Birmingham Employment Lawyers

Does Self-Employment Constitute a Reasonable Effort to Mitigate Title VII Damages?

Title VII of the Civil Rights Act of 1964 (“Title VII”) provides that “[i]t shall be an unlawful employment practice for an employer … to fail or refuse to hire or to discharge any individual, or otherwise discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” Once a court or jury finds a defendant liable under Title VII, there are a wide variety of remedies available for the court to award as damages to the plaintiff. The most common type of remedy awarded in Title VII claims in back pay, i.e. the compensation that the plaintiff would have received from the employer had the discrimination not occurred. Back pay includes salary, wages, tips, and fringe benefits.

A Plaintiff’s Duty to Mitigate Damages

To be entitled for a back pay award, a plaintiff must mitigate his or her damages by seeking employment “substantially equivalent” to the position the plaintiff held prior to termination or would have held had he or she not been denied the same. Substantially equivalent employment is employment that affords the plaintiff the same compensation, job responsibilities, working conditions, status, and promotional opportunities that he or she had. At the time of establishing back pay, the defendant bears the burden of proof that the claimant failed to mitigate his or her damages.

The Eleventh Circuit has held that a plaintiff’s decision to become self-employed after facing an adverse employment action from a previous employer may constitute reasonable diligence for purposes of a back pay determination. A self-employed person is “employed” for the purposes of mitigating damages if establishing a business of his own was a reasonable alternative to finding other comparable employment. The self-employment venture does not have to be successful, but only an “honest, good faith effort.” If a defendant wishes to thwart the plaintiff’s self-employment mitigation efforts, the defendant bears the burden of demonstrating to the court that the self-employment venture was not comparable work.

If you feel your rights under Title VII have been violated, or if you have any other questions regarding your employment rights, please contact the experienced Birmingham employment law attorneys at Wrady Michel & King. You can contact us either online or by calling us at (205) 319-9724. We are here to serve you.

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