Business Basics 101: Set up systems to handle employee dishonesty

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Oh no! Your worst fears have been realized. You walked into the shop and caught your best employee loading a box of inventory into his personal vehicle. Caught in the act, stealing! What do you do?|ret||ret||tab|

Often theft goes hand-in-hand with drug abuse. In the Ozarks, like everywhere else, drug problems are rampant. Here are a few ideas to help you plan your strategy should you catch someone with his hand in the cookie jar. |ret||ret||tab|

Termination litigation is big business. So, here's the de rigueur disclaimer: When faced with a sensitive employment issue, seek the counsel of a suitable attorney. And, while this is a real story, the names have been changed to protect the innocent. |ret||ret||tab|

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|bold_on|The missing invoices|bold_on||ret||ret||tab|

"Sure, I was ripped off. I speculated that our service manager had a drug problem. He looked bad, and had lost a lot of weight. He seemed fidgety all the time. Then I noticed that there were dispatches on the dispatch log that never resulted in an invoice. I wondered what was happening on those calls. The service technicians turned all their paperwork over to the service manager at the end of the day. I guessed that the manager was pocketing the cash sales and throwing out those invoices.|ret||ret||tab|

"I suspected the service manager of drug use and theft, but I had no proof. We didn't have any systems in place to be certain.|ret||ret||tab|

"First things first, we contacted a drug-screening company and established firm policies on drug use. We tested everyone, and sure enough, the manager tested positive for cocaine.|ret||ret||tab|

"Our drug policy stated that we would provide help and rehabilitation services to employees with drug problems. The manager willingly entered the program. I was pretty proud of our decision to help this guy turn his life around. |ret||ret||tab|

"Then, I confronted him about the missing invoices. He flat out denied any wrongdoing. Again, I beefed up our policies. I worked with the dispatcher to create a system that would match each invoice with the dispatch and the payment. Numbered invoices were issued to each technician. A missing invoice would be charged to the technician for the amount of the repair typical for the dispatch. |ret||ret||tab|

"We never caught the service manager stealing, but the problem of missing invoices disappeared when we put the system in place. Not long after that, the service manager tested positive on a random drug test and we let him go. Interestingly, after he left, several other employees told me that they were glad he was gone. They questioned why I had let him stay on so long in the first place. But, without any proof, I was afraid to fire him! Instead, I chose to wait him out. I put the procedures in place. When he failed the drug test a second time, it was clear-cut case for termination.|ret||ret||tab|

"This whole situation was hard on me and the company. However, we now have policies that will prevent this from happening again. Frankly, I don't think we would have gotten around to creating those policies if we hadn't been pressed into it."|ret||ret||tab|

When creating your drug and alcohol policies, you can choose a no-tolerance position. You may want to terminate immediately any person that tests positive. Or you may want to adopt a "will help rehabilitate" posture. Check out your options.|ret||ret||tab|

Do you need proof to fire someone? It depends. If you operate in an "employment at will" state, you may dismiss an employee for any reason, as long as it is not a discriminatory act. You can tell an employee, "Your services are no longer required. I am letting you go." |ret||ret||tab|

The employee can request a service letter, explaining why you let him go. You are required by law to respond. Unless you have experience with this, seek out a competent lawyer.|ret||ret||tab|

The information in the letter is private, usually delivered via certified mail. Therefore, the contents cannot be deemed defamatory. Do not spout off to all within earshot that the employee ripped you off. Such a public opinion can be deemed slanderous and damaging, and you could face civil action. If you choose to use your rights as an employer in an employment at will state, keep silent.|ret||ret||tab|

If you have an employment contract with an employee, the employment at will protection disappears. For instance, if you have a union contract with an employee, you are bound by the disciplinary procedures in that contract. An employee manual or handbook could be interpreted as a contract. This issue is argued in courts across the country daily. Be aware of this as you create your manuals. |ret||ret||tab|

As evidenced in this story, put systems in place to address drug use and accountability. Write the employee manual. Put in policies for operations. Establish your disciplinary procedure. Follow through accordingly. Don't be afraid. Just be careful. Check with your lawyer for what you should put in and leave out.|ret||ret||tab|

And, rest assured, lying and stealing are legitimate grounds for dismissal. |ret||ret||tab|

|bold_on|(Ellen Rohr, author of "Where Did the Money Go?" and "How Much Should I Charge?" is a small-business consultant.)|ret||ret||tab|

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