In our last issue (Retail Update, March 2011) we looked at some ideas about how to investigate, catch, and terminate employees who are stealing from the company. In this conclusion, we'll talk about some ways to avoid – or at least lessen the possibility of – getting sued.

Admissions

If an employee admits to the theft, ask for a written confession. As with witness statements, this should be in the employee's own handwriting. Managers should also be taught that the "Law and Order" hot-boxing method of extracting confessions could easily backfire. If the circumstances under which the employee gives the confession can be characterized as coerced, a jury may choose to ignore it. To this end, allow an employee to leave the interview and go to another area where the investigators are not hovering around the document that is being prepared.

If the employee refuses to admit theft even where there is indisputable evidence of guilt, you must choose carefully how to characterize the termination. Employees who refuse to admit guilt in the face of overwhelming evidence will continue to fight the assertion of theft at every opportunity. These are the individuals most likely to sue.

Once you submit "theft" as the reason for termination to an unemployment compensation board, the battle will be on. It may well be a battle worth fighting, but that decision must be made in light of all the potential claims an employee may have, not just the unemployment compensation claims.