When an employee claims to be the victim of workplace discrimination, they may seek economic, non-economic, and punitive damages to compensate them for the financial losses and emotional distress they claim to have suffered due to discrimination. Calculating these damages can often be a complex and challenging task. When such cases enter litigation, both parties often require the services of an expert forensic economist to determine a just settlement value and possibly testify at trial.
Since 1979, The Knowles Group has provided unbiased economic damage calculations and expert witness testimony for the legal community throughout North America. If you or a client are involved in an employment discrimination case, contact us today to discuss your case and learn how our services may assist you.
What is Employment Discrimination?
Employment discrimination is the unfair treatment of a person or group in the workplace. Discrimination can occur at any stage of the employment relationship, including the hiring process, promotional opportunities, job assignments, compensation negotiations, and termination decisions. Likewise, discriminatory practices can take many forms, including
- Race discrimination: Unjust treatment based on the employee’s race or ethnicity.
- Age discrimination: Unjust treatment based on the employee’s age.
- Gender discrimination: Unjust treatment based on the employee’s gender or because they do not conform to traditional gender roles.
- Sexual orientation discrimination: Unjust treatment based on the employee’s sexual orientation.
- Religious discrimination: Unjust treatment based on the employee’s religious practices.
- Disability discrimination: Unjust treatment of an employee due to a physical or mental disability.
- Pregnancy discrimination: Unjust treatment of an employee because they are pregnant.
- National origin discrimination: Unjust treatment based on the employee’s country of origin.
- Genetic discrimination: Unjust treatment based on the employee’s genetic makeup.
- Retaliation: Unjust treatment of an employee because they filed a complaint or participated in an investigation.
- Vaccine discrimination: If an employer terminates an employee solely because they refuse to receive a COVID-19 vaccine without considering legitimate medical or religious exemptions.
What is the Average Employment Discrimination Case Worth?
It is difficult to determine the average settlement value of all discrimination lawsuits, as there is such a wide range, and many cases are settled privately through the EEOC. Some may result in relatively small amounts (hundreds or thousands of dollars), while others may result in substantial awards (hundreds of millions of dollars). Still, others may not result in settlement of any form.
The amount of damages an employee could be awarded in a discrimination case will depend on the specific facts of the case and the type of damages the employee seeks.
Is There A Formula For Calculating Discrimination Damages?
Once again, there is no set formula for calculating damages in a discrimination case. When completing discrimination damage calculations, expert forensics must consider several factors to arrive at an accurate settlement value, including age, job type, education, expected career length, loss of earning capacity, and punitive or compensatory damages. A highly simplified formula would be as follows
Economic Damages = Back Pay + Front Pay + Medical Expenses + Legal Expenses
Non-Economic Damages = Compensatory and Punitive Damages
Total Settlement Value = Economic Damages + Compensatory and Punitive Damages
Hypothetical Example
Anna is a 45-year-old saleswoman working in a management position within a large organization. She has been with the company for 20 years and has an excellent performance record. One day, Anna’s boss tells her she is being demoted to a lower-paying position because the company wants to bring in a “more energetic” person to take over her role. Anna believes she is being demoted because of her age and has filed discrimination charges with the Equal Employment Opportunity Commission (EEOC).
After investigating the case, the EEOC determined that Anna was indeed demoted because of her age, violating the Age Discrimination in Employment Act (ADEA). The EEOC tries to resolve the dispute through conciliation, but the company refuses to settle. The EEOC then files a lawsuit on Anna’s behalf. After a trial, the court ruled in Anna’s favor and awarded her $100,000 in damages for lost wages and emotional distress.
Factors to Consider When Calculating a Discrimination Lawsuit Settlement
Several types of damages may be available in a discrimination case. It is important to note that not all types of damages may be available in every discrimination case (ex. punitive damages). These damages categories include
- Front Pay
- Back Pay
- Compensatory and Punitive Damages
- Attorneys Fees
- Reinstatement
Front Pay
Front pay damages compensate the employee for any future lost wages they may suffer due to the discrimination. The amount of front pay awarded will depend on the employee’s expected future earnings, the expected loss period and plaintiff’s duty to mitigate damages with the employment search process.
