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    Expert Column: Dealing With Employee Theft

    Investigate, terminate and try not to litigate

    By Michael V. Abcarian , Fisher & Phillips LLC

    While most employers don't enjoy turning to their employees when things go missing or cash register drawers are lighter than expected, the savvy grocery employer will always have a plan in place to address suspected employee theft. In fact, according to the latest National Supermarket Shrink Survey, employees were regrettably responsible for approximately 56 percent of supermarket thefts in 2013.

    In this survey, theft was defined as stealing merchandise, taking cash from registers and/or cashiers providing unauthorized customer discounts. Employers usually have no choice but to terminate employees who engage in such dishonest behavior. But grocery employers who don't have an effective plan for dealing with such scenarios may end up facing costly litigation.

    Investigate

    An allegation of theft should never be taken lightly. The first step in what might result in job loss — a thorough investigation — is critical. While the employer may not actually bear a burden of proving employee "guilt" beyond a reasonable doubt before firing, a jury may be satisfied with little else if a wrongful discharge or defamation claim ends up in court. When an employee gets fired for theft and decides to dispute the issue in a legal forum, the employee's first tactic will ordinarily be to attack the quality of the employer's investigation.

    During theft investigations, employers should:

    • Always include on the investigation team at least one individual who doesn't personally know the suspected employee, thus reducing accusations about personal animosity or favoritism.
    • Follow written protocols down to the letter. Juries demand this and failure to do so can also serve as evidence of pretext or some coverup, making it more difficult for the employer to ultimately win the case.
    • Ensure that all employees who witnessed theft-related events write their own statements without help or interference. Such statements should be in the employees' own words.
    • Allow the employee under investigation to tell his/her story in full, and include it as part of the record. Otherwise, a jury may think the employee was "railroaded." If the employee admits to wrongdoing, ask for a written confession. It's often best to allow him or her to write his or her own statement in a noncoercive environment, so that allegations of intimidation and duress can be reduced or avoided
    • Be thorough and don’t limit the investigation to witnesses, but also include others who might have seen or heard important things.

    To avoid liability during an investigation, employers should not:

    • Hide video monitors in break rooms or any "private" areas. Such action could be illegal under various laws or may "taint" your decision-making.
    • Confine the employee (or restrict his or her right to move about) during an investigatory meeting. Doing so could lead to false-imprisonment claims.
    • Dig through the employee's personal belongings without consent. This could generate invasion-of-privacy claims.

    Because of potential liabilities, employers should consider requiring at the time of hire that employees sign an acknowledgement that they understand they have no privacy rights with items they bring to the work premises, such as purses and other bags; that they may be subject to video surveillance in certain areas, and that they consent to such; and that they are aware that participation in investigations is mandatory, and that refusal may result in termination.

    Finally, employers should notify employees that if they violate policies pertaining to protection of company assets, they may be terminated without any need to find that there was intentional wrongdoing on their part.

    Terminate

    If a theft investigation reveals misconduct and termination of employment is warranted, the termination meeting shouldn’t be the first time an accused employee learns that he or she was suspected of wrongdoing. If the employee is unaware that there was suspicion prior to the meeting, it's best to suspend him or her pending the outcome of the investigation, rather than terminating before all pertinent facts have been uncovered. Many employees won't return for follow-up meetings and thus abandon their jobs when they know they're about to be fired for provable misconduct such as theft. There are far fewer facts to argue when an employee resigns instead of awaiting discharge.

    Regardless, if the evidence points to theft but isn't conclusive, an employee should not be told he or she is being terminated for "theft" or "dishonesty" or even "suspicion of theft." Accusing an individual of a crime (if not actually the case) can itself be unlawful, and require the employer to "prove" that the employee did in fact violate an applicable criminal statute. Using language that focuses on your lack of trust in the employee, i.e., loss of confidence, is much less likely to be unlawful or problematic.

    An employer may also connect a discharge decision to a policy violation, rather than to any crime. In this scenario, the employee may be told that no conclusion was reached as to culpability for any criminal behavior, but that he or she is being terminated because proper store procedures weren't followed. If the employee refuses to confess to suspected theft, it's especially important that employers carefully choose how to characterize the reasons for termination of employment. Employees who refuse to admit guilt in the face of overwhelming evidence may continue to fight the assertion of theft at every opportunity. These are the individuals who are most likely to sue on theories of wrongful discharge.

    Because there's always the chance that employees may sue post-termination, and facts about the investigation and termination may come into question, employers should also have a plan that deals with post-discharge concerns.

    Try Not to Litigate

    Employers should organize and store all investigation records, including e-mails, video footage and any other pertinent materials that may be needed in the future. Nothing should be destroyed.

    Despite proactive measures by grocery employers, it's more than likely that they will unfortunately experience employee theft. If they have a planned course of action for addressing such situations, they'll be better positioned to avoid further loss if the employee takes legal action.

    By Michael V. Abcarian , Fisher & Phillips LLC
    • About Michael V. Abcarian Michael V. Abcarian is the managing partner of the Dallas office of Fisher & Phillips LLP, a national labor and employment law firm. He has extensive experience advising and defending employers in a variety of labor and employment matter, including systemic investigations by the EEOC and class action lawsuits in the federal courts. He can be reached at [email protected]

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