So your company’s been hit with a wrongful termination claim from a former employee. Ouch.
At least it sounds like an occasion to say “ouch.” But how bad is the situation, really? What are you actually on the hook for?
Here’s the short answer: attorney’s fees, in the best case scenario. In the worst case scenario? Attorney’s fees—yours and the plaintiff’s—plus a whole lot more.
That’s right. Win or lose, you can expect to see a hefty invoice from your lawyer. According to attorney Bennett L. Epstein, federal law tends not to give employers a free ride:
“The Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA) provide that a court may award the ‘prevailing party’ its attorney’s fees, but courts generally limit recovery against an employee to claims shown to be frivolous, unreasonable, or groundless. This is a very high standard. In other words, employers should not count on the court compelling an employee to pay the employer’s attorney’s fees.”
Back to our hypothetical: What happens if you lose? Well, in addition to both parties’ attorney’s fees, your company may be held liable for back pay, lost benefits, and even future compensation.
Oh, and did I mention damages? Under the Civil Rights Act, a court may order an employer found guilty of wrongful termination to pay for the employees’ pain and suffering, along with punitive damages, up to the following maximum amounts:
- $50,000 (for companies with 15–100 employees)
- $100,000 (for companies with 101–200 employees)
- $200,000 (for companies with 201–500 employees)
- $300,000 (for companies with more than 500 employees)
Yeah, any way you slice it, definitely an “ouch”—and the kind of financial booboo a “Band-Aid” approach to workforce compliance can’t heal.
Fortunately, implementing a workforce system that keeps your employees happy, manages terminations correctly, and minimizes your legal uncertainty costs only a fraction of what you might pay your attorney. Learn why it’s time to rip off the Band-Aid.
