What Do You Do When An Employee Steals? (Part 1)

This article is part of the  George Kalmar Business Ethics Series

Dilemma submitted by David Unger
Answered by Rabbi Yosef Rosen

David Unger Asks:

Luckily, over the last 30 years, I have had only a few cases where I have caught an employee who has stolen something. In one case it was a first-class airline ticket to Australia that our magazine had earned in lieu of cash for advertising. In another case it was $300 of an advertising client’s money. What should you do when you catch them? What if they promise it was only once and they will never do it again? What do you do?

Rabbi Rosen Answers:

Short Answer:

In this scenario, you have two competing duties: an obligation to the success of your business and its bottom line, and you have an obligation to judge workers according to the record which they have established as trustworthy employees. Therefore, when there is a question of wrongdoing, you owe it to the worker to judge favorably until evidence or confession demonstrates guilt. Even if the worker is contrite and repentant, you also have an obligation to recover the value of damage to property and the other “soft” losses for your firm. Furthermore, you must diligently protect against recalcitrance. Terminating the employee is often the only way to restore confidence and assuage the reasonable fears of coworkers, business partners, and investors.


Long Answer:

Our Torah is our guide to life and has the moral and spiritual language to reframe this question as one relating to obligations. As Americans, we relate best to our system of law, which is based on rights and privileges guaranteed by legislation and common law. However, the Torah has a limited concept of rights and speaks mainly, instead, of moral and legal obligations. We must analyze the basic scenario which you describe to discern who had which obligations to whom.

An employee understands that he or she has an obligation to not knowingly incur financial loss to his or her employer. There are laws of agency which paid employment generates, which means that a worker must make all reasonable efforts to avoid damaging the institution for which he or she works. Just as robbery and fraud are obvious examples of financial damages described by our Torah, so too is negligence, breach of fiduciary duties, destruction of property, using the photocopier or paperclips for non-work matters, or taking minutes “on the job” to check Facebook or answer personal phone calls.

Modern workplaces provide some reasonable latitude with regard to many of these matters. While workers can make some personal copies, send a few text messages, go out for lunch, or fraternize a little with coworkers about sports, politics, or other non-business matters, employees also understand they have an obligation to adhere to a basic moral or contractual framework, which differs from workplace to workplace. The crass theft of money by an employee which you describe is so reprehensible that there is absolutely no way to excuse it as a matter of workplace culture or as one paperclip too many. The employee knew that he or she was violating an obligation which is basic premise of employment and that termination or criminal prosecution is a basic consequence when caught.

If there’s time, the stolen airline ticket can be cancelled or reissued, and the stolen money deducted from a final paycheck. However, there’s no way to quickly undo the damage done to corporate morale and the confidence of partners or investors. Therefore, the thief’s actual damage to the firm cannot be quantified by the value of the stolen goods alone. The Torah understands that embarrassment, lost business, and an idle or distracted workforce are injuries which have distinct monetary values, even if they are hard to quantify. The offending employee has an outstanding debt in these areas and termination is a kinder outcome for him or her than litigation or criminal charges.

You, too, have obligations. First and foremost, you have an obligation to your investors and business partners to faithfully run your business. Even if the perpetrator swears that he or she will never do it again, you may have to disclose in some detail what happened and assuage the legitimate fears of those with a financial interest in your success. While you appreciate the offender’s personal foibles and unfortunate circumstances which helped precipitate the theft, your business partners do not and mainly care about the bottom line. They have no obligation to indulge second chances and forgiveness, especially when there are the outstanding debts incurred by so many forms of damage. Since the employee has violated his or her obligation to the business and its principals and managers, there are grounds and good reason to terminate the employment.

Secondly, you also have a general obligation, nonetheless, to judge people and their actions in a favorable way. Unless there is an abundance of circumstantial evidence or corroborating proof of wrongdoing, you have a moral obligation to assume the rectitude of people who have otherwise been responsible employees. If the worker is brand new and has no track record for honesty, then his or her unknown moral quantity allows a manager to be less favorable in his or her assumptions of that employee’s virtue. As a corollary, you have an obligation to assume the scrupulousness of a long-time employee with an impeccable record unless there is reasonable evidence of intentional wrongdoing. However, while un-vetted hired or new faces deserve similar solicitude, with them you have no obligation to be so magnanimous about your suspicions.

If there are only rumors or circumstantial indications of wrongdoing, then the ethical calculus begins. If there is potential danger to property, coworkers, partners, or investors, then the Torah permits a manager to act on suspicions. This means the limited ability to speak with others about his suspicions in his capacity as a leader. However, the manager should give a generous evaluation of the worker so long as the evidence allows, especially in light of past merits. Often, an overly forgiving posture invites a problematic worker to establish a stronger pattern of dubious behavior, in which case termination is reasonable in the short term and potentially saves many costs down the road.

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