EEOC mediations and lawsuits often end in settlement of claims for employment discrimination in Texas, including wrongful termination. An important question for many employees filing employment discrimination claims with the EEOC is what they can expect in a settlement.
Many employment discrimination complaints filed with the EEOC in Dallas settle either in mediation with the EEOC or after filing a lawsuit but before trial. Settlements at these two stages happen at critically different stages of an employment discrimination claim so their settlement values are, collectively, different. We will discuss the average EEOC mediation or lawsuit settlement averages separately due to this important difference.
It is important to understand that employment discrimination claims are specific and average values may have absolutely no relevance to a particular claim.
Many factors affect a specific EEOC complaint or employment discrimination lawsuit, including: the type of discrimination claim; the strength of facts in the employee’s favor; strength of facts in the employer’s favor; whether the employee has an employment lawyer; whether the employer has an attorney; the employer’s desire to resolve the lawsuit; the employee’s desired result; and the employer’s explanation for the alleged discriminatory acts.
A particular EEOC complaint may be worth very little money based upon these factors or may be worth many times the average ranges.
What is the Equal Employment Opportunity Commission (EEOC)?
The Equal Employment Opportunity Commission (EEOC) is a federal agency responsible for enforcing federal laws that make it illegal to discriminate against an employee or potential employee/job applicant on the basis of race, religion, sex (including pregnancy), national origin, age (40 or older), disability or genetic information. These laws typically apply to employers, employment agencies and labor unions. (There must be at least 15 employees for the federal laws to apply but 20 for age discrimination.)
EEOC charge process
The EEOC, among other responsibilities, works in tandem with the Texas Workforce Commission to process charges of discrimination. Charges may be filed with either agency and they work together to investigate charges and accomplish appropriate remedies.
The EEOC does not exist to sue employers on behalf of employees, although it does file suits in some cases. The EEOC may approach a charge in many ways. These include mediation, remedial steps taken with the employer, filing suit, or declining to take any action. Before filing suit under any of the laws the EEOC enforces an employee must file a charge.
It is a good idea to hire an employment lawyer before filing a charge. Whatever you put into the charge becomes part of your claim for the life of your lawsuit. You might leave out an employment discrimination claim or explain facts in a way that is less than helpful. An employment lawyer familiar with employment discrimination lawsuits can help ensure your charge states the best case for your claims.
Should I hire an employment lawyer before going to the EEOC?
Before any charge or other complaint is made to an investigatory agency, your attorney has the ability to leverage the option for the defendant employer to resolve the issue before any public record is created regarding the allegations of discrimination. (And before the agency begins what could be a costly EEOC or TWC investigation.)
It is rare for claims to settle at this early stage; but it is an opportunity to begin a dialog with the employer’s counsel. If a settlement can occur before filing a charge, it is a one-time opportunity immediately lost after filing the charge.
Employers may be receptive to an offer to settle from a party without an attorney at this stage but usually for a very small amount of money just to get rid of you. An attorney may be able to discuss a more serious number. The employer will not have the same conversation with a pro se party that it will with an individual’s attorney.
Financial factors affecting the range of an EEOC mediation or lawsuit settlement of employment discrimination claims in Texas
In addition to some of the fact considerations discussed above in average settlement amounts of EEOC complaints, there are also important financial consideration that affect settlement values. In most employment law claims the possible monetary relief is usually a component of lost wages. Often this means lost wages, but can also include lost benefits, lost bonus opportunities and potentially lost wages from likely promotions.
As a result, monetary relief is limited by the employee’s income. Higher earning employees stand to recover larger payments in an employment discrimination lawsuit or mediation. An employee wrongfully terminated or suffering a significant demotion has greater lost wages and benefits than an employee suspended for a brief period of time or suffered a less serious demotion.
Compensatory damages
Employees can also recover punitive damages and other non-pay-based relief, like pain and suffering. These are compensatory damages, rather than the actual damages of lost compensation. The statute caps the amount based upon the size of the employer.
