Published on July 10th, 2013 by Alan L Sklover
What is the meaning of:
In employment matters “mitigation” is commonly used to mean two different things, in two different contexts.
First, in the context of employment litigation, “mitigation” generally means “to take steps to reduce the damages caused by the wrongful acts of others.” Some people call this “damages mitigation.”
For example, if an employee is terminated for a discriminatory reason, he or she can sue the employer, but he or she cannot collect financial damages in Court unless it can be shown he or she made a good faith attempt to replace the lost employment, and thus “mitigate” or lessen the lost income.
The law says, in effect, “The employee cannot sit back and relax, and let damages grow; that would be a waste to society.” This is called “the employee’s duty to mitigate.” “Damages mitigation” is relevant in 100% of employment Court cases.
Second, in the context of severance paid to laid off employees, “mitigation” generally means “your severance payments stop if and when you start a new job.” Some people call this “severance mitigation.”
For example, if the employee is entitled to 12 weeks of continued salary as severance, if he or she starts a new job in the eighth week, the severance payments cease.
The idea behind “severance mitigation” is actually quite similar to the idea behind “damages mitigation,” that you should not gain more from the employer than you actually lost. In my experience, “severance mitigation” is found in perhaps 15-20% of severance agreements, and is becoming less common.
Surely, there are arguments to be used against “mitigation” in either context. The important thing is to be aware of this concept, look for words and phrases in agreements and other documents that call for “mitigation,” and plan your life accordingly.
Now that you understand the concept, do all you can to “navigate” the “employee’s duty to mitigate,” whether in Court or in severance agreements.
© 2013 Alan L. Sklover. All Rights Reserved. Commercial Use Strictly Prohibited