California Civil Jury Instructions (CACI) (2017)

2406. Breach of Employment Contract - Unspecified Term— Damages

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2406.Breach of Employment Contract—Unspecified
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.
New September 2003; Revised December 2011
Directions for Use
For an instruction on mitigation, see CACI No. 2407, Employee’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 instructions on present cash value, see CACI
No. 3904A, Present Cash Value, and CACI No. 3904B, Use of Present-Value
Sources and Authority
• Damages for Breach of Contract. Civil Code section 3300.
“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.)
• “[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.
• In cases for wrongful demotion, the measure of damages is “the difference in
compensation before and after the demotion.” (Scott v. Pac. Gas & Elec. Co.
(1995) 11 Cal.4th 454, 468 [46 Cal.Rptr.2d 427, 904 P.2d 834].)
Secondary Sources
3 Witkin, Summary of California Law (10th ed. 2005) Agency and Employment,
§§ 267, 268
Chin et al., Cal. Practice Guide: Employment Litigation, Ch. 17-B, Contract
Damages, ¶¶ 17:81, 17:95, 17:105 (The Rutter Group)
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)