Unconditional Employment Offers Reduce Plaintiffs' Damages Claims

In wrongful termination cases, employers face risks of large jury awards that include several months, and sometime years, of back pay - from the date of termination to the date of the jury award. In some cases, a jury could also award the plaintiff front pay for wages that the plaintiff would have earned after the date of the jury award had the plaintiff not been wrongfully terminated. Because wrongful termination cases do not usually go to trial until at least 18 months after the plaintiff filed the lawsuit (which is usually a year or more after the termination of employment), an employer could have significant exposure to a large jury award of anywhere from 2 to 5 years of the wages the plaintiff could have earned, plus interest, if the employer had not engaged in the allegedly discriminatory conduct.

Fortunately, an employer can perform a simple act which could eliminate the employee's claim for front pay and severely limit the claim for back pay. The employer could make an unconditional employment offer to the former employee of reinstatement to the employee's former position upon the same terms and condition of employment.

An unconditional offer does not resolve the employee's claim of wrongful termination. Nor does it eliminate the employee's claim for back wages. Instead, the unconditional offer could limit the claim for back pay from the termination date to the date of the offer or its rejection, but not beyond.

The United States Supreme Court examined unconditional employment offers in Ford Motor Co. v. E.E.O.C., 458 U.S. 219 (1982). In Ford Motor, three women filed charges with the EEOC claiming that Ford did not hire them because of their sex. Approximately two years after the women filed their charges, Ford offered positions to two of them. Ford's offers did not require the women to abandon or compromise their Title VII claims. Nevertheless, the women rejected Ford's employment offers.

The Supreme Court held that the women's claims to back pay could run up to, but not beyond, the date that they rejected Ford's employment offers, reasoning that the women could have mitigated their damages by accepting Ford's employment offers. The Court rejected the EEOC's argument that an employment offer that ends continuing liability for back pay must also include an offer of seniority retroactive to the date of discrimination.

An unconditional offer of employment or reinstatement can be an effective means by which an employer can drastically reduce the amount of damages that a court may award to an employment discrimination plaintiff. The unconditional offer cannot include any terms that would require the plaintiff to settle, compromise, or withdraw the discrimination claim. Employers facing discrimination claims should consult with their attorneys and strongly consider extending unconditional employment offers to the complaining parties.