Experienced executives and experts share their advice and fixes for your challenges in business.
Do you find that you have to replace office supplies too frequently? Is equipment unaccounted for? Is the register coming up short? Employee theft can take on many forms, and temptation or desperation can overcome years of loyal service. When a trusted worker has been taking from your business, it is damaging to your company’s financial health, employee morale and your peace of mind. Oftentimes small businesses have fewer anti-theft measures, policies and procedures in place, perhaps making them more susceptible to pilferage. But big companies are prime targets due to a large number of vendors and a high cash flow, which can make misappropriation easier to conceal. It’s a difficult management situation that needs to be handled properly. Given that all companies are at risk, what should you do when you suspect or discover theft by an employee? Three professionals give some valuable advice.
Shareholder, Kantrow, Spaht, Weaver & Blitzer
If you suspect that employees are taking supplies, refrain from reacting immediately or emotionally. From a legal standpoint, it is important to distinguish between what you “know” and what you suspect. Making accusations of criminal conduct without having solid evidence creates a risk for a potential defamation claim should your suspicions be proven incorrect.
Your first step should be to determine what is missing and who is involved. Review any “hard evidence” that may exist, such as video surveillance, and otherwise document why you believe that supplies were taken. Next determine whether the employees’ activities could be considered a misunderstanding. Were the supplies of such little value that the employees thought they were allowed to take them? Did the employees take company tools to use at home, intending to return them later?
Meet with the involved employees, giving them the opportunity to explain their actions and document their response. If the proof is indisputable and the employees’ intent to steal is clear, contact your employment law attorney for guidance on how to terminate or discipline the employees and to determine whether recovery through wage reduction or other means is allowed. Whatever steps you take, be consistent in your treatment of employees. If an employee has been allowed to take supplies in the past or has been given only a “slap on the wrist” for doing so, an employee who is dismissed for the same infraction may claim unlawful discrimination if he or she falls into a legally protected category.
Finally, learn from the incident and remain vigilant. Communicating and enforcing a clear policy on the personal or out-of-office use of company property is the best way to ensure that there are no misunderstandings and will enable you to take appropriate action if the policy is violated.
Managing director, Silver Zebras
For a business owner or manager, employee theft can be devastating and quickly lead you to develop a frame of mind where you stop trusting people in general. Theft is theft, of course, whether it is theft of cash, time, major pieces of equipment, or even the pens, notepads and paper clips from the office supply cabinet.
There may be any number of reasons your staff members are plundering the company storeroom: lack of clarity in company policy, no inventory procedures, or an inadequate process for requesting and accessing supplies. Sometimes, of course, employees take supplies at any time because they need the items to do their jobs. And yes, on the extreme end of the spectrum you may encounter employees who believe “The business can afford this, while I can’t” or “My pay is low, so I’m going to make up for it by taking home these items.”
When you encounter this situation, first determine if you’ve been clear in articulating expectations regarding use of supplies or other business equipment.
If, however, lack of clarity is not an issue, you should approach this as a violation of trust and/or company policy. Conduct a thorough investigation to determine who is responsible, ascertain how it’s happening, and then take appropriate disciplinary action that aligns with your company culture, policies and precedent.
Moving past this incident is the next step: Institute procedures and supply/equipment audits, and make sure you provide guidance and direction on how and when supplies are to be made available. And please don’t move forward assuming that every employee is dishonest. Don’t punish all for the actions of a few.
Partner, Kean Miller
Ironically, depending on employer reaction, suspected employee theft can expose employers to risks. Louisiana is an at-will employment state. So in theory, an employer does not have to prove suspected employee theft and can terminate an employee for even incorrect suspicions of theft, provided there is no unlawful motive. However, if the employer’s belief is in fact incorrect, and the employee falls in one of the many legally protected classes, the incorrect belief could become a pretext for unlawful discrimination or retaliation and potentially subject the employer to liability under those statutes. Thus, the best practice is for the employer to thoroughly investigate any employee theft allegation before making conclusions or taking any action.
During investigations, employers should be careful about those with whom they share belief of theft, to avoid any defamation concerns. Even after decisions are made and implemented, defamation concerns persist, for example, when responding to prospective employer inquiries regarding accused former employees. There are even some (in my opinion, wrong) cases where an employer was liable for defamation or retaliation for going to the authorities.
Employers also should resist the urge to withhold the supposedly stolen amounts from the employee’s final paycheck. Louisiana law permits deductions from pay where an employee is convicted or has pled guilty to theft of employer funds. But most likely, this will not have occurred at the time the employer is terminating the employee for stealing. Assuming the employee will be convicted or plead guilty, or that the district attorney will even press charges, places the employer at risk for a wage claim.
The most basic advice for employers: Don’t let emotions take over, and be thorough and deliberate before taking any action.