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The Duty to "Mitigate" or Reduce and Document Damages in Employment Cases

The most basic component of damages in an employment discrimination lawsuit or wrongful dismissal1 lawsuit is lost earnings. Generally, damages for back pay are measured by what you would have earned from your former employer from the date of your wrongful dismissal until the date of trial, less any earnings you receive from part time or full time employment before trial.

You must look for work. You cannot sit back, let your damages build up and hope that you will recover the full amount of your lost salary at trial. If you do not look for work or are unavailable for work during a period of time, you may not be able to recover your lost salary for that period. This is a duty which the courts require of you.

During the course of the lawsuit, the attorney for your former employer will ask you specifically where you have looked for work, the positions you have sought, applied for, or inquired about, the name of each individual with whom you have spoken about that job, whether you were interviewed, and the results of that interview. The lawyer will ask whether you have prepared a resume to submit to potential employers and will probably be asked for a copy of your resume. You will be asked whether you have sought work from an employment agency. In short, you will be asked about every single action you have taken since your dismissal to find suitable, replacement employment.

We recommend our employment clients who are plaintiffs do the following:

1. Notebook: Purchase a three ring binder immediately and keep all information in the notebook, regarding your efforts to obtain employment. For example, you should clip all want ads that you pursue, indicating the date of publication, the name of the paper or the publication, and the page on which it appeared; a copy of your letter responding to the ad; a copy of any response and notes of all follow-up with regard to the ad (e.g., telephone calls, interview notes). Use employment websites such as Monster.com. Keep a list of every job you apply for, or express any interest in. You should keep a list of all companies and individuals you contact, by phone, letter or in person, the date you did so, and the position you sought. If you contact “headhunters” list that too. In all likelihood, you will not be interviewed for every job that you seek but be prepared for any interview you get. If you know the starting salary of a position and are interviewed for that job, keep a record of this as well. If you are searching for jobs online, copy and print those for which you applied.

2. Public Employment Services: Determine whether the Department of Labor or Unemployment Office has comparable jobs listed by prospective employers. If so, register with it and record these activities in your notebook in chronological order. Some churches, synagogues or religious organizations have job placement service as well.

3. Search Firms/Headhunters: Register with several private employment agencies (headhunters). Find one that specializes in your line of work. There is a directory of search firms by line of work/industry entitled "The Directory of Executive Recruiters" published by Kennedy & Kennedy, Inc. It can be found in any good public library. We can also refer you to a "Career Counselor" or “Career Coach” who can advise you on things like clarifying your goals, putting together a good resume, and practice interviewing.

4. Resume: Prepare a resume. Do not lie, puff or exagerate on that resume. Do not omit information. Do not inflate the description of your duties and responsibilities with your prior employers. Do not misrepresent your education. If you do, it will come back to haunt you in an employment lawsuit should your case go to Court, and will also cause what may be irreparable damage with the employer to whom you have been less than truthful. If you get a job based on a false resume and the new employer discovers you lied on your resume or application, you will be fired for lying further complicating your future work life. Omit things like gender, marital status, children and age.

There are professional resume services, which you may wish to use. Check your local telephone directory for one near you.

5. Employment Applications: Answer all of the questions on your employment applications honestly. Do not lie about your job duties or responsibilities at prior employers. Do not lie about reasons for termination. If the answer is embarrassing, you might answer: "To be discussed at job interview". Also, it is normally not wise to disparage your former employer.

6. Network: Network with friends and others for possible job vacancies. Record those efforts in detail in your notebook with the dates in chronological order. Many new jobs are found as a result of personal contacts or informational interviews.

7. Want Ads - General: Read the want ads every day. Clip those ads that describe jobs for which you are qualified. Call or write as the ad requires. Retain a copy of your letter. Place the ad, a copy of your letter, and your notes regarding any follow up in the notebook.

8. Want Ads - Special Days: Purchase the Sunday edition of the newspaper. Read the classified ads, and also the ads in the business section of the paper.

9. Specialized Want Ads: Many trade, business and professional magazines carry want ads. Buy the publications applicable to your profession or industry and check the ads.

