Classification and Valuation of Damages Under Title VII

The starting point for valuing liability in an employment case is to review the laws that define and limit the relief available. Title VII is one of the most challenging statutes, with added elements of damages that complicate the valuation process. It’s important to understand front pay and back pay, which are not subject to the statutory cap, and to properly characterize damages to avoid under-compensating or over-compensating employees. Front pay is awarded when it’s not possible to reinstate an employee to their previous job, often due to a hostile work environment or animosity created during litigation. When someone is discriminated against at work and can’t be rehired, they might get a “front pay” award to make up for the income they would have earned if they weren’t treated unfairly. This also applies if someone was passed over for a promotion. “Back pay” awards cover the money and benefits someone lost because of the discrimination until the time of the trial. If the person didn’t try to find a new job, the amount of the award might be lowered. Future benefits based on years of service can also be included in the award. When a worker sues their employer for discrimination and wins, they may be awarded front pay to make up for lost wages and benefits. However, even if they are reinstated by their employer, they may still face future economic damages because of the stigma of filing a lawsuit. This can make it harder for them to find a new job or move up in their career. Reinstatement doesn’t erase the harm caused by discrimination. When someone experiences discrimination at work, it can limit their future job opportunities and affect their reputation in their industry. Even if they find a new job, the discrimination could still impact their career down the line. They can also receive compensation for any expenses related to the discrimination, like medical bills or job search costs. When a replacement job costs extra money, those costs should be reduced to present value and included in this category. If the costs are a lot compared to the pay, the time for the costs should be limited to the average time Americans stay at a job. This is because workers will try to find higher paying work or reduce expenses. The extra time commuting is like having another job, and the “make whole” policy hasn’t been achieved if it takes more than one job to replace the lost one. This loss is measured as a shortfall of income included in future pay awards. It’s important to only measure this loss when the old job’s location can’t be duplicated with the new one. The CRA also provides remedies for non- money losses such as pain and suffering and punitive damages, but proving economic losses is easier. Finally, the front pay award shouldn’t be discounted if there’s an award of punitive damages. The length of front pay, or the amount of money an employee receives after a wrongful termination, is limited by various factors. These include the assumptions used to calculate the loss, which can be challenged as too speculative or conservative. It’s important for the valuator to consider court decisions on how each type of loss should be proven and calculated. The most important thing to figure out when valuing discrimination cases is how long the person would have continued working at their job if they hadn’t been discriminated against. There are different factors that can affect this, like the person’s intentions, education, work history, and age. If the person had a long history with the company or achieved a higher position than expected, they may be entitled to more compensation. If they had a history of changing jobs, that can also affect the amount of compensation. It’s important to look at the individual’s specific situation rather than just using industry averages. The length of time an employee can receive front pay after being wrongfully terminated depends on various factors. If the employee is close to retirement, they may be entitled to front pay until they retire. The size and performance of the company and the state of the industry also play a role in determining the length of front pay. Additionally, changes in retirement planning, such as employers shifting the responsibility for retirement savings to employees, can affect when an employee chooses to retire. If an employee is on probation, it should not automatically limit the front pay period, as they may have cleared probation in a fair workplace. Both the employer and the employee could be unhappy during the probationary period, so it’s not fair to use it as a reason to limit front pay. The actual work history of the employee should be the main factor in determining the length of front pay. The final thing to consider is whether the subject’s job required a contract to be renewed, and if so, how likely it would have been renewed. The only thing that matters here is what usually happens with other employees in similar situations. If the employer argues that the subject wouldn’t have been renewed because it wasn’t happy with their work, they might use that as a defense for firing them. If that happens, it could reduce the amount of money the subject gets. Whether this defense is valid or not depends on whether a jury finds that the firing was unfair.
Another thing to think about is how likely the subject is to keep their job in the future. This matters because the longer they keep their job, the more money they can get. It’s also important to remember that if we take into account the subject’s chances of survival for a future pay award, then we should also do the same thing when looking at how much money they lost in the past. The health status of an employee can affect how long they could have worked, but it should not be used to discount their front pay if their health worsened due to the discharge. The discount rate used to calculate front pay awards is important and should be based on the length of the front pay period. The economic value of a discrimination claim is determined based on the categories created by the 1991 Civil Rights Act, and each component of liability must fit into these categories before being valued. It’s important to address all factors when measuring this liability to help both parties in the litigation understand the issues and potentially settle the dispute without going to trial. These are references to court cases and articles about employment law. They talk about things like front pay, retirement dates, and expert testimony.

Source: https://www.floridabar.org/the-florida-bar-journal/classification-and-valuation-of-damages-under-title-vii/