Question

Josh worked for the Johnson Boat Works Company as a maintenance welder for 15 years. At the beginning of each five years of employment, Josh signed a five-year work agreement with the company. Soon after Josh had signed a new five-year agreement, Josh was fired by the new owner of the company. At the time of his firing, Josh was making $25 an hour and his employer-paid benefit package, which included health care and other government mandated items, was worth about 20% of his wages. Although Josh started looking for a new similar job right away, it was eight months before he got a new job. The new job pays $22 per hour, but it is on a contract that pays no benefits other than his wages. On advice from his attorney he recently filed a wrongful discharge case against Johnson Boat Works.

Assume that the Johnson Boat Works Company is found liable for the firing of Josh. Also assume a 40-hour work week and a 52-week work year. Josh worked for 13 weeks during the first year at the new job. Assume that he continued to work at his new job for all of years two and three, and that during the fourth and fifth years, Josh lost his contract job and had to work a minimum wage job at $15,000 a year with employer paid benefits that amounted to 10% of his wages. Using only the information above, what is the total amount of damages suffered by Josh during the entire five-year contract period? [Provide one total dollar amount for the damages.]

Show clearly labeled and organized computations below. Do not adjust for present value.

Answer 1

The answer to the problem can be calculated as follows:

Step 1

Wages Josh would have earned in 5 years had he not been fired by Johnson Boat Works Company

Sr No.	Particulars	Calculations	Amount
A	Basic Wages per hour	Given	$25
B	Benefit package, which includes health care and other government mandated items	A * 20%	$5
C	Total Hourly rate	A + B	$30
D	Working hours in a week	Given	40
E	Weeks in a year	Given	52
F	Total years considered	Given	5
G	Total working hours in 5 years	D * E * F	10400
H	Wages Josh would have earned had he not been fired	C * G	$312,000

Step 2

Wages actually earned by Josh

Sr No.	Particulars	Calculations	Amount
	Year 1,2 & 3
A	Working hours in a week	Given	40
B	Weeks worked in a Year 1	Given	13
C	Weeks worked in a Year 2	Given	52
D	Weeks worked in a Year 3	Given	52
E	Total working hours in Years 1,2 & 3	A * (B+C+D)	4680
F	Wage rate per hour	Given	$22
G	Wages earned in Year 1,2 & 3	E * F	$102,960
	Years 4 & 5
H	Minimum Wages per year	Given	$15,000
I	Other benefits	H * 10%	$1,500
J	Total yearly wages	H + I	$16,500
K	Wages earned in Year 4 & 5	J * 2	$33,000
L	Total Wages earned during 5 year period	G + K	$135,960

Step 3

Damages suffered by Josh

Sr No.	Particulars	Calculations	Amount
A	Wages Josh would have earned in 5 years had he not been fired by Johnson Boat Works Company	Step 1	$312,000
B	Wages actually earned by Josh	Step 2	$135,960
C	Damages suffered by Josh	A - B	$176,040

I hope this helps. :)