I Caught My Employee Stealing. What Should I Do?

Employee Theft Discovery00:00

Caller recently caught one of their main employees skimming off the top and stealing from the business. The employee is replaceable but would be a huge operational hit. The theft amount is described as small and not enough to ruin the company. The business is in the process of being sold.

Long-Term Perspective on Honesty01:01

When looking back at age 85, the priority should be having been honest. Knowing about theft and failing to disclose it exposes the seller to liability. Reps and warranties in the sale become flipped once knowledge is demonstrated. The buyer could sue for knowingly transferring an organization with undisclosed liability.

Framing the Disclosure to Buyers01:33

Frame the situation by acknowledging the business involves some nefarious characters while emphasizing profitability. State: the business is slightly more profitable than previously disclosed, the existing price will be honored, and one person must be replaced due to skimming. Be upfront, state the facts, and tell the truth. This approach is unlikely to blow up the sale.

Caller's Prior Actions02:01

The caller already spoke to the employee, reached a middle ground, did not request any money back, and changed processes moving forward. The response is that the employee should be removed because they stole.

Ozark Story Illustration02:30

A Drug Lord discovered accountants skimming. He told a story about Lupita, a beloved grocery store employee caught pocketing a $5 bill. When asked what to do, responses varied from "it's just $5" to situational excuses. The correct answer given was to fire her because it was not the first time she stole, it was the first time she was caught.