Lost income, wages, and benefits may be recovered in a wrongful termination lawsuit. These are called economic damages, which is separate from emotional distress damages that may also be recovered. The amount of the economic recovery depends on how much money is lost. For example, if an employee earning $50,000 a year is wrongfully terminated, but the very next day finds a new job earning $60,000 per year, there are no economic damages. But if that same employee takes six months to find a new job, and then accepts a job making $40,000 per year, the employee will have lost six months of wages, and will continue to lose $10,000 per year. The ongoing loss of $10,000 per year is called front pay, or future economic losses. The amounts already lost are referred to as back pay, or past economic losses.
There is one big caveat to all of this. In order to claim economic damages, including lost past and future wages and benefits, the wrongfully terminated employee must make reasonable efforts to find a new and comparable job. This is the duty to mitigate. Mitigation is the process of minimizing one’s losses. During the pendency of a wrongful termination case, it is important to keep records of all job applications, interviews, and other efforts to find a job. Jobsites such as Indeed.com are helpful since they track all applications and responses. It is recommended that an employee use at least one online job search site and make some effort every day to find new work. If an employee turns down comparable work, or does not make reasonable efforts to find work, he may not be able to claim lost income in the wrongful termination case.