Abstract
This chapter reviews the factors typically considered by forensic economists calculating economic damages in employment matters. While there is overlap with the analysis carried out in personal injury cases, employment matters involve some different considerations. The past loss period may differ from the time between employment termination and trial. The plaintiff’s loss of projected compensation is confined to earnings with the defendant employer. All post-termination compensation may not qualify as mitigation. The future loss period is not simply the remaining worklife, but may be shorter, if the plaintiff is assumed to re-attain eventually the earnings expected from the defendant employer. There may be adverse tax consequences of receiving a lump-sum verdict compared to the taxes that would have been owed if the earnings were taxed year-by-year.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Baum II, C. L. (2013). Employee tenure and economic losses in wrongful termination cases. Journal of Forensic Economics, 24(1), 41–66.
Baum II, C. L. (2015). Employee tenure and economic losses in wrongful termination cases: A reply to Nicholas Coleman. Journal of Forensic Economics, 26(1), 95–97.
Ben-Zion, B. (2000). Neutralizing the adverse tax consequences of a Lump-Sum Award in employment cases. Journal of Forensic Economics, 13(3), 233–244.
Bowles, T. J., & Chris Lewis, W. (1996). Taxation of damage awards: Current law and implications. Litigation Economics Digest, 2(1), 73–78.
Coleman, N. (2015). A comment on ‘Employee tenure and economic losses in wrongful termination cases’. Journal of Forensic Economics, 26(1), 85–93.
Couch, K. A. (1998). Late life job displacement. The Gerontologist, 38(1), 7–17.
Couch, K. A., & Placzek, D. W. (2010). Earnings losses of displaced workers revisited. American Economic Review, 100(1), 572–589.
Couch, K. A., Jolly, N. A., & Placzek, D. W. (2009). Earnings losses of older displaced workers: A detailed analysis with administrative data. Research on Aging, 31(1), 17–40.
Fleming, J. G. (1983). The collateral source rule and contract damages. California Law Review, 71, 56–86.
Gibbons, R., & Katz, L. F. (1991). Layoffs and lemons. Journal of Labor Economics, 9(4), 351–380.
Ireland, T. R. (2010). Tax consequences of lump sum awards in wrongful termination cases. Journal of Legal Economics, 17(1), 51–73.
Ireland, T. R. (2012). Possible damage elements in wrongful termination litigation: Back pay, front pay, and lost earning capacity. Journal of Legal Economics, 18(2), 93–105.
Kletzer, Lori G., & Robert W. Fairlie. (1999). The long-term costs of job displacement among young workers. Department of Economics, University of California Santa Cruz, July 1997, Revised January 1999. [Funded under contract no. 41USC252C3 from the U.S. Department of Labor].
Nicholson, Kristin A., & Charles M. North. (2004). Unemployment duration under wrongful discharge law. Baylor University, Working Paper #055, 1–32.
Ostrofe, N., Roney, T., & Kirwin, D. (2012). Factors to consider when estimating economic damages from a wrongful termination. The Earnings Analyst, 12, 63–88.
Rodgers, J. D. (2003). Handling taxes in employment law cases. Journal of Forensic Economics, 16(2), 225–256.
Roney, T. (2012). Estimating duration of economic damages in wrongful termination cases; recent literature on duration and magnitude of earnings losses from job loss. Journal of Legal Economics, 18(2), 107–127.
U.S. Department of Labor, Bureau of Labor Statistics. (2014). Economic news release 8/26/2014, Displaced workers technical note.
Cases
Alfredo Villacorta, Plaintiff and Respondent, v. Cemex Cement, Inc., Defendant and Appellant, 221 Cal. App. 4th 1425; 165 Cal. Rptr. 3d 441. (2013).
Commissioner of Internal Revenue Service v. Schleier, 515 U.S. 323, 132 L.Ed.2d 294, 115 S.Ct. 2159. (1995).
Dashnaw v. Pena, 304 U.S. App. D.C. 247; 12 F.3d 1112. (1994).
Hutchins v. DirecTV Customer Service, Inc., et al, 0:14-cv-35733, 9th Cir. (2014).
O’Neill v. Sears, Roebuck and Company, 108 F. Supp. 443, E.D. Pa. (2000).
Sears v. The Atchison, Topeka & Santa Fe Railway Company, 749 F.2d 1451, 10th Cir. (1984).
Williams v. Pharmacia, Inc., 137 F.3d 944, 7th Cir. (1998).
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Copyright information
© 2016 The Author(s)
About this chapter
Cite this chapter
Roney, T., Lanning, T. (2016). Issues in Employment Litigation Analysis. In: Tinari, F. (eds) Forensic Economics. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-56392-7_11
Download citation
DOI: https://doi.org/10.1057/978-1-137-56392-7_11
Published:
Publisher Name: Palgrave Macmillan, New York
Print ISBN: 978-1-137-57109-0
Online ISBN: 978-1-137-56392-7
eBook Packages: Economics and FinanceEconomics and Finance (R0)