Theft can take many forms and employers should take several steps to make sure they’re prepared.
Employers are shocked when long-term, supposedly loyal employees steal from them. The Eighth Circuit Court of Appeals (the federal appeals court serving Iowa and some other Midwestern states) recently ruled in a case involving a long term former Cargill manager who embezzled over $25 million over eight years. According to the court, although Cargill had the appropriate checks and balances in place, including audit procedures and internal controls, the thieving employee knew how to circumvent them. More recently, an employee at Procter & Gamble in Iowa City was arrested for allegedly illegally gaining access to the paycheck system and changing the direct deposit information for several co-workers to make deposits into a fake account he allegedly set up. He allegedly stole over $5000 before he was caught. The businesses may not have discovered their employees’ conduct for years had it not been for an official audit or the careful attention of a reporting coworker.
Theft occurs in other ways, too. Time theft occurs where employees regularly take longer breaks or lunches, arrive late or leave early but log a full day’s work, or perform non work related task during work hours(e.g. excessive personal calls, social media, and online shopping).
Moreover, a study by a national supermarket organization found that grocery store employees were responsible for around 56% of supermarket thefts, ranging from stolen inventory to unauthorized customer discounts. (Hy-Vee recently reported changes to its employee discount program.) Data theft is also increasingly common and just as dangerous to a company if the stolen digital assets include proprietary data or individuals’ sensitive personal information.
Theft of any nature should be a terminable offense. Employers should take the following steps to ensure that they are prepared to respond when an employee is caught stealing.
Policies: Employers should consider requiring employees to sign an acknowledgment that they understand they have no privacy rights with items they bring to the work premises, such as purses and other bags or computer files and emails; that they may be subject to and consent to video surveillance in certain areas; and that they are aware that participation in investigations is mandatory and that refusal to participate may result in termination. Also, your progressive disciplinary policy should clearly identify that employee theft is a terminable offense.
Investigations: Theft should never be taken lightly. But before accusing someone of it, be sure your evidence is strong. Accordingly, a thorough investigation of the theft allegation is critical. Failure to conduct a proper investigation can serve as evidence of pretext for a discrimination or wrongful discharge claim. I recommend that employers suspend the suspected employee pending the investigation’s outcome. (Sometimes this is enough to resolve the matter, with the employee resigning or abandoning their job in response.) Always allow the accused employee to tell his or her story in full, and ask witnesses to write their own statements without the investigator’s help or interference. If your investigation produces strong evidence of the misconduct, then proceed with a termination. T he termination meeting should not be the first time an accused learns that he or she is suspected of theft.
Notify your insurer: If you have a policy that protects against such employee misconduct, notify your insurance carrier of the allegations and investigation findings immediately. You may have certain responsibilities to the insurance carrier to take certain actions before making a claim.
Pressing Charges: Should you call the police? It depends. For years, many managers and their lawyers believed it was a best practice and a good theft deterrent. However, times have changed. Before calling the police, it is critical to know how seriously they will respond to allegations of theft of a few hundred dollars in merchandise. Some police departments are simply too overwhelmed to do more than write a report of the complaint. Of course, thefts involving thousands of dollars may be another issue. Check with your local law enforcement agency and proceed accordingly. Again, your insurance policy may require you make a criminal complaint.
Records retention: Finally, keep all records regarding the alleged theft, investigation, and termination. Nothing should be destroyed. Video footage of an employee pocketing a twenty, for example, is outstanding evidence in court. Conversely, not having the video footage of the employee pocketing the twenty in an employment trial will be outstanding evidence for the plaintiff. No explanation will overcome a jury’s assumption that if the video is missing, the employer did not want them to see it.
Eliminating theft entirely in the workplace is impossible. However, employers can limit their liability by having policies in place and conducting a proper investigation after a theft allegedly occurs.
Source: The Gazette