Wrongful Termination: Will I Get a Settlement or Award?

If you’ve been fired because of illegal discrimination or harassment—or another reason that amounts to wrongful termination—you may be wondering whether it’s worth it to file a claim or sue your former employer. What are your chances of getting compensated for your financial losses? We surveyed our readers across the United States who recently had a wrongful termination claim, to see how their cases turned out. Here’s what we learned.

The Challenge of Wrongful Termination Claims

Overall, less than half of our readers (43%) received an out-of-court settlement or a court award in their wrongful termination case. This success rate, which is lower than we would expect for legitimate wrongful termination claims, might be explained in a couple of ways.

First, it’s worth pointing out that many employees have the misconception that a wrongful termination is any firing that’s unfair. To be wrongful under the law, however, the termination must be for an illegal reason—such as discrimination or harassment based on race, gender, or another characteristic that’s legally protected. Harassment because of personality conflicts or favoritism—while unfair—is not necessarily illegal. (For more details, see our articles on wrongful termination claims based on discrimination and on illegal or just unfair reasons for firing.) So, many of our readers who participated in the survey might not have had a legitimate wrongful termination claim, or they may not have had enough financial losses to warrant a settlement or award (for instance, if they found another job right away).

Secondly, our survey results showed that some other factors—beyond that threshold issue of whether the firing was illegal—made a real difference in the likelihood of receiving compensation.

The Biggest Advantage: Having a Lawyer

Our survey showed that hiring an attorney more than doubled the likelihood of a positive outcome in a wrongful termination claim: Nearly two-thirds of readers with legal representation received a settlement or award. In contrast, less than one-third of those who went ahead without an attorney ended up with any compensation.

There are solid reasons for these results. Employment lawyers screen wrongful termination cases and generally only accept those that stand a good chance of winning. And once they accept a case, attorneys can help you gather the right evidence, put an appropriate value on your damages, and negotiate with your former employer. They also know the administrative and other steps that you need to take in order to protect your rights. All of this adds up to better prospects of a good outcome with a lawyer on your side.

Other Strategies To Improve Likelihood of Settlement

We asked our readers about different strategic steps they (or, more likely, their attorneys) took in the course of pursuing their wrongful termination claims. Then we looked at the impact those actions had on the likelihood of receiving a settlement from their former employer. The results showed that some of those strategies significantly raised the probability of a settlement.

Sending a demand letter. One of the first formal steps that you or your lawyer may take in order to move along your wrongful termination claim is to send your former employer a letter that describes your legal claims and makes an initial demand for compensation. This way, you can see whether the employer is willing to negotiate and reach a deal before you have to file a lawsuit. Nearly two-thirds of our readers told us they never sent a demand letter before their case was resolved. If they didn’t have lawyers, they may not have known to take this step. For those who had legal representation, their attorneys might simply have negotiated with the former employer over the phone. But our survey showed that the readers who sent a demand letter were much more likely to resolve their cases successfully: Nearly 60% of them received a settlement, compared to 36% of those who didn’t send a letter.

Filing a lawsuit. About one in five of our readers took the next step of filing a lawsuit against their former employers. As a result, those readers were nearly twice as likely to receive a settlement as those who didn’t file (70% compared to 36%). Filing a lawsuit starts a process of “discovery”—taking depositions and making other formal requests to obtain evidence. This puts the employee in a stronger position to negotiate with the former employer. So even though it’s very rare for wrongful termination claims to go to trial, employers are much more likely to make a settlement offer if you file a lawsuit.

Participating in mediation. If your former employer hasn’t made a reasonable settlement offer, you can try to resolve the case through mediation. During this informal process, a neutral mediator will try to help you and your employer reach an agreement. Your lawyer—if you have one—will be there with you to advise you during the process. If you file an administrative claim and/or a lawsuit, you’ll probably participate in mediation at least once. But you could also set up mediation before you get that far, if your former employer agrees. More than a quarter of our readers participated in mediation or a settlement conference. As a result, most of those readers (59%) were able to get a settlement, compared to 38% of those who didn’t go to mediation.

Fight for Your Rights

Some of the steps we’ve discussed not only increase your chances of receiving a settlement in your wrongful termination claim, but they also have an impact on the amount of money you’re likely to receive. (See our article on how different factors affected readers’ monetary compensation in their wrongful termination claims.) The take-away lesson from our survey: If you’ve been fired illegally, you need to be willing to fight for your rights. For many readers, that meant finding an attorney who would help them by taking all of the important steps needed to follow through on a wrongful termination claim.

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