Retaining an economist in an employment discrimination matter involves a records request that reaches the employer as well as the employee, because the but-for compensation path is built from the employer's pay practices, raise schedules, bonus patterns, and benefit accruals, often illustrated by comparators. The scope should state the claims and damages periods at issue, whether front pay is claimed, and how mitigation will be documented, and it should set the report deadline against the discovery schedule so the employer's compensation records are in hand before the analysis begins.
Checklist
Run the conflict check on the employee, the employer, and counsel
State the claims, the damages periods, and whether back pay, front pay, and benefits are all in scope
Request the employee's pay history and the employer's compensation policies and comparator data through discovery
Document the job search and replacement earnings to date
Obtain the benefit plan documents for retirement, health, and equity awards
Questions to ask the economist
How do you use comparator pay data to build the but-for path?
How do you treat a period of unemployment followed by lower-paid replacement work?
How do you value lost equity awards and the vesting the employee would have reached?
Will you update the back pay figure to the trial date?
Timeline
About one week for retention and the records request, then two to four weeks of analysis after the pay and policy records arrive, then one to two weeks for the draft and final report, with an update to the trial date if needed.
Required documents
W-2s, pay stubs, and bonus or commission statements for the years before and after the adverse action
Employer compensation policies, raise schedules, and comparator pay data
Benefit plan documents for retirement, health, and equity awards
Records of the job search and replacement employment
Common pitfalls
Retaining the economist before the employer's compensation records are produced, so the but-for path rests on the employee's recollection
Leaving mitigation undocumented, which lets the opposing economist assume replacement earnings the employee never had
Omitting equity and bonus components that the employee would have received on the but-for path
What employer records matter most to the economist?
The compensation policies and the pay histories of similarly situated employees, because they show the raises, promotions, bonuses, and benefit accruals the employee would have received. Without them the but-for path defaults to the last pay rate, which understates the loss for an employee whose compensation was rising.
How long does a back pay and front pay report take?
A preliminary back pay figure can follow soon after the employee's pay records arrive. The full report waits for the employer's compensation policies and comparator data through discovery, then takes several weeks for the year-by-year comparison, the benefit valuation, and the sensitivity tables. The report is usually updated to the trial date, which the engagement letter should anticipate.
What should the engagement letter say about mitigation?
That the employee will keep a contemporaneous job search log and provide replacement pay records as they arise, and that the economist will credit replacement earnings actually received and show alternatives for any period the opposing side may contest. A documented search lets the report present mitigation from the record rather than from assumptions.
References
U.S. Bureau of Labor Statistics. (n.d.). Current Population Survey (CPS). U.S. Department of Labor. bls.gov
U.S. Bureau of Labor Statistics. (n.d.). Employment Cost Index (ECI). U.S. Department of Labor. bls.gov