If you believe an employee is stealing from your business, it is easy to say that the most effective resolution is termination. In some cases, termination is an easy solution. When it comes to at-will employees, after all, there is a limit to how much financial damage from theft you are willing to accept either financially or emotionally. It is a much bigger problem, however, when you suspect one of your contracted employees of theft. In that case, there are steps that must be taken to confirm your suspicions before anything else can happen.
There are no set methods to handle employee theft
From Bplans.com: “Employee thefts run the gamut from nicking office supplies from the storage room and stealing from coworkers’ lockers to falsely filling out time sheets, mishandling company intellectual property, customer identity theft and worse. Because there’s so much variation in severity of possible workplace theft, there’s almost never a hard and fast rule for how to deal with it when it happens.” [Emphasis added]
The one thing you need in every case is evidence of some type of the theft: surveillance footage, communications made during company time, a paper trail, etc. Gathering evidence can be tedious (like a boring stakeout), but it’s absolutely vital to be able to show that you made an effort. The best way to start is to:
- Document, document, document. Record witnesses, make a copy of security footage, emails, and/or relevant paperwork, and keep a separate file.
- Evaluate the situation and make a decision. If your evidence is cut-and-dried, your path forward may be easier, but handling employee theft is rarely easy, and it is often circumstantial.
- Prevent the possibility that another employee can steal the same way. Review your policies, permissions, and practices. If one person found a loophole, it is inevitable that someone else will find it again unless you close it.
There are ways to protect your business
Regardless of how it happens, employee theft is upsetting. It is a betrayal of trust in you and your business, can jeopardize your business, and damage your reputation. While you can minimize the risk of employee theft by keeping staff honest, insisting on references, performing background checks, and implementing security procedures, you can’t eliminate the possibility that an employee will steal from you.
It can often be hard to assess your business objectively. It’s your business: you built it and your personal touch is in every piece of it. Sometimes, however, a little outside perspective can give you an edge when it comes to protecting yourself and your business.
Alex Gertsburg is a managing partner at Gertsburg Licata. He may be reached at (216) 573-6000 or at [email protected].
Gertsburg Licata is a full-service, strategic growth advisory firm focusing on business transactions and litigation, M&A and executive talent solutions for start-up and middle-market enterprises. It is also the home of CoverMySix®, a unique, anti-litigation audit developed specifically for growing and middle-market companies.
This article is for informational purposes only. It is merely intended to provide a very general overview of a certain area of the law. Nothing in this article is intended to create an attorney-client relationship or provide legal advice. You should not rely on anything in this article without first consulting with an attorney licensed to practice in your jurisdiction. If you have specific questions about your matter, please contact an attorney licensed to practice in your jurisdiction.
