Employee theft is an issue besetting retailers every day. A 2005 survey by the University of Florida puts the cost at $17.6 billion, and concludes that employee theft accounts for 47% of inventory shrinkage.

Responses to this epidemic range from low tech (like rewards for employees turning in thieves) to high tech (such as computer monitoring of transactions to reveal issues that would normally go undetected by managers). Yet unscrupulous employees remain undeterred and continue to try to beat the system. What is even more upsetting is that catching an employee red-handed on video sliding groceries will not prevent the employee from bringing some form of wrongful termination claim. Many individuals, even guilty ones, feel compelled to try to clear their name. Even though the employer will likely eventually win such a suit, the expense and time involved can cost hundreds of times the amount of the theft.

Employers usually have no choice but to terminate employees who engage in dishonest or even suspicious behavior. But mistakes are sometimes made and you could find yourself not only facing a lawsuit, but finding that your mistakes created potential liability to an individual who stole from your company.

In this issue, we'll look at some common mistakes that have resulted in what should be unassailable terminations going south in court.