No matter how awful the behavior, the statutory caps always apply. For the largest of employers the cap is at $300,000. Employees do not always win punitive damages or other compensatory damages. Both sides must reasonably assess the possibility of compensatory damages up to the applicable cap.
Attorney’s fees
Attorney’s fees are often an issue in EEOC mediations and lawsuits. Employees (and rarely employers) can recover attorney’s fees. Employers, win or lose, will pay their attorney’s fees to defend a lawsuit.
Unless a case is particularly complicated or highly contested, the plaintiff’s attorney’s fees are rarely massive portions of monetary relief. An employer typically will consider the possibility of the employee recovering attorney’s fees but also must consider its own costs to defend the lawsuit. The longer the complaint or lawsuit continues the more money it pays.
This cost factor can play into an employer’s desire to settle a lawsuit. Early in a claim’s life the employer may be willing to pay a small settlement to avoid paying more attorney’s fees down the road to defend. This is especially true at early mediation stages. In many cases the employer’s early settlement considerations is avoiding likely attorney’s fees.
Later in the process the employer’s settlement considerations are a blend of likely continued attorney’s fees plus likely verdict amounts.
EEOC mediation settlement amounts in Texas
Settlement amounts at EEOC mediation are usually significantly less than billboards might suggest. EEOC mediation occurs at an early stage and often feels informal to both sides. It is a good place for the parties to deal with ongoing problems that can be resolved with continued employment. EEOC mediation can help reinstate a fired employee, undo a demotion or correct a discriminatory pay issue.
Employees can receive very good resolutions through EEOC mediation to improve workplace discrimination problems; however, an employee looking for compensation usually needs to look down the road. Employers rarely pay large settlements at this stage.
As a reference point, the EEOC publishes data on average settlement numbers during conciliation, which takes place after mediation. Conciliation occurs in those cases where the EEOC investigations a charge and finds discrimination likely occurred. After that finding it attempts to resolve the charge through a conciliation process which is a negotiation of the employee’s complaint plus requiring the employer to adopt anti-discrimination policies and procedures.
Average conciliation settlements result in approximately $20,000 settlements. That is after an EEOC finding of discrimination, which is a stronger position against the employer than the employee’s complaint alone.
Note that EEOC mediations are not necessarily the same as the employee might reach in a settlement in a private lawsuit or with the credible threat of litigation.
EEOC lawsuit settlement amounts in Texas
If the employee files a lawsuit then settlement negotiations will likely take place at larger sums. The average employment discrimination lawsuit settlement in Texas ranges between $35-40,000. Keep in mind that means a lot of lawsuits settle for less than that number. Most lawsuits settling above that number have survived summary judgment and are on their way to trial.
Settlements in the $35-40,000 range often settle in the discovery phase as both parties have an idea what evidence the other side possesses. At that point each side can consider the probability of success at trial and probable costs to get there.
You may see resources online suggesting settlement numbers far higher for employment discrimination lawsuits (like $75,000 averages) and employer costs exceeding $100,000 to defend. Many of these resources come from insurance companies who want to sell insurance coverage to employers for these claims. These numbers may become true if employment discrimination class action suits are part of the data.
Class actions involve multiple plaintiffs and a lot of employment lawyers. Analysis of EEOC verdicts may also produce those settlements but that is misleading data. When the EEOC takes a case to trial it is often a class action or an extremely strong case. They take very few cases to trial and generally only clear winners and big numbers.
So their averages should be much higher. Assembling all employment discrimination lawsuits that settle together includes all the smaller cases and more contested cases.
Should you hire an employment lawyer for an EEOC mediation or lawsuit in Texas?
Employment discrimination lawsuits are extremely technical lawsuits. Not having employment lawyers on your side will make it difficult to prosecute your claims. It will be difficult to fairly value your claims and drive a fair settlement.
Even at early stages it is important to have an employment lawyer working with your EEOC complaint to ensure you asserted the strongest complaint and have not limited your opportunity to recover for the harm caused by your employer.
Remember as well that a prevailing employee is entitled to recover attorney’s fees so that can ease the burden of hiring professional representation.