Employee Theft: What Are People Stealing on the Job?

No, it isn’t a headline from The Onion. On the contrary: workplace theft – from stealing merchandise to customer lists to money from the corporate safe – is serious business, exacting significant costs on companies, fellow employees and customers alike.

So what are employees stealing on the job? From lawyers and law firms on JD Supra:

1.Intellectual Property

“It has been said that a company’s intellectual property walks out the door every day when its employees leave the building. The information that is entrusted to a company’s employees is its lifeblood. All too often, however, start-up companies do not do enough to protect their own intellectual property and customer goodwill after their employees leave the company.” (Five Common Employment Law Hazards for Start-Ups by Foley Hoag LLP)

2.Trade Secrets

“The defendant in Nosal was an executive for Korn/Ferry International, an executive search firm. After he left the company, he allegedly engaged three Korn/Ferry employees to help him start a competing business. The government alleged that the three employees obtained trade secrets and other proprietary information by accessing the Korn/Ferry computer system.” (United States v. Nosal: Ninth Circuit Decision Increases Protection Against Employee Computer Data Theft by Morgan Lewis)

3.Wages

“In payroll fraud schemes, an individual fraudulently generates compensation to which he or she is not legally entitled. Payroll schemes are generally initiated by a false claim for payroll with the production of false documentation. In a recent well publicized case, the CFO of a charter school claimed to have worked more than 365 days each year over a several year period, serving as business manager and collecting more than $700,000 in compensation from several institutions for which he claimed to have worked.” (To Minimize Financial Fraud Risk, Watch Out for the ‘Red Flags’ by Duane Morris LLP)

4.Identities

“HR records contain sensitive information, and its protection is of paramount importance. Social Security numbers, birthdates, the identity of family members, health information and other details provide fertile ground for hands-on and cyber identity thieves.” (Safeguarding Employee Records from ID Theft by Laura Hazen)

5.Merchandise

“Employee theft is an issue besetting retailers every day… 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.” (Common Mistakes When Terminating Employees For Theft, Part 1 by Fisher & Phillips LLP)

6.Money

“It is important to understand why your employee’s lifestyle suddenly and dramatically changes. Some of the most important signs to look for are expensive cars and sometimes expensive vacations. It is also important to remember sometimes such changes have nothing to do with embezzlement but to other innocuous and innocent reasons. Hence, before accusing anyone, do your own due diligence first, you might be sued for various reasons, if you are wrong.” (How Could You Avoid Fraud in Your Small Business? by Doron Eghbali)

7.Productivity

“A 2009 survey conducted by Deloitte LLP concludes that 55% of all employees visit social media sites at least once a week. However, only 20% of the employees admit visiting these sites during working hours. Unless a state statute prohibits monitoring work time, there is no other impediment to an employer monitoring how much time employees spend on productive activities or on non-productive activities, such as visiting social media sites.” (Lawyer’s Guide To The Top 13 Social Media Issues by Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger LLP)

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