California Civil Jury Instructions (CACI)

2406. Breach of Employment Contract - Unspecified Term— Damages

If you find that [name of defendant] [discharged/demoted] [name of plaintiff] in breach of an employment contract, then you must decide the amount of damages, if any, that [name of plaintiff] has proved [he/she] is entitled to recover. To make that decision, you must:

1. Decide the amount that [name of plaintiff] would have earned from [name of defendant] up to today, including any benefits and pay increases; [and]

2. Add the present cash value of any future wages and benefits that [he/she] would have earned after today for the length of time the employment with [name of defendant] was reasonably certain to continue; [and]

3. [Describe any other contract damages that were allegedly caused by defendant's conduct.]

In determining the period that [name of plaintiff]'s employment was reasonably certain to have continued, you should consider, among other factors, the following:

(a) [Name of plaintiff]'s age, work performance, and intent regarding continuing employment with [name of defendant];

(b) [Name of defendant]'s prospects for continuing the operations involving [name of plaintiff]; and

(c) Any other factor that bears on how long [name of plaintiff] would have continued to work.

Directions for Use

For an instruction on mitigation, see CACI No. 2407, Breach of Employment ContractUnspecified TermEmployee's Duty to Mitigate Damages. This instruction should be given when plaintiff claims loss of employment from a wrongful discharge or demotion or a breach of the covenant of good faith and fair dealing. For an instruction on present cash value, see CACI No. 3904, Present Cash Value.

Sources and Authority

"The general rule is that the measure of recovery by a wrongfully discharged employee is the amount of salary agreed upon for the period of service, less the amount which the employer affirmatively proves the employee has earned or with reasonable effort might have earned from other employment. However, before projected earnings from other employment opportunities not sought or accepted by the discharged employee can be applied in mitigation, the employer must show that the other employment was comparable, or substantially similar, to that of which the employee has been deprived; the employee's rejection of or failure to seek other available employment of a different or inferior kind may not be resorted to in order to mitigate damages." (Parker v. Twentieth Century-Fox Film Corp. (1970) 3 Cal.3d 176, 181-182 [89 Cal.Rptr. 737, 474 P.2d 689], internal citations omitted.)

Civil Code section 3300 provides: "For the breach of an obligation arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate the party aggrieved for all the detriment proximately caused thereby, or which, in the ordinary course of things, would be likely to result therefrom."

"[I]t is our view that in an action for wrongful discharge, and pursuant to the present day concept of employer-employee relations, the term 'wages' should be deemed to include not only the periodic monetary earnings of the employee but also the other benefits to which he is entitled as a part of his compensation." (Wise v. Southern Pac. Co. (1970) 1 Cal.3d 600, 607 [83 Cal.Rptr. 202, 463 P.2d 426].)

In determining the period that plaintiff's employment was reasonably certain to have continued, the trial court took into consideration plaintiff's " 'physical condition, his age, his propensity for hard work, his expertise in managing defendants' offices, the profit history of his operation, [and] the foreseeability of the continued future demand for tax return service to small taxpayers. . . .' " (Drzewiecki v. H & R Block, Inc. (1972) 24 Cal.App.3d 695, 705 [101 Cal.Rptr. 169].)

In cases for wrongful demotion, the measure of damages is "the difference in compensation before and after the demotion." (Scott v. Pacific Gas & Electric Company (1995) 11 Cal.4th 454, 468 [46 Cal.Rptr.2d 427, 904 P.2d 834].)

Secondary Sources

2 Witkin, Summary of California Law (9th ed. 1987) Agency and Employment, §§ 179, 180

4 Wilcox, California Employment Law, Ch. 60, Liability for Wrongful Termination and Discipline, § 60.08[3] (Matthew Bender)

21 California Forms of Pleading and Practice, Ch. 249, Employment Law: Termination and Discipline, §§ 249.01, 249.17, 249.50 (Matthew Bender)

10 California Points and Authorities, Ch. 100, Wrongful Termination and Discipline, Forms 8, 15 (Matthew Bender)

(New September 2003)