Getting Equipment Back From Ex-employee
April 8, 2013
Notice - I'll be speaking at the RASIA in White Plains, NY on Tuesday, April 9, 2013. Hope to see you there.
Regional Alarm and System Integrators Association
6:00 pm, Buon Amici Italian Restaurant, 238 Central Avenue,White Plains, NY 10606
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Question
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Ken,
Thank you for your daily forum emails, many times they are very helpful. I have a question that maybe yourself or someone else may be able to answer for me.
What are my options for getting equipment back from technicians that have run off with $2,000+ of inventory? Our employment agreements (1099 and w2) state that they must return this inventory to us immediately upon termination, and we also have all of them sign a general personal guarantee. I’m just not sure how to go about collecting this equipment or money from them. We’ve sent several to collections with no results. Can I file a police report? What good would that do? Yours and others input would be very much appreciated.
Please keep me anonymous.
Thank you,
anon
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Answer
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There are a few fairly obvious options but you may find them impermissible or improper. For example, withhold pay seems easy enough, but you better not. It can leave you open to a wage claim. Threatening criminal prosecution is another inappropriate option, though actually reporting the theft to the police or District Attorney is permissible, You can report a crime but you shouldn't use the threat of reporting illegal activity to resolve a civil dispute. Suing the x employee is another appropriate remedy.
Here are a few good ideas that will help avoid this problem. Start with an Employment Contract. It should specify if the employee is going to be issued employer owned equipment and make clear that the equipment, such as a lap top or tools, remain employer property. Put valuations on the items and have the employee agree to those values should the property be lost or not returned upon termination of employment. You can include a provision that authorizes an offset of wages, however you need to determine if a waiver given in advance of earning the wages is valid. You can get authorization for an offset of wages after they are earned and before they are paid. Check with our resident expert Judge Ruth Kraft if in doubt.
Since we have an expert labor and employment attorney in our office, Judge Ruth Kraft, I asked her to respond to the question. Here is her unedited response:
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If you are located in a state that has a "wage theft prevention act", then you are honestly caught between the proverbial rock and hard place. Such laws prohibit employers from taking wage deductions for items such as tools/cellphones/laptops/samples which were not returned at the time of separationfrom employment or for unpaid parking violations incurred while on the job. If your state does not have such a law in effect, then you can attempt a wage deduction but I have to warn you that, if you do and the former employee heads to a lawyer's office, you might find an employment discrimination or wage/hour summons and complaint on your doorstep. While the personal guarantee may not amount to much if the worker doesn't have assets, if he owns a home or has a bank account, then collection proceedings are possible. I definitely will advise you not to go to small claims court. See an attorney who will sue in a court of record for not only the amount due to you but for attorney's fees. The last thing you need is to waste hours in small claims court only to have the case postponed or defaulted with repeated leaves to reopen. We have an excellent collections team of attorneys and paralegals in-house with a well-regarded record of success. If your workers understand that you will sue for collection, report the theft to the police, etc., then this will have a tremendous "chilling" effect the next time a technician thinks about keeping your inventory or tools because they know that you aren't threatening but taking action. Also, if your local prosecutor goes forward with the case and issues an arrest warrant, keep in mind that if your former worker gets pulled over for a moving violation, he will find himself behind bars. This is plenty of incentive to pay up rather than face multiple charges in the criminal arena. $2000 worth of equipment will put the employee into felony territory so a prosecution is something to be taken seriously.
Let me add that learning how to conduct a termination interview graciously and without rancor can facilitate return of your equipment as well. If you are considering a discharge, conduct inventory prior to doing so in an effort to restrict the value of goods in the hands of workers. If a worker has been the subject of progressive discipline and you sense that termination is in the cards, use rational business strategies to get back as much as possible before you lower the boom.
Chair, Labor and Employment Department
516 747 6700 x 326
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