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What Is the Average Settlement for Employment Lawsuits?

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According to the U.S. Equal Employment Opportunity Commission (EEOC), which is responsible for enforcing federal laws that make it illegal to discriminate or retaliate against job applicants and employees, there are thousands of cases of employment discrimination every year in the United States. From October 2022 to September 2023, the last federal fiscal year, the EEOC reports: “receiving 81,055 new discrimination charges, 233,704 inquiries in field offices, more than 522,000 calls from the public through the agency contact center, and over 86,000 emails,” concerning suspicions and claims of discrimination or retaliation at work.

In addition to discrimination or retaliation covered by the EEOC, employees can face a hostile work environment that constitutes a form of discrimination when the workplace is made intolerable. Likewise, employees sometimes face things like unsafe working conditions and wrongful termination under state law that are, unfortunately, not within the EEOC’s jurisdiction. When it comes to these violations, seeking the help of a qualified employment attorney is likely the quickest and most efficient path toward reaching an appropriate resolution for employees and employers alike. 

Do I Need an Employment Law Attorney?

A person might decide to hire an employment law attorney for many reasons. As much as one might wish that all work environments would be safe, fair, and welcoming for everyone, the fact is that violations in the workplace happen every day. Whether it be due to unfair hiring practices, gender pay gaps, sexual harassment, OSHA violations, or wrongful termination, there are myriad examples of illegal workplace practices that could lead to a lawsuit. As an employee, it can be daunting to understand what laws apply (if any laws apply), what evidence is needed, and how to gather it. Likewise, a lawsuit against an employer benefits from a lawyer's expertise. 

Knowing your rights and how to stand up for them may feel overwhelming. If you feel you’ve been discriminated against, have concerns about unsafe or unfair working conditions, and aren’t sure what next steps to take, it’s a good idea to consult an employment lawyer. 

Here are some common reasons someone might file an employment lawsuit claim: 

  • Breach of contract

  • Discrimination, based on:

  • Race

  • Gender

  • Age

  • Color

  • Disability

  • Equal Pay Act

  • National Origin

  • Religion

  • Retaliation

  • Owed wages, bonus pay, and commissions

  • Denials of accommodations for disability and religious needs

  • Sexual harassment

  • Whistleblowing

  • Wrongful termination

  • Unfair hiring, retention, and promotion practices

Employee Lawsuit Settlements: What to Expect

The majority of workplace lawsuits never go to trial. They are either settled out of court or dismissed on pretrial motion. You may also be asking yourself, “How much will an employment lawsuit cost?” This will depend on multiple factors, not the least of which is the type of payment structure you set up with your attorney. For starters, you should expect to spend money on your initial consultation, retainer fees, court costs, administrative fees, and disbursements. If you are planning to file a lawsuit against a current or former employer, you will need to go through several steps and stages – including the following:

Filing with the EEOC

For discrimination cases, you may want to file a charge directly with the U.S. Equal Employment Opportunity Commission (EEOC). If so, this must be done within 300 days of the alleged illegal wrong.  After the EEOC has closed its investigation of your charge, it will give you a Notice of Right to Sue, at which point you will have up to 90 days to file your lawsuit. Upon request, the EEOC can provide you with a list of local labor and employment law attorneys. 

Most U.S. States have an equivalent agency for the enforcement of anti-discrimination laws, and the time to file and procedures for filing differ from state to state.

Initial Consultation and Filing of Lawsuit

Whether your employment lawsuit is an issue of discrimination or some other concern, it will be wise to consult a qualified employment law attorney. This consultation may well inform you of rights you did not know you had or may assuage your concerns and indicate nothing further can be done – which all depends on the specifics of your case.

After the initial consultation, your attorney will discuss any next steps with you. This may include:

  • Filing a charge with the EEOC

  • Drafting a demand letter

  • Conducting an investigation

  • Interviewing witnesses 

  • Conducting a formal written analysis

  • Drafting a lawsuit

Regarding a lawsuit, a lawyer drafts a pleading or “complaint.” They will serve your complaint and any other necessary court documents to your employer. It will then be up to your employer to respond to the complaint. Typically, they are expected to do so within about 30 days.

