Compensatory Damages

Definition

Compensatory damages are a form of monetary compensation awarded to a plaintiff to cover the loss or injury they have suffered due to another party's actions or negligence. These damages are designed to restore the injured party to the position they would have been in had the harm not occurred, making them a key aspect of legal remedies in various employment-related disputes.

5 Must Know Facts For Your Next Test

1. Compensatory damages can be categorized into two main types: economic damages, which cover quantifiable losses like lost wages, and non-economic damages, which address intangible harms such as emotional distress.
2. In employment law cases, compensatory damages may be sought in situations like wrongful termination or discrimination where an employee has suffered financial harm or emotional distress due to the employer's unlawful actions.
3. The amount of compensatory damages awarded can vary significantly based on the specifics of each case, including the severity of the harm and the extent of the losses incurred.
4. Plaintiffs seeking compensatory damages must provide evidence to demonstrate their losses clearly; failure to do so may result in reduced compensation or denial of claims.
5. In some instances, punitive damages may be awarded alongside compensatory damages if the defendant's conduct is found to be particularly egregious or malicious.

Review Questions

• How do compensatory damages function as a remedy for breaches of contract in employment relationships?
  • Compensatory damages serve as a remedy for breaches of contract by providing monetary compensation to the injured party for losses incurred due to the breach. For instance, if an employee is wrongfully terminated in violation of their contract, they can claim compensatory damages to cover lost wages and benefits. This helps ensure that employees are made whole for any financial harm suffered due to their employer's failure to uphold contractual obligations.
• Discuss how compensatory damages relate to exceptions to at-will employment and their implications for employees seeking redress.
  • In cases involving exceptions to at-will employment, such as implied contracts or public policy violations, employees may seek compensatory damages if they are wrongfully terminated. For example, if an employee was promised job security through company policies but was fired without cause, they could pursue compensatory damages for lost income and benefits. This highlights the importance of understanding that while at-will employment allows for termination without cause, exceptions can provide grounds for significant financial recovery.
• Evaluate how compensatory damages play a role in employment discrimination lawsuits and their impact on workplace policies.
  • In employment discrimination lawsuits, compensatory damages are crucial as they provide financial restitution for individuals who have experienced unlawful treatment based on protected characteristics. By awarding compensatory damages for lost wages and emotional distress, these cases highlight the need for employers to adhere strictly to anti-discrimination laws. The potential for substantial damages encourages employers to implement effective workplace policies that promote equality and prevent discriminatory practices, thus fostering a more inclusive work environment.

Related terms

Punitive Damages:

A type of damages awarded in addition to compensatory damages, aimed at punishing the wrongdoer and deterring future misconduct.

Economic Loss: Financial losses that can be quantified and directly attributed to an event, such as lost wages, medical expenses, or property damage.

Non-Economic Damages: Compensation for intangible losses such as pain and suffering, emotional distress, and loss of enjoyment of life.