If you are looking for the average settlement for wrongful termination then you are in the right place.
Losing your job can be an extremely painful event, devastating and disheartening, to say the least. The thought of that paycheck not arriving the next month can cause some individuals to feel lost and depressed, with no knowledge of how they will possibly move forward.
Fortunately, for every individual, there are some laws that protect them against wrongful termination or dismissal, and these laws are in most states around the globe.
What is wrongful termination?
Before we delve deeper into the settlements. we must first scrape the surface and get a slight understanding of what exactly wrongful dismissal is.
Most companies must eventually undergo the process of terminating an employee(s). While sometimes the reason for dismissal may be justified, for example, employee misconduct, etc.
There could be times when an employee dismissal is not justified, maybe the company is not generating enough revenue, and would have to lay off employees.
Despite some employees handling the dismissal and ‘moving on’, others can take the matter to legal terms, responding with immediate legal action against the company involved.
How exactly is wrongful termination defined?
‘Wrongful termination‘ is an act clearly defined according to the law. There are one out of two conditions, that indeed must be met for a ‘wrongful dismissal’ to be considered. The conditions are:
- An employer must have fired an employee in a manner that breaches the contract that was signed by the employee. For example, on the contract, it clearly states one cannot be terminated for arriving late to work, however, that individual is terminated for that same reason. This is considered a breach of contract.
- The second condition is one that involves a countries federal, or state employment laws. In some cases, these laws may vary between the states, though there are three main ways a dismissal may be considered ‘wrongful’ and they are as follows:
- The employee is a whistleblower. This simply means that a particular employee has exposed your company of illegal activities and business practices, sexual harassment etc.
- The employee is dismissed for exercising their legal workplace rights such as taking maternity leave, making use of their contracted medical leave days etc.
- Employee dismissal due to discrimination. This occurs whether it is gender, age, religion, or racial discrimination, any form of dismissal through discrimination is considered ‘wrongful termination’ in the eyes of the law.
When all the reasons mentioned above are combined together, this can result in large settlements costing the company involved large sums of money. Hundreds of thousands or even millions, depending on the cases presented, and the number of individuals involved.
Therefore, What is the average settlement amount for wrongful termination?
The most costly and time-consuming losses facing most corporations are employment claims and lawsuits. In fact, in the past 5 years, there have been 6 out of 10 employers facing employee lawsuits.
Employee lawsuits are expensive, and on average, an out of court settlement would cost a company approximately $40,000.
However, if the company decides to take the matter to court, then the compensation fee would be pushed up to approximately $45,000. Per employee.
In conclusion, all the laws made against wrongful dismissal were indeed established to help employees from such unlawful acts from corporations.
They were to protect employee rights when in a workplace, ultimately providing better job security for each individual in the working-class.
Over the years, this has helped employees feel more secure, with the knowledge they can act on such rights and laws if they felt they needed to.