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Damages and the Duty to Mitigate in Employment Lawsuits

New Jersey plaintiff attorneys counsel clients on reasonable measures

A plaintiff’s duty to mitigate damages is widely recognized in business and employment litigation. Put simply, if Party A breaches a contract, Party A must pay damages for the economic loss the breach causes Party B. But Party B has an obligation to try to form a similar contract with someone else, to reduce the amount of damages Party A would have to pay if Party B were idle. In the employment context, an employee terminated after a contract dispute has a duty to try to find similar employment. If the employee does not fulfill that duty, a court can let the former employer off the hook for damages such as lost income. At Deutsch Atkins, P.C., we represent many high-level executives in breach of employment contract cases. We’re determined to see our clients receive the full measure of compensation they deserve, so we provide specific advice on reasonable steps to fulfill the duty to mitigate.

Duty to mitigate and the employer’s defense

A terminated employee cannot sit idly at home letting the damages for lost income pile up as the case for wrongful termination winds its way through the court. The law imposes a duty to take reasonable steps to obtain comparable employment. At trial, the employer can assert an affirmative defense by alleging:

  • The plaintiff failed to exercise reasonable diligence to mitigate damages.
  • It is reasonably likely that the plaintiff could have found comparable work.

Although the burden of proof is on the defendant employer, the standard for contract disputes is only “by a preponderance of the evidence,” not “beyond a reasonable doubt.” If the employer meets that burden of proof, the court can bar damages.

Understanding the concept of comparable employment

An employee is not required to take heroic steps to find work, but must be reasonably diligent. The employee is not required to accept work unless it is substantially similar to the previous position. Courts have ruled that the new job must offer “virtually identical promotional opportunities, compensation, job responsibilities, working conditions and status.” The law recognizes limitations on an employee’s duty to mitigate, such as:

  • Accepting a job for lower pay with less chance for advancement
  • Accepting a job in another community that requires relocating

As New Jersey’s largest employment litigation law firm, Deutsch Atkins is determined to protect the rights of employees to the full compensation they deserve.

Contact a leading NJ law firm for answers about your duty to mitigate damages

If you’ve got a solid case for breach of contract, don’t ruin your chances by failing to mitigate damages. Attorneys at Deutsch Atkins, P.C. provide reliable advice on the reasonable steps you must take to stay in compliance. Call us today at 551.245.8894 or contact us online to schedule a confidential phone consultation. Our firm has offices in Bergen County, New Jersey; Rockland County, New York; and Manhattan.