Wrongful Termination: How Much Compensation Can I Expect, and What Will a Lawyer Cost?
If you believe you were fired for an illegal reason, you’re probably wondering whether it’s worth it to file a claim or lawsuit for wrongful termination. No doubt, you have a lot of other questions as well. What are your chances of getting compensated for your losses (or “damages”)? Can you tilt the odds in your favor? Do you need a lawyer? How much would that cost? To get some real-world answers to those and other questions, we recently surveyed readers around the U.S. who had claims for wrongful termination. Here’s what they told us about their experiences.
Compensation in Wrongful Termination Claims
Readers whose wrongful termination claims resulted in an out-of-court settlement or a court award after a trial typically received an amount that ranged from $5,000 or less to $80,000 (though a few ended up with much more than that). But more than half of our readers (57%) who thought they were fired illegally never received any kind of compensation. Two points might help explain these results:
Many employees believe that wrongful termination is the same as being fired unfairly. That’s not necessarily true. In order to have a legitimate claim for wrongful termination, you must have been fired for an illegal reason, including discrimination or harassment based on a protected characteristic (like ethnicity, national origin, religion, gender, pregnancy, disability, or age over 40). Many of our readers described reasons for their termination that aren’t illegal, such as favoritism, run-of-the-mill bullying (not based on a protected characteristic), personality conflicts, general unfairness, or posting something on social media that the boss didn’t like. In those cases, wrongful termination claims probably wouldn’t get far.
Those who participated in our survey had shared their information with us after coming to our websites to look for a lawyer and find out more about wrongful termination. Employees with the strongest cases and the highest wage losses or other damages (which can lead to higher settlements or awards) may not have taken part in the survey because they were able to quickly find and hire an attorney elsewhere.
Our survey showed that several other factors made a big difference in readers’ chances of receiving a settlement or award, as well as the amount of compensation (more on that below).
How Lawyers Affect Outcomes in Wrongful Termination Claims
Having the help of an attorney more than doubled our readers’ chances of getting a successful outcome in their wrongful termination claims. Nearly two-thirds (64%) of readers who hired lawyers received a settlement or award, compared to less than one-third (30%) of those who pursued claims on their own.
Attorneys also made a difference in the amount readers received. The average settlement or award for readers with lawyers was $48,800, compared to $19,200 for unrepresented readers.
Both of these survey results make sense when you consider how wrongful termination attorneys work. Once they agree to represent you, they can help you put together strong evidence. They know all of the legal and administrative hoops you have to go through, and they’re skilled at negotiating with employers. Also, when an attorney is involved, employers are more likely to take your claim seriously and make a higher settlement offer.
How Much Do Wrongful Termination Attorneys Charge?
Of course, attorneys don’t come free. Wrongful termination lawyers charge for their services in one of three different ways:
Contingency fees. Under this arrangement, the attorney receives a percentage of settlement or award. If you don’t get any compensation, neither does your lawyer. Three-quarters of our readers with attorneys paid them a contingency fee, and most of those readers (56%) paid between 30% and 35%. The overall average was just under 30%.
Hourly fees. Employment lawyers may charge by the hour, at rates that vary widely depending on the attorney’s experience and location. This arrangement is much less common, since most fired employees can’t afford it. Only 10% of our readers with lawyers paid on an hourly basis. Over a third (35%) of them paid between $100 and $200 per hour, while nearly a third (30%) paid over $300 an hour.
Combination fees. Your lawyer might ask you to pay a modest retainer fee at the start, with an agreement that you’ll also pay a percentage of any settlement or award. About 15% of our readers with lawyers paid through this arrangement.
Based on the average compensation received by readers who had attorneys, as well as the average contingency fee they paid (29%), their lawyers typically received about $14,200. But even when you subtract that fee from the settlement or award, those readers still ended up with nearly $15,500 more, on average, than those who didn’t have attorneys.
Other Factors That Affect Outcomes
While lawyers had the biggest impact on both the amount of compensation and the likelihood of getting anything, our survey pointed to several other factors that affected the outcomes of readers’ wrongful termination claims, including:
Negotiating settlement offers. It’s not a surprise that when readers negotiated for a better deal after receiving a settlement offer, the strategy usually paid off. What may be surprising is that one in five readers simply accepted the first offer. As a result, they received less than half as much in compensation, on average, as those who negotiated ($19,200 compared to $41,500).
Filing a lawsuit. Few wrongful termination claims actually go to trial, but filing a lawsuit puts an employee in a stronger negotiating position by starting the formal discovery process (getting evidence through depositions and requests for documents). Readers who took this step were nearly twice as likely to receive a settlement as those who didn’t (70% compared to 36%). They also received higher settlements and awards (nearly $12,000 more, on average) than readers who didn’t file.
Employer size. In general, readers who had a wrongful termination claim against a large employer (with more than 100 employees) received an average of $43,400 in compensation—almost twice as high as the average for readers who’d worked for smaller employers. Large employers may simply have the money to offer higher settlements. But these results may also be related to the legal limits on how much employees can receive for wrongful termination claims based on illegal discrimination or harassment. Those limits are higher for larger employers.
Weighing the Probabilities
As our survey results showed, it isn’t easy to get what you believe would be fair compensation for being fired illegally. But some things can make a big difference—especially hiring a good employment attorney. In fact, readers who had lawyers were more than three times as likely to be satisfied with how their cases turned out, compared to unrepresented readers.
But what if you’re having trouble finding an attorney to take your case? More than half of our readers (62%) didn’t hire a lawyer. Among those who tried to hire a lawyer, the most common explanations they gave were that attorneys had turned them down because:
the reason for the termination wasn’t illegal
there wasn’t enough evidence to support their claims, and/or
they didn’t have enough lost wages or other damages.
Employment attorneys will evaluate your case before they decide to represent you. After looking at the evidence and estimating how much compensation you’re likely to get (based on the amount of your monetary losses), they’ll probably advise you against moving ahead if they don’t think there’s a good chance of winning. It can be discouraging when a lawyer says no, but it’s always worth talking to several attorneys to discuss your options and get a clear picture of your case.