Defendant's Motion for Summary Judgment: Mitigation of Damages

[Style of Case]




A. Facts


B. Summary of the Damages Plaintiff Seeks

Plaintiff seeks compensation for lost wage payments due pursuant to the employment contract he had with Defendant. In addition, he seeks lost vacation pay, bonuses, pension rights, and the value of his net profit interest. He also seeks consequential damages, including his moving expenses and expenses related to finding new employment. See Plaintiff’s Responses to Defendant’s Discovery Request, Interrogatory No._____.




A. Failure to Mitigate Results in Reduced Damages Award

An employee who seeks damages for breach of an employment contract has a duty to minimize his or her damages by using reasonable diligence to obtain other employment. Lee-Wright, Inc. v. Hall, 840 S.W.2d 572, 580-81 (Tex. App. -- Houston [1st Dist.] 1992, no writ). If a wrongfully discharged employee fails to exercise reasonable diligence to mitigate his damages, he is barred from recovering any of the losses that he could have avoided. City of Laredo v. Rodriguez, 791 S.W.2d 567, 571 (Tex. App.--1991, writ denied).

“The correct measure of damages for wrongful discharge of an employee is the present cash value of the contract if it had not been breached, less any amounts that the employee should in the exercise of reasonable diligence be able to earn through other employment.” Lee-Wright, Inc., 840 S.W.2d at 581 (citing Gulf Consol. Int’l, Inc. v. Murphy, 658 S.W.2d 565, 566 (Tex. 1983)). Therefore, any amounts an employee could have earned through reasonable diligence are offset against the damages caused by the breach. Gulf Consol. Int’l, Inc. v. Murphy, 666 S.W.2d 383, 383 (Tex. App. -- Houston [14th Dist.] 1984, no writ).

B. Employer’s Burden of Proof

Although the employee who alleges that he was wrongfully discharged has a duty to use reasonable diligence to mitigate his damages by seeking other employment, the employer has the burden to show the amount the employee earned or could have earned during the period remaining on the contract after his discharge. Mr. Eddie, Inc v. Ginsberg., 430 S.W.2d 5, 9 (Tex. Civ. App.--Eastland 1968, writ ref’d n.r.e.). If the employer shows that the employee failed to mitigate his damages, however, the employer is entitled to have the recovery reduced by so much as the employee earned, or by the exercise of ordinary diligence could have earned, in other employment. I...

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