In dealing with workplace disputes, every employer, boss, supervisor, and HR person must ultimately decided how to handle the situation. While employee manuals and policies may suggest or dictate a certain course of action, there's almost always room for discretion. In that event, you must decide how gently or harshly to deal with an employee who you suspect has engaged in some misconduct or illegal activity. Should you be the "nice guy" or the "bad guy"?

Commonsense investigations

In dealing with any type of dispute, whether it involves the investigation of a complaint, disciplinary action, or a discharge, never abandon your common sense or your sense of fair play. Do a thorough investigation of every complaint, making sure that you peak with all parties and witnesses. Anyone who's suspected or accused of some type of misconduct should be notified of the allegation and given fair opportunity to present his side of the story, regardless of the provisions of your employee handbook. That'll go a long way toward preventing wrongful discharge claims and also be of great assistance on defending against them.

When you suspect an employee has engaged in criminal conduct, such as theft, assault, or drug dealing, you should probably contact the local law enforcement authority once you've completed your investigation. Obviously, that decision will depend on factors such as the amount of evidence you've obtained and the risk of adverse publicity to your business if you contact the police.

All too often, employers will decide to give the employee "a break" and simply fire him and leave it at that. That course of action is simple and easy and avoids the involvement of third parties and a prolonged criminal prosecution. But it's very common for an employee who's been fired for theft or other criminal conduct to file a lawsuit after his dismissal. Those lawsuits have been based on claims of wrongful termination, denial of due process, retaliation, and even false imprisonment.

In those cases, the former employee usually denies any criminal conduct ever occurred and argues that the allegations were merely a pretext for an otherwise unlawful firing. In those cases, a criminal complaint to the local police department by the employer likely would have prevented the lawsuit. Regardless of whether an arrest or a conviction was made, you would still have documentation of the incident to use in your defense against the fired employee's claim. Also, a conviction would obviously prevent a lawsuit or make it easily defensible.

Finally, a police investigation would strongly discourage the fired employee from pursuing the matter further. But you should always be sure that you have enough evidence of criminal conduct before contacting the police, or else you could be subjecting yourself to a lawsuit for malicious prosecution.

Some employers prefer to have fired employees sign releases, agreements not to sue, and agreements to make restitution in lieu of filing a criminal compliant. While those are wise steps to protect yourself from future claims, they aren't bulletproof. The fired employees can always deny that they signed the document or could even claim that the document was signed under duress such as the threat of physical violence or false imprisonment. Believe us, those kinds of claims have been made. In those instances, the employer always regrets not contacting the police.

Bottom Line

When you're making personnel decisions, always exercise common sense. Whether it's a complaint of sexual harassment or theft, be sure to do a complete investigation and provide the accused employee with notice of the evidence against him and an opportunity to present his side of the story. When you have clear evidence of criminal conduct, you may want to contact the police – so long as a police investigation or arrest wouldn't adversely affect your business.

Reprinted with permission of publisher. First appeared in Connecticut Employment Law Letter (May 2003). For subscription information, call (800)274-6774.