The Role of Compensatory and Retributive Justice in Determining Damages in Employment Disputes†

Abstract

This study draws on theories of compensatory and retributive justice to examine how jurors and employment arbitrators reach decisions regarding awards and damages in cases involving allegations or wrongful discharge. The authors hypothesized that the decision to provide compensatory justice would be determined by both employee and employer attributes, whereas the decision to provide both compensatory and punitive justice would be determined by employer attributes. These hypotheses were tested using a policy-capturing exercise in which the decision makers were asked to make an award and damages determination in cases in which an employee was challenging his or her termination. Results generally support the hypotheses. Findings suggest that within the context of employment disputes, both jurors and employment arbitrators are influenced by a justice-providing motive that involves both compensating the victim and exacting retribution.