Protecting Your Business From Dangerous Employees

Desperate times make for desperate people. Employee dishonesty has always been an issue: 10% of employees steal from their employers, and employee theft is implicated in one-third of business failures. However, today the threat is greater than ever; unemployment is high, stress is high, and many people feel that they’ve been treated unfairly. Not only is employee dishonesty on the rise, but there is a very real risk of workplace violence from disaffected and terminated workers, as well.

What Are the Threats?

There are five broad categories of threats employers must deal with:

Theft of physical goods and assets or money. Whether it is embezzlement, inventory walking out the back door of your warehouse, or laptops and other high-value equipment being stolen, theft is common.

Theft of time. If you’re paying someone for eight hours, you want eight hours of work—not three hours, plus five hours of personal calls, texts, emails, and surfing the web. Time is money; when dishonest employees steal time,    they are stealing as surely as if they 

embezzled. Theft of time ranges from not working during work hours to falsifying time records.

Theft of information and relationships. Dishonest employees can steal manufacturing and business processes, product ideas, or customers and business. Computers, smart phones, and the Internet make stealing data just a mouse click away.

Theft from others. If an employee steals a customer’s credit card number or identity, or steals from coworkers, the company could find itself liable if negligent hiring or negligent supervision of the employee was involved.

Employee violence. We all have read or heard about it the disgruntled employee who comes to work with a gun and opens fire. According to the Bureau of Labor Statistics’ Census of Fatal Occupational Injuries, there were 564workplace homicides in 2005. While homicide is the most extreme form of workplace violence, assaults (anything from a fist fight to assault with a weapon) are far from uncommon.

Policies That Help to Reduce Risk

Hire smart. The best way to stop dishonest or dangerous employees is to not hire them. While no screening process is perfect, good hiring practices, such as diligently performing background and reference checks, will potentially reduce the number of dangerous and dishonest employees.

If it’s confidential information, treat it as such. Important confidential information should never be distributed to everyone in the company or left sitting in the printer. Clearly mark documents as confidential, and limit distribution to employees who need them.

Have all staff sign confidentiality agreements. Confidentiality agreements put employees on notice that business information is confidential, while creating legally enforceable rights.

Have and enforce computer and Internet usage policies. Email and removable data storage make stealing data easy. Also, employees can create liability for their employers by visiting inappropriate websites or by sending legally actionable (e.g., harassing, defamatory) emails. Computers can also be the greatest time-waster known to mankind. To protect against these threats, make it clear that employees have no privacy expectations in their use of work computers or email, and that their computer usage and files can be examined at your discretion. Then follow through and use your access to monitor employee computer usage.

Defeat employee privacy expectations at work. Make it clear that the office is your space, not employees’ space, and they cannot expect privacy at work. That gives you the right to check desks, cubicles, filing cabinets, and lockers—and should help deter employees from keeping anything on-site they shouldn’t. Be careful that you have solid policies.

Appropriate staff should sign non-solicitation agreements. Management, and any one with customer contact or access to customer lists, should sign agreements that they will not solicit customers or clients (or for that matter, your other staff) when they leave your employment.

Key staff should sign non-compete agreements. Senior management and other key staff should sign agreements that they will not compete with you, at least for a reasonable time, within some reasonable area. Unreasonable agreements may not be enforced; work with employment counsel to draft agreements for maximum enforceability.

Pay attention to your staff. There’s no substitute for managers getting out of their offices and engaging with their staff. If managers talk to staff and check on their work, they have the opportunity to see if an employee is wasting time, is present for the hours indicated on time records, is not where he or she should be, or is acting suspiciously.

Set up good structures. Don’t give the same person check-writing and check-signing authority; require dual signatures for large checks. Avoid concentrating too much power or authority in any one employee or position, particularly in accounting, bookkeeping, purchasing, manufacturing, receiving, or other areas that control money or assets.

Bring in a security consultant. It is important to have an outside expert analyze and assess your risks.