Prosecuting Employee Theft

Any theft can be prosecuted.  Not all prosecutions are successful.
Not all guilty verdicts provide restitution. 

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Prosecute, Restitution, Promissory Note, Paycheck or Sue?
What Are Your Options?

The following is not intended to be construed as legal advice but is my opinion based to a reasonable degree of professional certainty.  Always contact an attorney for legal advice.

Prosecution.  Your decision to terminate should be based on established company policy and Labor law.  Prosecution is an option but it does not have to be initiated instantaneously.  In fact, my recommendation, where possible, is to document everything first: create a narrative, gather your evidence, and THEN call the police.  While having an employee taken out of the building in handcuffs is dramatic and may provide a sense of satisfaction, it is not necessarily in your best interests to do so.  Here's why:  The police officer who comes out is only there to perform a very cursory investigation and then be the conduit into the justice system.  While you and the officer may agree you have a prosecutable case, successful prosecution is another thing.  There are other layers involved in the system who may think otherwise and who can "drop" charges filed.  Now you may be faced with some civil liability exposure.  How you approach that decision should be done carefully and with advice from legal counsel.  Keep in mind however, once you start the prosecution process, you can't take it back by dropping charges without a great deal of civil exposure.

What do you get by prosecuting an employee?  Possibly nothing.    The manner in which the court punishes your employee thief is totally in their hands and the truth is you may never hear about the case again. The courts may have your best interests at heart in broad terms but accepting a plea is the most likely arrangement to be made.

Your employee pleads guilty.   They get: a fine or probation depending on several factors.  A trial is rare because the guilty plea satisfied the prosecution. (In over 30 years of employee theft cases I have been to court exactly 2 times.  Both were found guilty any way).  Their guilty plea credited them for jail time they served while waiting to get out on bond.  You get: some or no court ordered restitution. 

Restitution.  Restitution is a voluntary agreement between you and the employee.  If the circumstances permit the employee should return any goods or property they may still have in their possession or that they can reclaim.  I view this as "recovery" of stolen goods and not restitution.  If it is no longer in a usable/saleable condition you could add that property to the restitution you demand.   I recommend that the employee write, in their own hand, a list of stolen items and the value of each and that they want to repay you for them.  If you have the luxury of doing so, create a formal document that states the amount owed and divide that into equal payments over a year's time.  The theft has now become a collection item and you could send them an invoice each month.  The payments are voluntary and your chances of actually receiving all payments are slim.   Once out the door, your former employee's memory will likely fade as to the original agreement.  That is why the next two options may be more effective.

Paycheck.  If an employee wishes to make restitution, they can use their final pay to pay towards that end.  You cannot take their wages involuntarily but the employee can relinquish pending wages, vacation pay, holiday pay, bonus, profit sharing, stocks or any other negotiable tender to pay you for their deeds.  To accomplish this, contact your HR Department or Labor Attorney and draw up a document for the employee to sign specifying how they wish to repay your company.  Once it is authorized by the employee, arrangements should be made through the appropriate method to fulfill the agreement.  A word of caution:  Threatening prosecute unless they make restitution is basically extortion.  Never threaten to prosecute someone if they don't pay you back or if they stop paying you.

Promissory Note.  If their paychecks or other monies cannot fully cover the amount stolen then a Promissory Note may be appropriate.  A Promissory Note is a contract.  Contracts cannot be signed by juveniles so the parents must be the guarantor of the promissory note.  Check with your HR Department, CPA, or attorney to create a proper document.  The promissory note gives you the power to sue the person civilly if they fail to pay.  Frankly, good luck.  The person probably does not have assets that could be awarded to you as payment and besides, what would you do with an old couch anyway?  It's reality.

Civil Restitution.  Many states have statutes that allow merchants to seek civil damages against shoplifters and employee thieves.  These statutes are not limited to only retailers.  These statutes provide little real relief as the monetary awards are generally very small.  If this action is pursued however, and the employee does not meet their obligation, they can be sued in an attempt to have liens on real property.  This too is of little relief unless the employee has attachable assets.  The amount of time (money) invested in this process usually outweighs any benefit gained.  As a side note, this avenue can be pursued even if they are prosecuted because this is a civil matter.

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 employee theft and employee prosecution. 

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