Example
In Anna’s case, she was awarded $25,000 in front pay due to lost future wages.
Back Pay
Back pay damages compensate the employee for any wage loss due to the discrimination. The back pay awarded will depend on the difference between the employee’s current wages and the wages they would have earned but for the discrimination.
Example
Anna was awarded $50,000 in back pay for the lost wages due to her lower salary while being demoted.
Compensatory Damages
Compensatory damages compensate the employee for damages such as pain and suffering, emotional distress or emotional harm, harm to reputation, medical bills, job search costs, and other out-of-pocket expenses.
Example
Anna was awarded $25,000 in compensatory damages due to the emotional distress and emotional harm she experienced due to the demotion.
Punitive Damages Punitive damages
Punitive damages punish the employer for particularly egregious discriminatory or retaliatory conduct and to deter similar behavior in the future. For punitive damages to be awarded, an officer, director, or “managing agent” of the company must have done the egregious act.
Example
In Anna’s case, no punitive damages were awarded as the jury did not find her employer’s actions particularly egregious.
Attorneys Fees
If the employee wins the case, they may also be entitled to have their attorneys fees covered by the defendant to reimburse reasonable lawyer’s fees, filing fees, and court fees. However, the employer cannot win legal expenses against the employee.
Example
In Anna’s case, no damages for legal expenses were awarded because the EEOC filed the lawsuit on her behalf.
Reinstatement
Additionally, the court may offer an employee who wins their case the opportunity to be reinstated to their former position or a position with equivalent pay and benefits.
Example
In Anna’s case, the court also orders the company to reinstate Anna to her former position as sales manager. However, she chose not to resume her former role and sought employment elsewhere due to the emotional distress she experienced.
What Role Does the EEOC Play in an Employment Discrimination Case?
The Equal Employment Opportunity Commission (EEOC) is the federal agency responsible for enforcing employment discrimination laws throughout the United States. When an employee files charges against their employer, the EEOC first completes a formal investigation of the charges. If the charges are substantiated, the EEOC will then mediate disputes between employer and employee to seek resolution through voluntary means.
If the EEOC cannot resolve a complaint through its conciliation efforts, it may file a lawsuit on behalf of the employee or take other legal action. Alternatively, if the EEOC chooses not to file suit, it will grant the employee permission to do so independently within 90 days of receiving official notice.
Important Laws Influencing Employment Discrimination Cases
Several major federal laws protect employees against discrimination in the workplace, enforced by the EEOC. These laws apply to employers with 15 or more employees, including state and local governments, employment agencies, and labor organizations, including
Title VII of the Civil Rights Act of 1964
Title VII of the Civil Rights Act of 1964 prohibits employers from discriminating against employees based on race, color, religion, sex, or national origin.
The Americans with Disabilities Act (ADA)
The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities. Under the ADA, an employer must provide reasonable accommodations to employees with disabilities unless doing so would cause undue hardship to the employer.
The Equal Pay Act of 1963
The Equal Pay Act of 1963 requires employers to pay equal wages to men and women who perform substantially the same work. Equal pay does not necessarily mean that men and women must be paid the same wages for all jobs. Instead, it means that men and women must be paid equally for substantially equal jobs.
The Age Discrimination in Employment Act (ADEA)
The Age Discrimination in Employment Act (ADEA) prohibits employers from discriminating against employees and applicants 40 years of age and older.
Title II of the Genetic Information Nondiscrimination Act (GINA)
Title II of the Genetic Information Nondiscrimination Act (GINA) prohibits employers from discriminating against employees or applicants because of their genetic information.
The Pregnancy Discrimination Act
The Pregnancy Discrimination Act prohibits employers from discriminating against employees or applicants because of pregnancy, childbirth, or related conditions.
We Provide Expert Damage Calculations and Witness Testimony for Employment Discrimination Claims
As a leading litigation economics consulting firm, The Knowles Group specializes in quantifying and illustrating economic damages in state and federal courts across the United States and Canada. We work on behalf of plaintiffs and defendants in various cases, including employment discrimination claims.
If you or a client are involved in litigation requiring expert forensic services, please give us a call or visit our website to learn more about our services and schedule a complimentary case review.