At this point, your employer may try to file for dismissal of the case. Assuming the case is not successfully dismissed, a federal judge (if the filing is in federal court) will schedule a scheduling conference with lawyers from both sides. Together, the judge and lawyers will determine all of the important dates and deadlines related to your case. After this roadmap for your case has been laid out, your lawyer will provide you with a copy of the schedule, often known as your Case Management Order. 

Discovery

Discovery is one of the most important stages of a lawsuit. This is the time your lawyer will spend gathering all the pertinent facts about your case. They will do so mostly through written discovery and depositions. 

Written Discovery

Written discovery involves your lawyer requesting information from your employer, such as:

  • Personnel files 

  • Documents 

  • Emails

  • Company policies

  • Copies of written communication between you and your employer, or co-workers'

Your lawyer will also provide your employer with written questions related to your case that they will be required to answer in writing and verify under oath. 

Depositions

Depositions are oral testimonies from individuals whose knowledge of your circumstances may be pertinent to your case. You must also give your own deposition to your employer’s lawyers. 

Don’t forget that you may possess evidence. You should consult with your lawyer about what you may possess that could be considered evidence – often, this includes:

  • Witness names 

  • Important emails 

  • Documents

  • The employee handbook

  • Your employment contract

  • Your job offer letter

  • Personal notes about what happened

  • Text messages related to the alleged illegal wrong

There may be other evidence, specific to your case, not mentioned here. Be sure to speak to your attorney about this, as they may be able to use additional evidence to strengthen your case.

Settlement Mediation

It is estimated that about 90% or more of employment lawsuits are settled out of court before ever going to trial, and many of these cases are settled through mediation.

Settlements happen for many reasons – often because both sides of a lawsuit prefer to avoid airing their business in the public eye. Alternatively, they may simply prefer to have more certainty and say so in the outcome of a case. 

Whatever the reason for settling, mediation is a standard approach lawyers use when attempting to reach a settlement in disputes. Once a settlement has been reached, the case can officially be dismissed from the civil court system. 

Receiving Your Settlement Funds

After you have agreed upon a settlement, the settlement is usually reduced into writing that outlines the funds you will receive, the time when any check shall be issued, and other details, including the legal claims you are giving up, and other requirements applicable to each party to the lawsuit that settles.  These funds will often be distributed to your lawyer via check for delivery. Your lawyers will typically prepare their final statements and issue you a check for whatever amount is owed. 

Depending on the fee structure you have set up with your lawyers, you could receive the entire settlement amount, or your lawyers may first subtract any payment owed to them from the settlement funds. Sometimes, the settlement itself divides the payment to the employee and the payment to the employee’s attorney.

The amount of time it will take to receive your settlement check varies from case to case. While some settlement checks can take several months to arrive, others may be returned in just 30 days. 

Average Settlements for Employees

It is difficult to say what the average employment lawsuit settlement is, as there are so many different reasons a person might file a lawsuit, and each reason will come with its own averages. 

Settlement is also voluntary, and employers, as well as employees, can walk away at any time, causing average settlement amounts to vary significantly.  Furthermore, no one is guaranteed a successful case, and settlement inherently involves compromise. For example, the settlement range for wrongful termination may be anywhere from nothing at all to upwards of $1,000,000. 

One typical measure of damages alleged by an employee is lost income damages.To illustrate, a person may have been fired from being a police officer illegally, and now they make half their previous salary as a private security guard. These more tangible damages – such as lost income, denied commission pay, deprived pension, and damage to one’s career – often frame a higher level damages award with greater certainty.  

In cases involving emotional damages and compensatory damages, the extent of the damage often means a greater award of monetary damages to compensate the injured employee.  In sexual harassment cases, for instance, the severity of the harassment, including forms of battery or assault, may not be mathematically quantifiable but will result in a persuasive argument for higher-level damages.

