When giving a consult to our would-be clients this is always one of the first questions that seem to come up. How much is my Employment case worth? How much do you think this case will get settled for? Well, it is not a number that is pulled out of thin air. In employment cases, you can reasonably determine what the value of your case is with a little bit of math.
Lawyers are often hesitant to put a value on any case unless they have every piece of information available because the absence of one piece of critical information; specifically, the other side of the story and their evidence to support it, can change the entire formula. That "slam dunk" case is extremely rare, and even if it exists, an employer will not likely admit to it and will require you to prove your case anyways. This article is intended just to give insight into the valuation process but is not legal advice as each case is different and there are many variables that can change the valuation of any case.
So How Much is My Case Worth?
You may be surprised to find out that your case is likely not worth the millions you assumed it is. In California, "At-Will" employment is the default form of employment which means you and your employer can terminate the employment relationship at any time, and for any reason - with limited exceptions. If you were terminated for a lawful reason, or you voluntarily resigned, you may be limited to your wage and hour claims.
The Wage and Hour Case
If you wish to bring a suit against your employer for unpaid wages, missed meal and rest periods and the derivative claims, you likely can calculate the value of your case on your own. Determine first, whether there is an employment relationship or are you an independent contractor. Even if classified as an independent contractor, you could find that you were always an employee, but misclassified by the employer.
Next, are you an exempt or non-exempt employee? Typically, this means are you a salaried employee or not? (Even if you are salaried you could still be entitled to meal and rest periods and even overtime under specific circumstances). Although it gets a little more complicated than this, it is typically whether you are an hourly employee or not.
If you are a non-exempt employee, what is your hourly rate? For today, let's say it is $20. To keep on this theme of simplicity, let's say you work overtime at $30. (The "Regular Rate of Pay" can modify your overtime premium to be greater than 1.5x your base rate. Read Here for more).
If you are alleging that the employer failed to pay you for up to ten hours a month, over the last 24 months, you are entitled to all 240 hours of unpaid work. Assuming it is all base rate, meaning it wouldn't have been calculated as overtime, we are looking at a $4,800, starting case value.
For every missed meal and rest period, you are entitled to one hour of your regular rate of pay. For example, the restaurant and nursing industries are notorious for having employees regularly miss their meal and rest periods. If they missed those every day, for 200 workdays, that is another 400 hours of unpaid wages you are entitled to, or another $8,000. In total, we are looking at $12,800 value to the case.
In reality, your wage and hour claims are as valuable as the job was. By that same example, but you were paid $60 an hour, we are now looking at a $38,400 case. You can redo the calculation to account for unpaid overtime as well.
Of course, a skilled attorney will understand that there are wage statement penalties, late wages, possibly unpaid or late wages, rounding errors and other timekeeping deficiencies and all of this will modify the value of the case.
The Wrongful Termination
So, you were paid correctly, but you were terminated for reasons that are against your contract, or against public policy. This changes things. If your contract was for a fixed term, let's say two years for $120,000 per year but you were terminated for reasons that are against the terms of your contract right at the beginning of the second year, you could be entitled to $120,000 in lost wages for that second year.
Of course, you have a duty to mitigate your damages which is legal jargon for don't just sit around - find another job. If you were to find a similar job for that full second year but it only paid $80,000, you would be entitled to $40,000.
Think we are starting to get it? Those word math problems ended up with some practical value, and the difference between a good attorney and a bad one is understanding all of the variables in the formula.
Most employment cases are not going to have the massive value you have read about on the news with million-dollar verdicts.
But it is not impossible.
Cases that involve a termination, forced resignation or a hostile work environment that involves discrimination and harassment, particularly those that the State is more sensitive to such as sexual harassment, race or disability discrimination could get what are called punitive damages.
Punitive damages are exactly as they sound, damages that are designed to punish the employer for egregious conduct. Again, this number is not made up out of thin air, it is typically a multiplier of the real damages.
For example, you were terminated specifically because you received an injury that required you to get surgery that would have you out of the office the next six weeks. The employer doesn't want to deal with an injured employee or wait for you to get back, so they terminate. This would be blatant disability discrimination and could result in punitive damages. Let's say you were making $80,000 per year and it took 9 months to find comparable employment; your case was initially worth approximately $60,000 without any additional facts. Because there may be punitive damages, penalties and attorney's fees and costs, you could be looking at more.
Finally, the Almighty Threat of Attorney's Fees
Most employment cases have attorney's fees and costs written into the California Labor Code and California Government Code under the Fair Employment and Housing Act. This means if you prove your claim in Court, the employer could be required to pay your attorney's fees. This threat of forced attorney's fees add value to your case assuming your claims are legitimate and can be proven with documented evidence. A case that is worth $6,000 but shows clear cut liability on behalf of the employer, the attorney will likely add reasonable attorney's fees to the value of the case.
What Your Lawyer is Looking For.
Each case is different because every employment relationship is different. We are looking first and foremost for your actual losses, including past and future wages. No penalties, no punitive damage, no guessing. What are you actually losing due to this circumstance? Next what is the strength of the evidence you have? What is the likelihood of getting the evidence? Is it your word versus theirs? Is it written in text and email? Is there clear wrongdoing on behalf of the employer? Lawyers will ask you what evidence and witnesses does the employer have, and what do we have? Finally, what is the estimated cost of this lawsuit, including attorney's fees and other costs?
If your lawyer determines that these questions have been answered satisfactorily, it is possible they can develop a reasonable valuation of the case.
The Value of Settlement
Money today is worth more than money tomorrow (or two and half years from now). The goal of most lawyers is to get you a settlement as quickly as possible to help you recover in your time of need. To take your case to the courts and all the way to trial can be a very lengthy process without much additional award. Settlement and even verdicts cannot be guessed at the beginning of the case and always require a detailed analysis of all available evidence and arguments from both sides. The hidden factor, the value of being done with a matter sooner rather than later, is impossible to calculate in the beginning stages because you cannot guess how the employer views your claim (or you personally).
This article is intended to give a very basic overview of how to value a case, but there can be significant derivative claims from your wage and hour, or wrongful termination claims that results in additional penalties and found unpaid wages that you were not even aware of. There may also be significant evidence that goes against your claims. It is imperative that you speak to an experienced employment attorney to determine the real value of your case and your best steps moving forward.