Available Damages for Employment Law Claims
In employment litigation, under most federal statutes and the Colorado Anti-Discrimination Act (CADA), successful employees are awarded their economic damages and reasonable attorney fees. In all discrimination and retaliation claims other than age and Family and Medical Leave Act (FMLA) claims, employees can also receive:
- Emotional distress damages, sometimes called “compensatory” damages
- Punitive damages, provided the employer employs at least 50 employees.
The emotional distress and punitive damages are capped, with the caps increasing based on the number of employees in a company until the $300,000 maximum for both categories is reached when a company has at least 500 employees.
All damages awarded in employment cases are normally fully taxable to the employee, although there is a deduction available for the payment of attorney fees and costs.
Economic Damages for Employment Claims
Economic damages can include “front pay” if reinstatement is not appropriate. Where it is reasonable to assume that an employee can never completely mitigate his damages, front pay can continue until a projected retirement date.
Lost benefits are also an important component of economic damages, and normally the employee is entitled to interest and, in some courts, a payment to compensate for the tax impact of receiving the lost income in a single tax year.
Economic damages are normally calculated by an expert economist who calculates back pay (lost wages) and subtracts mitigation earnings:
- Front pay is calculated by projecting forward future wages and future mitigation earnings.
- Statutory interest is added to back pay, and front pay is discounted to “present value” to reflect the decreased value, based on receiving funds at an earlier date.
Damages for Age Discrimination, FMLA & Race Discrimination Claims
With respect to age discrimination and FMLA claims, employees cannot recover emotional distress or punitive damages, but they can recover double economic damages (called “liquidated damages”) if the discrimination is “willful.”
One of the few instances where employees can theoretically recover unlimited emotional distress and punitive damages is in race discrimination claims brought under 42 U.S.C. § 1981. A few state employment discrimination statutes (not Colorado) permit unlimited emotional distress and punitive damages awards.