Outlined below are some examples of recent employment lawsuit cases and their settlements: 

EEOC v Skils’kin: Racial Discrimination and Retaliation

According to the EEOC, the only black employee on the Skils’kin grounds crew working at Warren Air Force Base in Cheyenne, Wyoming, was repeatedly harassed and called racial slurs by multiple co-workers. When the employee complained, he was forced to continue working directly with the offending co-workers and was eventually fired. In the settlement of this lawsuit, the company agreed to pay $100,000 in damages.

IER v Amiga Informatics, Inc: Discrimination

In February of 2023, The Immigrant and Employee Rights Section of the Department of Justice (otherwise known as IER) won a settlement requiring Amiga to pay $24,864 in civil penalties, undergo training, and be subject to monitoring. After investigations determined that the company had posted multiple facially discriminatory job advertisements in 2021, they were awarded this settlement. Amiga’s job postings were found to have unlawfully excluded asylees, refugees, lawful permanent residents, U.S. citizens, and nationals. 

EEOC v McDonald’s Franchise: Sexual Harassment

A McDonald’s franchise owner headquartered in Kingman, Arizona, operating approximately 18 McDonald’s restaurants in Arizona, California, and Nevada, is set to pay almost $2 million in a sexual harassment lawsuit settlement. The lawsuit, filed by the EEOC, claimed that the defendant knew about occurrences of sexual harassment by supervisors, co-workers, and managers occurring at multiple locations since at least 2017 and allowed it to continue unchecked. As a result, many employees quit due to an inhospitable work environment. 

Employment Law Legal Resources

If you find yourself in a workplace situation that requires litigation, even with the help of an employment attorney, the path to justice may be long and stressful. You may be unsure of where to begin when it comes to filing your employment lawsuit. Depending on the nature of your grievance(s) and/or claim(s), you may also need help with things like filing for unemployment or finding a new job. Or, you may just want some quick answers to legal questions about your situation. No matter the need, help with all of these issues can be found online. 

Filing your Claim with the EEOC

The U.S. Equal Employment Opportunity Commission (EEOC) can be a valuable resource if you're facing employment law issues. Here, you can find detailed guidance on the process for filing a charge of employment discrimination, including important deadlines and necessary documentation. The site also provides educational materials and answers to frequently asked questions, helping you understand your rights and the steps in pursuing a claim.

Filing for Unemployment and Job Searching

If your situation leaves you needing to file for unemployment benefits, it’s important to note that the process can vary significantly depending on your state. While checking with your state’s unemployment office is essential, you can also gather preliminary information on the general procedures and requirements at the Department of Labor’s website

Additionally, a quick Google search can direct you to several trusted resources, including online job search engines, resume-building tools, and tips for interview preparation. Just remember that if you are looking for a new job, you may be legally bound not to discuss the details of your employment lawsuit.

Legal Aid

If you’re facing an employment-related legal issue, several organizations offer specialized legal aid services. The Legal Services Corporation (LSC) provides access to subsidized legal assistance across the country. Additionally, the National Employment Law Project (NELP) and the Equal Justice Center are dedicated to helping workers enforce their rights through legal advocacy and representation. These groups work to ensure that you have the necessary support to navigate employment disputes. 

Virtual Legal Advice Clinic

The American Bar Association Free Legal Answers platform serves as a virtual legal advice clinic, mirroring the traditional walk-in clinic model. Users can post specific civil legal questions on their state’s designated website, where volunteer lawyers provide brief advice and counsel. This service is particularly beneficial for those who need guidance on non-criminal legal matters but cannot afford long-term representation. 

For additional support, you can reach the ABA Service Center via their hotline at (800) 285-2221 or email Service@americanbar.org, available Monday through Friday from 9:00 AM - 6:00 PM ET.

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Gregg Mosson focuses on employment law for employees, select civil litigation matters, prosecuting or defending contempt of court, unemployment benefit hearings and appeals, protective order litigation, and disability benefits law before Social Security or concerning private insurance companies. Visit website: https://www.mossonlaw.com/