Consider an offer of reinstatement

In certain circumstances, where an employee has been improperly terminated or constructively discharged, an employer may consider an offer of reinstatement to the plaintiff employee to limit exposure to damages.

Under federal law, an offer of reinstatement precludes further accumulation of back-pay damages whether or not the plaintiff accepts the offer, as long as the refusal was unreasonable.

The offer must be in good faith and unconditional, must present a realistic option for the plaintiff, and must be for reinstatement to a position that is substantially equivalent to the plaintiff’s former position.

If the investigation of the matter does not disclose any evidence indicating that the employee is unqualified for the position or has committed affirmative misconduct, then it may be worth considering the option of reinstatement. However, the employer should consider all circumstances in deciding whether reinstatement is a viable, realistic option.

The offer of reinstatement should be made in a letter signed by an appropriate company official and ideally on the company’s letterhead so that it does not appear to be merely a defensive strategy. The letter should be forwarded to the plaintiff’s lawyer. It should state that the position offered is the same position or is comparable to the position the employee had before the termination. A comparable position is one that has the same salary, status, job duties, and promotional opportunities as the previous position.