Employment damages analysis applied to wrongful termination litigation: methodology, deliverables, and case-specific considerations.
A wrongful termination analysis asks what the employee lost when the employment ended and how much of that loss has been or should be replaced by other work. The economist builds the but-for compensation path from the employment agreement, pay history, and the employer's pay and promotion practices, including the benefit and pension accruals that would have continued, and compares it with the replacement earnings actually received. Front pay is projected over the period the record supports for reaching comparable employment, pension and deferred compensation losses are calculated from the plan terms, equity losses from the award schedule, and the future components are discounted to present value.
Back pay, front pay, and lost benefits in discrimination, retaliation, wrongful termination, and wage-and-hour matters. The analysis reconstructs what the employee would have earned in the position, including raises, bonuses, and benefit accruals, measures actual interim earnings, and evaluates mitigation and the period over which front pay is reasonable. In wage-and-hour matters the same records drive an hours and pay reconstruction for the individual claim or the class.
The claim consists of back pay from the termination date to the date of analysis, front pay for the period needed to reach comparable employment, lost fringe benefits including retirement contributions, health coverage, and equity or bonus plans, and in some matters the loss of pension or deferred compensation that vesting would have delivered. The mitigation side of the ledger consists of actual replacement earnings and, where the employee is not working, the earnings a reasonable search would have produced. The drivers are the employment agreement, payroll and personnel records, benefit plan documents, tax returns, and the record of the job search and any replacement work.
We issue the final report and provide deposition and trial testimony, rebuttal of opposing damages opinions, and updated calculations as the trial date moves.
By applying the plan's benefit formula to the service and pay the employee would have accrued through the but-for retirement date and comparing it with the benefit actually vested, then valuing the difference over the employee's expected retirement period. Plan documents and benefit statements are required.
The report can present either or both measures. The employer's contribution reflects what the package was worth; the employee's cost to replace coverage reflects what the loss costs the household. The economist states which is used and why.
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