10. Job Offers: Think carefully before you reject any job that is offered to you. You have a duty to accept comparable employment. The legal definition of comparable employment can be very technical, but basically it means similar job duties in a similar field with perhaps a somewhat similar salary. Generally you are not required to take a job out of your field or at a substantially lower salary.

11. Job Interviews: With regard to all job interviews, record in your notebook the date of the interview, the address of the company, the name and title of the person who interviewed you, the substance of the conversation, the title of the job for which you interviewed, its salary, and any other pertinent details.

12. Telephone Calls: Record in your notebook all telephone calls that you make regarding possible employment. Record the date, the person called, his/her job title, the company, the job you called about, its salary, and the substance of the conversation.

13. Job Fairs: Attend job fairs. Keep detailed records of all companies with whom you interview at job fairs, including the name of the recruiter and the date of the interview.

14. Other Organizations: There may be other organizations that assist people to find work whom you should contact.

15. Answering Machine: If you do not already have one, install an answering machine or service to ensure that you do not miss any calls from prospective employers.

16. School: Many client, consider going back to school to enhance their skills/recycle themselves into a new career , after being terminated. You should understand that the company will argue that, by going back to school, you have removed yourself from the employment marketplace and thus have failed to mitigate your damages. We advise that in any event you structure any schooling so that you can continue to seek full time employment and continue to be available for full time work. Do not cease your efforts to find comparable work. Do both concurrently (e.g., go to school at night, on weekends or online).

17. Self-Employment: Some clients, after being terminated, consider establishing their own business or going into business with others. You can do so, but we recommend that you continue the effort to find comparable employment unless you are absolutely convinced after a concerted effort to find a comparable job that you can not find a job and can be successful in your own business. Should you decide to start your own business please talk to us and we will be happy to provide you with any help that we can. For example, depending upon the business we can incorporate it or create an LLP or LLC if appropriate, We can also review any contracts or documents you intend to use in your business or sign in the case of becoming an independent contractor. Ironically it is not unusual that losing a job can be a blessing in disguise. Some people are much happier and successful as their own bosses.

18. Covenants Not to Compete and Trade Secrets: If you can’t find work due to a Covenant Not to Compete (a Non-Compete Agreement) you should keep a record of jobs for which you are qualified but can not apply for due to the Non-Compete Agreement

(A) If you work in the private (as opposed to government) sector at sometime during or at the beginning of your employment you may have signed a Non-Compete agreement or have been exposed to trade secrets. These may be enforceable even if you were fired or did not work at the company very long. While many states require employment related covenants not to compete be reasonable in length and scope, each state has different laws. For example, in Georgia they are not favored for employees and thus scrutinized carefully by the Courts. What is reasonable in one industry or with one employer may not be reasonable in another field of business. Even if the non-compete agreement specifies that another state’s laws applies, Georgia Courts will not always enforce them based on Georgia’s public policy. Generally, covenants not to compete are construed more liberally if associated with a professional practice such as physicians and even more liberally when part of the sale of a business in which you have more than a 5% interest. Violation of a non-compete agreement can also subject your new employer to a lawsuit and damages

(B) Trade Secrets are defined as :

"information, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers which is not commonly known by or available to the public and which information:
(A) Derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and
(B) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (O.C.G.A.§ 10-1-761)"

Unlike covenants not to compete, courts can and do enforce violations of trade secrets in some cases even if there is no written agreement. A person is liable for the misappropriation of a trade secret only if the owner of the secret can show that the person who misappropriated it (1) disclosed information that enabled a third party to learn the trade secret or (2) used a "substantial portion" of the trade secret to create an improvement or modification that is "substantially derived" from the trade secret. If the individual independently created the allegedly misappropriated item with only "slight" contribution from the owner of the trade secret, then the defendant should not be liable for misappropriation. Under certain circumstances there are even criminal penalties for theft of trade secrets.

19. Career Change: Many clients, after being terminated, consider making a career change. You can do so, but once again we recommend that, while attempting to do so, you continue to seek work in your old line of work.

20. Insurance: Generally, the courts want to see that you attempted to obtain replacement insurance for the coverage that you had at your prior employer. If you have made no sincere effort to obtain replacement insurance, the court may refuse to allow you to seek as part of your damages either the replacement cost or bills incurred which insurance would have covered.

