Presuming Damages for Unemployment Distress

Abstract

Sachin S. Pandya

When someone becomes involuntarily unemployed, they typically lose not only income and wealth but also psychological well-being as a result. This paper proposes that when a plaintiff proves that a defendant's illegal action caused the plaintiff to be unemployed, courts can and should rebuttably presume a damages award amount for the emotional distress they suffer because they are unemployed. That presumed amount for such unemployment distress would be the product of the total time the plaintiff spent unemployed and the average unit cost of unemployment distress in the population of prevailing plaintiffs, as estimated based on past awards for unemployment distress. The time spent unemployed, and thus the presumed award, would be reduced by the same avoidable-consequences rule that generally restricts the size of awards for lost wages. The paper shows how this unemployment distress presumption operates and identifies its relative advantages: simplicity, anchoring, and better compatibility with constitutional law as compared to other laws that constrain jury discretion to award damages.