Damages for Wrongful Termination under Massachusetts Law

What can a person sue for in Massachusetts if they are unlawfully terminated from a job–due to employment discrimination or retaliation for certain protected conduct, like complaining about unpaid wages or overtime? This post will focus on money damages and not equitable remedies, such as reinstatement, which can sometimes be available. First, a simple list:

  • Front pay,
  • Back pay,
  • Emotional distress damages,
  • Punitive damages (in the case of discrimination),
  • Attorney’s fees and costs.

Front Pay:

Front pay damages represent lost future earnings and benefits caused by a wrongful termination.

As the SJC put in Haddad v. Wal-Mart Stores, Inc., 455 Mass. 91, 102 (2009), “front pay is intended to compensate a plaintiff for the loss of future earnings caused by the defendant’s discriminatory conduct; it is not a punitive award and should not generate a windfall for the plaintiff.” The purpose of front pay is to imagine a world in which the illegal termination did not take place and compare that world to what actually happened. If the employee is predicted to earn less after the wrongful termination than what they were earning before, and proof of causation exists, then a front pay award is permissible.

The Haddad court further explained:

The judge also correctly instructed the jury to consider and weigh five factors in determining the amount of any front pay award: (1) the amount of earnings, including salary and benefits, that the plaintiff would have received between the time of trial and the plaintiff’s projected retirement date; (2) the plaintiff’s probable retirement date; (3) the amount of earnings that the plaintiff would probably have received from another employer until her retirement, which would reduce any front pay award; (4) the availability of other employment opportunities; and (5) the possibility of future wage increases and inflation. See id. The judge further instructed that any award of front pay damages must be based on the present discounted value of the income stream, and he provided an explanation of how that value was to be calculated.

In Haddad, a front pay award of $733,307 was allowed.

Back pay:

This type of damage is like front pay in that it seeks to calculate the difference between what the employee earned after the unlawful termination and what they would have earned up to the date of judgment. Because a back pay determination looks into the past, much is known that is the subject of some speculation in the context of a front pay award. The plaintiff’s mitigation efforts can also be examined.

The so-called duty to mitigate allows an employer to sometimes reduce a back pay award by arguing that the plaintiff could have, but didn’t, get other work after being terminated that would have reduced his damages. The employer has the burden of proof on the issue of mitigation in Massachusetts. The SJC explained that burden like this:

An employer meets this burden of proof by proving the following: (a) one or more discoverable opportunities for comparable employment were available in a location as convenient as, or more convenient than, the place of former employment, (b) the improperly discharged employee unreasonably made no attempt to apply for any such job, and (c) it was reasonably likely that the former employee would obtain one of those comparable jobs.

Emotional Distress:

The Massachusetts Supreme Judicial Court articulated the standard for the allowance of an award for emotional distress in DeRoche v. MCAD, 447 Mass. 1, 7 (2006):

We emphasized that emotional distress, to be compensable, must be proved by substantial evidence of the emotional suffering that occurred, as well as substantial evidence of a causal connection between the complainant’s emotional distress and the respondent’s unlawful act. Factors to be considered include (1) the nature and character of the alleged harm; (2) the severity of the harm; (3) the length of time the complainant has suffered and reasonably expects to suffer; and (4) whether the complainant has attempted to mitigate the harm (e.g., by counseling or by taking medication).

Although it is not essential that one seek medical attention to recover damages for emotional harm, some credible testimony of the distress is always necessary. If possible, it is useful to have a family member or other testify about the physical and concrete manifestations of emotion distress, such as loss of sleep, appetite and related effects.

Punitive Damages:

Punitive damages are allowed in cases of employment discrimination and retaliation. These damages work differently in cases of age discrimination and cases of other types of discrimination. In cases not based on age, the standard is this (again from the Haddad court).

An award of punitive damages requires a heightened finding beyond mere liability and also beyond a knowing violation of the statute. Punitive damages may be awarded only where the defendant’s conduct is outrageous or egregious. Punitive damages are warranted where the conduct is so offensive that it justifies punishment and not merely compensation. In making an award of punitive damages, the fact finder should determine that the award is needed to deter such behavior toward the class of which plaintiff is a member, or that the defendant’s behavior is so egregious that it warrants public condemnation and punishment.

In determining whether the defendant’s conduct was so outrageous or egregious that punitive damages under G. L. c. 151B are warranted, the fact finder should consider all of the factors surrounding the wrongful conduct. Such factors may include:

  1. whether there was a conscious or purposeful effort to demean or diminish the class of which the plaintiff is a part (or the plaintiff because he or she is a member of the class);
  2. whether the defendant was aware that the discriminatory conduct would likely cause serious harm, or recklessly disregarded the likelihood that serious harm would arise;
  3. the actual harm to the plaintiff;
  4. the defendant’s conduct after learning that the initial conduct would likely cause harm;
  5. the duration of the wrongful conduct and any concealment of that conduct by the defendant.

Punitive damages are generally limited to single-digit multipliers of actual damages due the U.S. Supreme Court in State Farm v. Campbell.

In Haddad, a punitive damage award of $1 million was allowed.

In age discrimination cases, the law of punitive damages works very differently. The statute provides that as long as the discrimination was committed with knowledge, or reason to know, that it was a violation of the age discrimination law, the plaintiff shall recovers two or up to three times the actual damages. This is an easier standard to meet than in cases of other discrimination, yet with a lower cap on the potential punitive damage award.

Note that prejudgment interest is available on back pay and emotional distress awards. At 12 percent a year and the slow pace of justice, this can be considerable.