Obviously, not everyone can obtain replacement insurance. But, you cannot assume that you cannot afford it. We urge you to get written estimates on the cost from insurance agents and if you are rejected for coverage due to a pre-existing condition note that. There are also short term (i.e. 90 days) policies as well.

If your former employer employed at least 20 employees and you were not fired for “cause” the employer has to offer to continue your group health insurance at the group rate for 18 months. Under certain circumstances you may be eligible for 30 months of continuation coverage. These are called your COBRA rights. You must pay the entire premium, both your part and the part that your employer may have paid on your behalf while you were working. It is permissible for the employer or insurance company to add a small processing fee of 1-2%.

If your spouse is employed, he/she may be able to add you to his/her policy. The duty to mitigate requires that you exercise this option unless you can demonstrate that your family could not afford the additional premium.

21. Life Insurance: Once again, the courts require that you attempt to obtain replacement insurance. At a minimum, you should get a written quotation of the cost so that you can establish that you made the effort and that you could not afford it. If you are uninsurable on your own save evidence of that as well.

22. Unemployment Compensation: We are unaware of any court decision that requires you, in accordance with your duty to mitigate, to apply for unemployment compensation. Indeed, most courts do not treat the receipt of unemployment as an offset to back pay. If you apply for unemployment compensation, your former employer may fight your application and the proceedings, i.e., hearings, may in some states have an impact upon subsequent litigation. Thus, the unemployment proceedings could be a crucial event and you should consult with counsel both before the claim is made and during the unemployment compensation proceedings.

Additionally, you should request a copy of your unemployment compensation file including a copy of the transcript or tape of any hearing you may have had from the Department of Labor. You must do this while your unemployment case is still open as it becomes very difficult to get it after the Department of Labor closes the case. Statements made by either you or your employer may provide important evidence or may help to narrow the issues in a subsequent proceeding.

23. Termination From a Subsequent Job: If you are terminated from a subsequent job, your former employer may argue that you were fired for cause and that you have voluntarily removed yourself from the marketplace. Thus, you need to be very cautious so that you do not create a "cause' for discharge from a subsequent employer. If you are fired, you should immediately consult with counsel and must begin again a good faith effort to find another job.

24. Medical and Psychological Damages; In a discrimination lawsuit, you are entitled to compensatory damages for the "pain and suffering" or "loss of enjoyment of life" that you have suffered as a result of the discriminatory conduct. As a practical matter however, both judges and juries have a difficult time imagining the non-physical damages that commonly occur as the result of discrimination or losing a job. Whereas the average person can imagine that it hurts to have a broken leg or that you may suffer embarrassment from having to use orthopedic appliances or having to let other people do things for you that you were used to doing for yourself, the pain of discrimination or an unjustified termination is less tangible. Therefore, if you are experiencing any difficulty in dealing with this type of pain we urge you to get help. While it is preferable that you see a psychiatrist, psychologist or licensed social worker, many internists and general practitioners are also available for short term counseling. Clergy can also be of assistance in this area.

While the cost of professional help may at first seem prohibitive when you are out of work, many counseling professionals have sliding fee scales. There are also county mental health programs and programs run by religious organizations which may be of assistance and not cost a lot of money. It is far easier to get an award of "pain and suffering" when there is tangible proof in the form of a medical or psychological report or a clergy witness that the pain was real and severe enough for you to seek help. Of course, bills for these services are compensable as damages and anticipated future counseling needs formulate the basis for another aspect of compensatory damages once liability is shown.

25. Post Termination Review of Employment History: Following the receipt of a charge of discrimination some companies will review your application, office or notebook computer, and any other information they can obtain about you. If they find that you lied on your application or committed any other act which, if they had known about would have resulted in your termination you may still prove discrimination however your damages will be curtailed or cut off completely.

If, after you get a new job you get fired, your damages will not pick up as if you had never been employed.

26. Bankruptcy; If you have filed for bankruptcy or intend to file bankruptcy, whether as a result of you termination or otherwise you must list a case for discharge or discrimination as an asset. Although the outcome of the employment matter may be unknown, it is a potential right to receive compensation. Be sure to let your bankruptcy attorney know about the employment matter and your employment attorney know if you have or will file bankruptcy.