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A costs-and-results distribution for wrongful-termination lawsuits

BusinessWeek, April 23, 2007 at 60, draws on data from Cornell Law School and the Hofstra Labor & Employment Law Journal to depict what happens – and the cost – to a typical set of 10,000 US employment suits. Of that group, 7,000 (70%) settle for an average cumulative defense cost of $10,000. Another 2,400 (24% of the original group; 80% of the remaining 3,000) are resolved by a motion for summary judgment or other pretrial ruling at an average defense cost of $100,000. Still, 600 go to trial (6%) with their average cost rising to a cumulative $175,000. Out of that group, 186 (14.3%) result in a win for the plaintiff employee, with costs which average for a five-day trial about $250,000 each. But, something like 22 of those pro-plaintiff judgments are typically appealed (12%) and nine are overturned; the remaining 13 have cumulative costs of defense of $300,000.

On these figures, the average cost of an employment lawsuit in the US, through trial, is $41,500. For about one out of seven trials the plaintiff wins, of which victories the defendant overturns about one out of seven. The costs of those infrequent cases of losses to employee plaintiffs – fewer than two percent – average in the low hundreds of thousands of dollars.