our clients are always wanting this road to be as short as possible. And so our playbook is emphasized on exerting a maximum amount of pressure and intensity and aggressiveness as fast as possible, so that we can get the employer to buckle, basically. But it starts out with a polite knock. There are law firms in town that will write a mean nasty letter and threatening to file the lawsuit in seven days if this money isn’t paid, and a whole lot of bluster. Like I said before, fire and brimstone. That is not an effective way to get a case settled, initially.
Josh Van Kampen: 24:43 And so we arrive with a polite knock at the door in the form of a very short letter of representation. And where we’re going to be concentrating our efforts in getting a case settled is not in a letter writing campaign, but in that first contact with the company attorney or representative. So we view that first contact with that company attorney as almost as important as an opening statement in a jury trial. And so we’ll spend hours upon hours upon hours actually orchestrating our script of how we’re going to present our client’s case in that first call because that’s the smart thing to do. We’re going to work really hard, really fast, really early to try to get a case settled.
Josh Van Kampen: 25:30 But you have to remember too though, be prepared if that doesn’t work. And my personal batting average in cases, say coming out of a severance negotiation context, is about 600 or 60% success rate for an early settlement, I’d say. But after that, you’ve got to have a playbook of escalation points. And so I don’t want to give away all my secrets of escalation points, but what we’re trying to get employers in town to understand, and I think most of them do by now, is that the longer you fight us in negotiations, the more expensive it’s going to be. And employer, you’re going to get your best deal early than if you make our client wait and fight. And so that’s our approach.
Robert Ingalls: 26:18 Well, is there any last words?
Josh Van Kampen: 26:20 No, I just appreciate everybody who’s listening and I’m hoping that you’ve cracked up at least a few times in some of these podcasts.
Robert Ingalls: 26:28 All right, well thanks Josh.
Josh Van Kampen: 26:29 All right, thanks.
Speaker 1: 26:32 Congratulations for taking an important initial step in turning the tables at work but this podcast is just an educational resource. It does not constitute legal advice and is no substitute for consulting an employment attorney about your unique situation before making legal decisions. Visit our website for more online resources and videos at NCemploymentattorneys.com or better yet, call (704) 247-3245 for a free initial intake interview, so Van Kampen Law can evaluate your case. Until next time, keep your head up and your wits about you.