Despite your best efforts to police your employees and protect customers and business partners, chances are high that you will at some point have to investigate allegations of theft.
You might assume that discharging an employee for a proven theft would involve very little risk of repercussion. The reality is quite the opposite. Because of the seriousness of such an allegation, employees discharged for theft often bring wrongful discharge claims.
The likelihood of a claim increases significantly if authorities are involved and charges against the employee are dismissed. You must exercise special caution and then plan and execute an investigation that is designed to stand up to any later wrongful discharge claims.
Step 1. Put the Appropriate People on the Case.
At least two individuals should be involved and, optimally, one should not be personally acquainted with the subject. This will help avoid claims that the allegation was trumped up against an employee by a hostile or biased investigator.
Step 2. Make Sure the Accused Tells Their Side.
You must allow any employee being investigated to tell their story and include the account in your record of the investigation. Otherwise, a jury may think the employee was railroaded.
Step 3. Follow Your Own Policies.
If your company has a protocol for investigations, it must be followed to the letter. Juries demand that employers follow written procedures. Failure to do so can serve as evidence of “pretext” — a justification for a course of action that is found to be false — and could defeat your efforts at winning the case on written motions rather than going all the way to trial.
Step 4. Make Sure Witnesses Provide Their Own Testimony.
It is important for witnesses to write their statements in their own handwriting and using their own words. Nothing tanks the credibility of a witness faster than when they don’t understand the meaning of words used in “their” written statement when testifying on the stand.
Step 5. Preserve Records and Recordings.
Even if you obtain a written confession of theft, it will be no substitute for a complete investigative file. Your investigator must organize and store all the records of the investigation for future use. Nothing should be destroyed.
If you plan to use business records or recordings that are ordinarily destroyed in accordance with your company’s record retention and destruction protocol, they should be moved from their usual location and preserved.
Just as video footage of an employee pocketing a twenty is strong evidence in a court, not having that video footage is strong evidence for the plaintiff in an employment trial. If the video is missing, no explanation will overcome a jury’s assumption that you did not want them to see the video for some nefarious reason.
Likewise, if an investigator reviews evidence, such as financial reports, stored on a computer, they should create copies of these records to be included in the investigation file.
Finally, you should avoid the following tactics:
- Listening devices: Hiding a baby monitor in the breakroom to try to catch employees talking about stealing is likely illegal under federal anti-wiretapping laws and state privacy statutes.
- Trapping the employee: Do not prevent an employee from leaving an interview and do not block their access to the exit. Doing so could lead to a false imprisonment claim and make it appear a confession was coerced.
- Unauthorized searches: Digging through an employee’s purse or other personal belongings without consent to search could generate an invasion of privacy claim.
- Lie detectors: Using a lie detector during an investigation of monetary loss could open you up to legal claims, given strict federal regulations on the subject.
You can implement strong safeguards to reduce employee theft. Eliminating it entirely is impossible. By following these guidelines when investigating, you can greatly diminish the opportunity for the insult of an expensive lawsuit being added to the injury of theft.
Tim Scott is an attorney in the New Orleans office of Fisher Phillips, where his practice focuses on employment litigation. Contact him at [email protected]