Breach of an Employment Agreement & the Duty to Mitigate Damages Under New York Law
I acknowledge that as a practical matter, this question - and the answer to it - will not apply to the vast majority of New York employees, and here's why:
At-will employees are called that because (with VERY rare exceptions) they can be fired at will.
Now that over 95% of the employment work force has been eliminated, let's focus on the last 5% that may have a viable claim for wrongful termination and breach of an employment agreement. In those cases, what is the appropriate measure of damages - and how can those claims be defeated (or at least undercut) in New York?
In the first instance, the plaintiff bears the burden of demonstrating how much he was owed under the terms of the contract, i.e., had the defendant honored its end of the contract, how much money would the plaintiff have earned, including both salary and other benefits?
Assuming that the plaintiff meets this burden of proof, the employer is then called upon to prove that the plaintiff failed to act diligently to mitigate his damages. In that regard, the defendant must show that the plaintiff could have obtained employment had the plaintiff made reasonable efforts (if plaintiff remains unemployed). On the other hand, if the plaintiff obtained a new, lower-paying job, the defendant is required to prove that the plaintiff could not have performed that employment while also fulfilling the contract obligations that existed between the defendant and the plaintiff.