Wrongful Termination Settlements: What You Need to Know

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If you believe that your employer terminated you wrongfully, you may wonder what type of compensation you could get if you decide to sue. Or, if you are an employer, you may wonder what your liability could be if one of your managers wrongfully terminates someone. The truth is that most civil cases filed in American courts end up settling out of court as opposed to going to trial. That is because all lawyers know one thing: trials are risky. No matter how strong your case is, you never really know what a jury will do in any given case. Jurors can pick up on one small detail that alters the verdict in a way no one predicted.

In addition to being risky, trials are expensive and extremely time-consuming. If you must go to trial, you will likely remain embroiled in a legal battle for an extended period of time. This period of time is often quite stressful for you and your family. Because of this, both sides to any lawsuit generally prefer to settle out of court. But to settle, both sides must reach an agreement. Today we explore how opposing sides get to that agreement and what factors go into negotiating a fair wrongful termination settlement.

What Is Wrongful Termination?

Before discussing settlement details, a quick summary of what constitutes wrongful termination is helpful. As you may know, Maryland is an at-will employment state. This means that an employer can fire you for any legal reason or no reason at all. However, there are limits to this blanket discretion. Four main situations where termination is wrongful, even in an at-will work state, are when:

  • The employee had an employment contract, and the termination violated the terms;
  • The employer terminated the employee based on discrimination in violation of the Civil Rights Act of 1964 or similar state anti-discrimination laws;
  • The employer terminated the employee because they “blew the whistle” on illegal activities happening on the job; or
  • The company fired someone for exercising their legal workplace rights, such as taking medical or pregnancy leave or demanding overtime pay.

If a company fires someone for any of the reasons listed above, it may find itself the defendant in a wrongful termination lawsuit. Speak with a lawyer today to discuss a potential case.

Factors that Affect Settlement Amounts

Once a worker files a claim, attorneys on both sides go to work. Attorneys for the plaintiff work on proving the termination was wrongful and putting pressure on the company’s lawyers to make an offer to settle the case. Attorneys for the defendant company go to work attempting to discredit the plaintiff’s assertions with proof of their own. After discovery occurs and each side has shored up evidence to prove their case, negotiations typically begin.

But what factors affect the outcome of negotiations? And how much money is your case worth? Most people think that if they “win” such a case, it is worth millions of dollars. That is not typically the case in a wrongful termination. Settlement amounts are largely based on damages—which are the losses you suffered due to your employer’s illegal actions. Let’s look at some factors that attorneys take into consideration when attempting to work out a wrongful termination settlement.


The following damages contribute to the value of your settlement.

Lost wages

Obviously, lost wages leads the list of factors to consider when deciding an appropriate wrongful termination settlement amount. If you are the plaintiff, lost wages include the amount of money you would have made if your employer had not fired you. If enough time passes before reaching a settlement, earnings growth like raises and bonuses are calculated as well.

It is important to note that you have a responsibility to mitigate damages by doing all you can to get a new job. If you don’t attempt to lessen your own damages, your award will likely decrease. And if you do find a job, but it pays less, you can add the difference in pay to your lost wages calculations.

Lost benefits

Your attorney can include things like health insurance, retirement plans, pensions, and the like when crafting a settlement amount.

Emotional distress

When your boss fires you, it can set off a chain reaction of stress. The law classifies this emotional distress as “pain and suffering.” When juries award money for pain and suffering, it can be substantial, particularly if the employer’s actions were egregious. Fear of a big pain and suffering award at trial is one of the factors that can motivate defendants to settle out of court.

Costs related to job hunting

Any tangible expenses related to finding new employment may be added to the settlement amount. This includes things like joining employment services that charge a fee.

Punitive damages

Punitive damages are not actual economic losses. They are intangible losses used to punish a defendant’s egregious behavior. If your employer acted maliciously, a jury might award these damages as a way of holding them accountable. These awards are rare, but when they happen, they can be for millions of dollars.

Other Factors

There are other factors besides damages that can significantly increase your award. The first and most impactful factor is whether you hire a lawyer. People who claim wrongful termination typically get two to three times more money when they use an experienced attorney who knows how to handle these cases. And even though the attorney typically takes a significant cut of the settlement amount, you still come out much farther ahead in the final analysis. Other factors include:

  • Refusing the first offer and negotiating for a higher amount;
  • Employers who have over 100 employees tend to pay larger settlements than smaller employers; and
  • Filing an actual lawsuit as opposed to just filing a claim.

When you go to the trouble of actually filing suit, it signals that you are very serious about your claim and typically results in higher settlements.

This Is No Time to “Go It Alone”

The attorneys at the Smithey Law Group are here to protect your rights in the workplace. We have helped many people just like you get the compensation they deserved after their employer wrongfully robbed them of their livelihood. Call us at 410-919-2990 or contact us online today.

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Joyce Smithey, a seasoned employment and labor law attorney, has over 22 years of experience representing both employers and employees in Maryland and D.C. Her practice, rooted in a deep understanding of employment law, spans administrative hearings to federal litigation. Joyce's approach is comprehensive, focusing on protecting client interests while ensuring legal compliance. A Harvard graduate, her career began in Fortune 500 companies, transitioning to law after a degree from Boston University School of Law. Joyce's expertise is recognized by numerous awards, including Maryland’s Top 100 Women. At Smithey Law Group LLC, which she founded in 2018, Joyce continues to champion employment rights, drawing on her rich background in law and business.

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