How Unemployment Affects Your Personal Injury Case

Being unemployed – even if temporarily – can affect your personal injury case in myriad ways. Though, most noticeably, your employment status may alter the damages calculus for your case (wage loss often makes up a significant portion of personal injury damages), your employment status can also affect other aspects of the litigation process.

To learn more about damages in personal injury cases, please read our article here.

Certainly, it is not uncommon for aggressive defense counsel to attempt to smear your character after discovering that you are unemployed. The defense might thereafter conduct what is known as a "fishing expedition," or an overly-broad investigation into unrelated elements of the plaintiff’s life, in order to learn more about your background so that they can build a negative narrative that undermines your claims in court.

Seeking the representation of a skilled personal injury attorney is crucial in highly contested personal injury actions, such as one involving an unemployed plaintiff. A skilled personal injury attorney will help you guard against unreasonable intrusions into your private life, counter the narrative of defense counsel, and maximize your damages despite the lack of present employment.

Unemployment Benefits and Privacy

If you are unemployed, you may have decided to apply for and receive unemployment benefits to maintain your finances while looking for a position. The decision to pursue employment benefits can be a difficult one for many people, as, emotionally, many unemployed persons struggle with the idea of requesting assistance. The thought of having sensitive information in this area investigated and revealed for the purpose of smearing one’s character and undermining one’s claims can be somewhat frightening. Fortunately, the laws of California grant explicit privacy protections to persons who have sought unemployment benefits, among others. Your decision to accept government assistance in the form of unemployment benefits cannot be used as a jumping off point for the defense to pry into the details of said assistance.

As the Supreme Court of California wrote in Crest Catering v. Superior Court (1965), "These provisions [Evidence Code section 1040 and Unemployment Insurance Code section 2111] manifest a clear legislative purpose to preserve the confidentiality of information submitted to the Department of Employment." The court went further, finding that the person who provides information to the Department of Employment may themselves claim the privilege.

Suppose, for example, that you are a plaintiff in a personal injury case and unemployed. The defendant discovers that you are unemployed and thereafter pursues your communications with the Department of Employment to reveal the details of your unemployment benefits and the communications involved. The defense is hoping, perhaps, to find out the details given as to why you are struggling to find a position, so that they can use these details against you in court – if you are arguing that your injury makes it more difficult to find or keep a job, then they could use the details of your unemployment benefits communications to undermine your argument (by showing that there are other, more influential reasons for why it is difficult for you to find or keep a job).

Importantly, thanks to the case law, even if the defense did attempt to compel the Department of Employment to disclose the details and communications, you can assert your confidentiality privilege to prevent it.

Fortunately, as the case law is well established, the Department of Employment almost always denies discovery attempts for unemployment benefits records. Of course, even if they did not do so, you could assert the confidentiality privilege for yourself.

Unemployment and Damages: Wage Loss

Present unemployment can and probably will decrease the potential damages of your personal injury claim, as a significant component of damages in personal injury is wage loss. The wage loss for an unemployed person is zero. In other words, there is no present wage loss component to your damages claim. So what does this mean?

Though there is not a legitimate present wage loss claim, a skilled attorney will use your education, training, and background – in conjunction with expert opinions and evidence indicating your pre-injury future prospects in job market – to argue that the injury robbed you of future earnings potential. This future loss of earnings claim will make up the bulk of your wage loss damages. Loss of future earnings is otherwise known as loss of earning capacity.

What is a reasonable estimate for lost earning capacity will generally hinge on a list of factors that includes work history, education and training, pre-and-post-injury limitations, immigration status, and more. Unfortunately, your unemployment status can seriously hurt your lost earning capacity claim if you have not been employed for a lengthy period of time. If you have been actively looking for a position and have been unemployed for a relatively short period of time, on the other hand, your lost earning capacity claim will be substantially stronger. Regardless, you’ll want the representation of an experienced personal injury attorney who can not only effectively argue that your future prospects have been limited by the injury, but also has the relationships and resources necessary to bring in skilled experts.

The defense may attempt an investigation into the details of your work history if loss of earning capacity is asserted. Employment records are protected absent a compelling need for their disclosure. Whether the defense can overcome this privilege depends on the circumstances of your case, as well as your background and work history.

Unemployment and Damages: Mitigation of Damages

Being unemployed at the time of the injury can also strengthen the defendant’s potential assertion that you did not take reasonable steps to mitigate your damages. In California, the defendant has a partial defense to personal injury (the defendant can reduce their damage liability) if they can prove that the plaintiff could have reasonably found employment after the injury and therefore mitigated, or reduced, their total damages. Of course, the mitigation defense is altered when the plaintiff was already unemployed at the time of injury.

As the court in Wilson v. Union Pacific Railroad Co. (1995) wrote, "an unemployed plaintiff who is able to look for work does not satisfy his duty to mitigate by waiting passively for employment to be offered." In other words, even after you have been injured, you must make reasonable efforts to seek out appropriate employment.

This can be a bit complicated, so let’s break this down with an example.

Suppose that you are unemployed when you are hit by defendant’s car and injured. You’ve worked in physical labor jobs for most of your life. The injuries that defendant caused have made it very difficult for you to perform the physical feats necessary to such positions.

The defendant would normally have a difficult time proving that you are capable of performing physical labor jobs after the injury, but because you were unemployed at the time of the injury, the defendant may attempt a different sort of argument. The defendant may argue that you are, in fact, capable of working post-injury, and the fact that you were unemployed at the time of the injury is proof that you are not and were not reasonably pursuing such opportunities. Of course, if the evidence is in your favor, it will show that the defendant is incorrect in making such an assertion, but nevertheless, your unemployment status can make this a harder-fought battle.


Being unemployed at the time of injury may complicated your personal injury case, but it need not destroy it.

For a free consultation with an experienced, highly successful San Jose personal injury attorney, call the Law Offices of Brian O’ Grady at (650) 318-6131 to set up your appointment today.