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Disgruntled employee due to employment discrimination
March 11, 2024

Employment Discrimination Cases: A Forensic Economist’s Perspective

Author(s): Michael Trousdale

Federal and State laws prohibit workplace discrimination. When an employee or a job applicant alleges to be a victim of discrimination, they may pursue legal compensation for any financial losses and/or emotional distress they endured because of it. In many cases, determining reasonable and just compensation can be a complex undertaking, often requiring the services of an expert economist who is skilled in calculating economic damages.

If you or a client you represent is either a victim of workplace discrimination or an employer that may be involved in a discrimination lawsuit, our expert labor and employment consultants at Econ One can help you gather the information you need to assess economic damages.

What is Employment Discrimination?

Employment discrimination refers to the practice of treating someone differently, and typically less favorably, than others within the workplace. Discriminatory practices in the workplace can harm individuals or groups of employees in a variety of settings such as:

  • Resume screening and interviewing
  • Hiring
  • Assigning jobs, shifts, or specific projects
  • Determining promotions, pay increases, bonuses, or other compensation
  • Making termination or furlough decisions

The law protects employees from discriminatory practices based on a number of factors including a person’s:

  • Age
  • Disability
  • Race / Color
  • National Origin / Ethnicity
  • Gender / Gender Identity
  • Sexual Orientation
  • Religion
  • Genetic Information

How Prevalent are Employment Discrimination Charges?

Employment discrimination charges occur with remarkable frequency. In fact, tens of thousands of charges are filed across federal, state, and local jurisdictions each year. The U.S. Equal Employment Opportunity Commission, or EEOC (the agency responsible for enforcing federal discrimination laws and investigating charges filed at the federal level), alone reports having received an average of 75,000 discrimination charges annually, in recent years.

Notably, the number of federally filed charges has generally trended downward in recent years (as shown in the chart below), however 2022 saw an unprecedented 6-fold rise in religious discrimination claims in response to employer-mandated COVID-19 vaccinations. These figures, however, represent only a portion of the total employment discrimination charges filed nationwide as various state jurisdictions also have statutes that govern a victim’s right to pursue restitution if harmed by illegal discriminatory practices. As one example, California’s Civil Rights Department (which has the authority to investigate discrimination claims filed within the state of California) reported nearly 15,000 discrimination cases filed within the state of California in its latest annual report.

Total Federal Employment Discrimination Charges Filed (2016-2022)

Yearly bar chart showing the total number of federal discrimination charges filed.Source: EEOC Charge Statistics

Breaking down these charge statistics by type reveals that employment discrimination practices based on race/color, disability, or gender are the most common. As shown in the pie chart below, these three categories make up approximately three quarters of total discrimination charges filed. In contrast, discriminatory practices based on other factors such as a person’s national origin, religion, and genetic information tend to occur much less frequently.

One interesting trend that could become an important focal point in employment discrimination enforcement and litigation in the near future is discrimination based on genetic information. Despite its relatively small share of total charges at present, the prevalence of employment discrimination based on genetic information is slowly rising. As genetic screening technology continues to advance and become more widely used by the public, we should expect to see the frequency of discriminatory practices based on this genetic information to take more of an upward turn as well.

Share of Total Charges by Discrimination Type (2016-2022)

Pie chart showing the breakdown of total charges by discrimination type.

Source: EEOC Charge Statistics

What is a Typical Employment Discrimination Case Worth (in Terms of a Settlement Amount or Court-Awarded Damages)?

When it comes to calculating damages in employment discrimination cases, there is no one-size-fits-all model or formula that can apply to all settings. Determining a just and reasonable damages amount often requires multiple factors to be evaluated alongside salient facts that are specific to the employee and his or her employment circumstances. Therefore, it is often recommended that parties on both sides of a discrimination case retain an employment discrimination expert witness to assist with the economic damages assessment.

Conceptually, damages in discrimination cases often include some combination of:

(1) Lost back and front pay: Any wages, benefits, and other compensation (past or future) that the victim would have earned but for the discrimination.

(2) Compensatory damages: Includes the value of any tangible out-of-pocket expenses faced by the victim because of the discrimination as well as the value of intangible losses suffered by the victim such as emotional harm or damage to their reputation.

(3) Punitive damages: Damages awarded to punish the employer and deter them from repeating the offense.

(4) Attorney’s fees and other legal costs.

Although several types of damages may be relevant in a given discrimination case, not all types may be available in every case. Moreover, depending on the jurisdiction, some discrimination cases face limits on the maximum amount of compensatory and punitive damages that can be awarded. In Title VII (Civil Rights Act) cases, for example, such limits range from $50,000-$300,000, depending on the size of the employer.

Ultimately, the monetary benefits that victims of employment discrimination receive from successful claims varies widely. In many cases, the amount may be small—within the range of a few hundred to a few thousand dollars. In some cases, the amount could be substantially higher—within the range of tens or even hundreds of millions of dollars (however such cases tend to be rare). As a matter of fact, EEOC data can help provide some more precision on bounds on this range. Over the period 2018-2022 (the last 5 years reported), the average non-litigation settlement was worth about $30,000. For cases resolved through litigation, the average damages award was about $380,000 over that same period. Ultimately, the total damages amount an employee could be awarded in a discrimination case will depend on the type of damages sought and the specific facts and circumstances of the case.

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