Assessing Economic Damages in Wrongful Termination Cases


David A. Macpherson and Stanley P. Stephenson. 2016. Assessing Economic Damages in Wrongful Termination Cases. Journal of Legal Economics 23(1): pp. 31– 48.

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This paper presents a method for measuring economic damages in wrongful termination cases. Such cases present the damages expert with a problem since the available studies of earnings recovery after a job loss are based on a limited time period after a job loss and many workers never catch-up to the previous earnings level. A two-step approach is offered. First, the expert uses appropriate available empirical evidence to develop a typical earnings catch-up period. Second, the expert gathers information about case factors affecting the duration of the period to earnings catch-up. Using these factors, the expert modifies the base time period to develop a reasonable range of years for earnings catch-up. The ultimate choice of lost earnings is left for the court to decide, given the range presented by the expert. Cases directly or indirectly supporting this method are presented.


David A. Macpherson, Stanley P. Stephenson

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