What Is a Harassment, Discrimination or Retaliation Case Worth?

Predictably, the answer is: it depends.  But there are some guidelines.  Broadly speaking, every harassment, discrimination, or retaliation case in New Jersey has three components of recovery: compensatory damages, punitive damages, and attorneys’ fees.  Compensatory damages are designed to pay a plaintiff for her loss.  This includes lost pay and emotional suffering.  Lost pay is fairly easy to calculate: take what you were earning in your old job, figure out how long you were unemployed, and then determine if you are earning more or less in your new job.  That’s called “back pay.”  The law also allows for “front pay” in certain situations; front pay is lost salary into the future after a jury enters a verdict.  Typically, a successful plaintiff is fortunate to get months to a few years of front pay.

Compensatory damages for emotional suffering are difficult to predict and have a wide range from jury verdicts.  For example, sexual harassment verdicts in New Jersey have awarded as little as $5,000 and as much as $750,000 for emotional distress.  The basic rule is that a plaintiff can recover more emotional distress damages if he or she has sought counselling or medical treatment for depression or anxiety.  Emotional distress awards usually do not exceed $250,000 and frequently are under $150,000.  Things get even more complicated because a judge is allowed to reduce any damage award he or she finds excessive and emotional suffering awards are usually an area where judges reduce large verdicts through a procedure called remittitur.

Punitive damages offer the kinds of awards that make headlines.  When people read about the $2 million verdict for the woman who spilled a cup of McDonald’s coffee on her lap or the man who got $4 million for a scratch on his BMW, they are reading about a large punitive damages award.  (Both of those verdicts were reversed on appeal as excessive — but those reversals did not make headlines!)  Unlike compensatory damages, punitive damages are not designed to compensate someone for her own loss.  Rather, punitive damages are meant to punish the defendant for its illegal conduct and to deter it from behaving that way in the future.  In the employment law context, it is estimated that juries award punitive damages in less than 5% of all cases.  That’s because punitive damages can be awarded only where a jury has found “clear and convincing evidence” that a defendant wronged the plaintiff maliciously or through reckless disregard for the plaintiff’s rights.  Like emotional distress awards, judges sometimes reduce large punitive damages awards from juries.

Finally, most of the employment laws in New Jersey mandate that a defendant must pay a plaintiff’s costs of litigation (attorneys’ fees, court reporters, filing fees, experts, and the like).  The reason for this is controversial but logical: policymakers view discrimination, harassment, and retaliation suits as advancing important public goals — such as civil rights or public safety — and lawmakers want to encourage experienced attorneys to take the cases of employment law plaintiffs, most of whom cannot afford to pay over $100,000 to litigate a case for two years.  This “levels the playing field” where wealthy corporate defendants can hire competent attorneys to litigate for years and those attorneys get paid each month whether they win or lose the case.  Defendants frequently consider the risks of having to pay attorneys’ fees when they weigh settling or trying a case.

Given all these factors, most employment law cases settle before trial.  The risks and costs of a jury trial for both sides usually make settlement the intelligent option.

Dated: April 20, 2010 – Castronovo & McKinney – Paul Castronovo