Duty to Mitigate

An Employee’s Duty to Mitigate Damages

A significant talking point when speaking with clients about their responsibilities after being wrongfully discharged from their employment is what their rights and responsibilities are after discharge.

After suffering a harm as a result of a wrongful discharge, an employee must take basic steps to minimize the economic harm they have suffered. A discharged employee needs to make reasonable efforts to find substantially similar employment. This standard requires an ongoing good faith effort on the part of the employee. Typically, an employee should document each and every contact he has made with a potential employer. This is because, if the employee decides to litigate the wrongful termination, the employee needs to show that he has “mitigated his damages”, that is, that he has engaged in a god faith effort to find substitute comparable employment.

The burden of proof is on the employer to show that the employee did not attempt to mitigate his or her damages. This means that the employer must show that comparable or similar employment existed at the time the employee was terminated but the employee did not attempt to secure post-termination employment.

When evaluating whether employment opportunities are substantially similar to the previous employment, a trier of fact (jury, judge or arbitrator) may consider whether the opportunity involves similar pay, opportunities for promotion, daily professional responsibilities and work conditions. This means that the employee who is engaged in good faith efforts to find a new job does not need to enter into another line of work, take a position for which he is overqualified or accept what would amount to a demotion.

If, however, the employee has several trades or various skills, the employee might be required to find and/or accept work in any of the trades in which the employee is trained. This may even include work that is different than the work performed for the defendant employer.

If a position for possible employment is located unreasonably far from the employee’s residence or is not conveniently located, the employee may properly refuse the position. This may not be true for positions where it is not uncommon for an employer to relocate its top professionals or executives. While considerations with regards to geography are still a factor for these type positions, declining a job offer on the sole basis of the requirement to move to a different location may be a basis for a trier of fact to hold that the employee failed to mitigate his or her damages.

Sometimes a terminated employee has no choice but to accept substitute employment which is not comparable to the one he held prior to termination. In this case, the wages the employee earned at the new non-comparable job are not considered for purposes of assessing the employee’s loss of earnings. In Rabago-Alvarez v.Dart Industries, Inc. (1976) 55 Cal.App 3d 91, 97, the Court held that when a plaintiff accepts menial employment after being terminated, the sum earned shall not be deducted from any award from wrongful termination, reasoning that any other rule would result in imposition of greater damages against employers and would penalize an employee “. . . [W]ho, either because of an honest desire to work or a lack of financial resources, is willing to take whatever employment he can find.” In the recent case of Villacorta v. Cemex Cement, Inc. (2013) 221 Cal.App.4th 1425, the plaintiff argued that his acceptance of a job which required him either to commute 2-3 hours per day or to rent a room closer to his new job, caused him to be away from his family five days per week, and therefore, the wages from the new job should not be used as a set-off against his economic damages. The Court, citing Rabago-Alvarez, supra, held that wages actually earned from an inferior job could not be used to mitigate damages, and that the location of the new job was a factor to consider in determining if the job was inferior. (Villacorta v. Cemex Cement Inc. 221 Cal.App.4th at 1432.).