Troberg Case Study

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For example, owners should be the only ones authorized to sign outgoing checks and receive and review bank statements.

4. If business managers suspect an employee of theft they need to be careful how they approach the situation to avoid a lawsuit. It is management’s responsibility to investigate the situation and follow the business’s written policy regarding theft. If the policy states that theft will not be tolerated and result in termination, than management needs enforce that policy. It is also management’s responsibility to conduct an investigation in accordance with federal and state laws and regulations.

Steps to take if you suspect an employee of theft

1. Ask the employee that is suspected of theft to explain what is going on

2. Hire an investigator (interview employees)

3. Suspend the employee if he or she behaves suspiciously or if there’s credible evidence that the employee has engaged in or supported fraudulent activity

4. Document findings- keep notes and retain records

B. Managers should integrate ethical considerations into their businesses’ internal control. Management is responsible for "setting the tone" for their organization. A positive control environment is the foundation for all other standards. Promoting a positive control environment helps remove temptations for ethical behavior. Management should encourage a control environment that promotes:

• The highest levels of integrity and personal and professional standards

• A leadership philosophy and operating style which promote internal control throughout the organization

• Assignment of authority and responsibility

Management should clarify and communicate that unacceptable behavior will not be tolerated and disciplinary action will be taken if an employee violates ethical standards.

5. The EPPA does not improperly limit retail businesses’ ability to investigate and prosecute incidents of employee theft. There are other ways management can go about investigating and prosecuting an employee suspected of theft.

There are legal constraints that must be observed in investigating employee misconduct. Below are laws and regulations that have potential control implications for retail businesses:

The Fair Credit Reporting Act (“FCRA”) may impose administrative requirements on investigations in the workplace. FCRA generally requires the employer to protect the employee’s privacy and required to provide the employee a summary of the report containing the “nature and substance” of the report.

Employers may request standard consumer credit reports or investigative consumer reports (ICRs) on their employees. The employer must certify to the CRA that it will comply with the FCRA. The employer must also gain the individual’s written consent before obtaining the report.

Searching desks, lockers and offices, accessing email, voicemail and other electronic data, videotaping or otherwise conducting surveillance of employees, whether at work or off the job, raises significant privacy issues. Employees can make legitimate claims that their privacy was violated while at work. The fourth amendment and privacy laws can limit an employer’s ability to investigate and prosecute employees. Employers should have a policy stating that the workplace is subject to searches.

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[ 1 ]. http://epic.org/privacy/fcra/. The Fair Credit Reporting Act (FCRA) and the Privacy of Your Credit Report