Dealing with Employee Theft: Strategies and Consequences

Hi Sangeeta,

I am working in an IT company as an HR, and I need a suggestion on a matter. One of our employees has stolen the project code from the office via email. Can you please suggest to me what steps can be taken against him? He has been working with us for the last three months.

Thanks,

Sangeeta

9 views but no reply. Seniors, please help. This is my first post. Expecting a good response from members.

Dear,

Please go through the appointment letter and terminate his services accordingly. Also, lodge an FIR with the police for this theft.

Regards,
R.N.Khola
Skylark Associates, Gurgaon (Haryana)
(Labour Law & Legal Consultants)
09810405361

Hi Sangeetha,

First, inquire about him because the same thing happened in my company too. My colleague stole an important file. After we questioned her, we discovered that she stole it because of a small misunderstanding with the team leader. So, first inquire about him and find out the reason.

Regards,
Anand

Hi,

First, find out if the person has really done this. If so, we have to discuss it with him. If he accepts the mistake, terminate him with evidence. He is the person responsible for taking care of the company's confidential information. If he is a good performer, we can warn him. If he is not, let him go. It should not be disclosed; speak with him politely, and make sure you have all the evidence with you.

We can seek clarification from other companies (only hard coding), but he should not disclose the project's complete code.

Thanks,
Riya

Dear Riya,

Greetings!

To my knowledge, even though he is a good performer, we can't take him back in any company. As per the IT policy, he violated the rules. It's better to terminate him rather than to get feedback from him and consider him for future projects. This is my suggestion.

Hi Sangeeta,

This is a case of theft, which can be seen in manufacturing and retail industries.

1. Please go through your company policies, in which remedies or treatments for such cases would be mentioned.
(or)
2. Observe his appointment letter, which may mention the required actions.
3. Lodge a police complaint against the action (which I suggest as a last resort), but I am sure it can be effective. Ensure you have some proof.
4. Do not entertain rejoining or continuing employment for such employees, as it might encourage a regular practice.

Please let me know if any corrections are needed.

Regards,
Kamal

Dear Sangeeta,

We have a concept, "The Relation Documents" in HR. The list in this includes: 1. Offer letter 2. Appointment letter 3. NDA & NCA, and the list goes on, which establishes a relationship between the company and the employee.

For this situation, I request you to review the Appointment letter and NDA.

The Non-disclosure agreement shall specify the request and reason for disclosing "any information about the company," in which data and information are also included.

The Appointment letter must outline the disciplinary action:

In connection with your employment and during the term of your employment, you shall disclose and assign to "XYZ COMPANY" as its exclusive property all developments, designs, photographs, concepts, pictures, etc., developed or conceived by you solely or jointly with others and shall comply with the policies of the Company in relation to Intellectual Property.

Violation of this clause may result in disciplinary action according to the company rules, which could lead to immediate termination from the company's roles.

This statement is crucial.

Please review your company documents to determine the appropriate course of action.

Regards, Shiv

Hello,

You should adhere to the rules and regulations of the organization and discuss the matter with your seniors. If necessary, terminate the employee. Remember, if you do not terminate the employee, next time another employee may repeat the same act.

Hi A2Z, I have some queries on your posting.

1. How did you come to know about the data theft from the office?
2. Who is the person who informed you about that?

Your action: Set up a group or committee comprising a technical lead or project manager from other teams, an HR representative, and some executives from business, infrastructure, and network teams. The purpose of the group is to conduct a series of interviews (like interrogations) with the person involved. The network or infrastructure team may have applications that can provide details of what has been sent through emails, so obtain those details. The technical lead needs to analyze the criticality of the data, its implications, and so on. The business executive should provide all necessary approvals or additional authority from a business perspective.
If you gather all the necessary details, then yes, you should terminate the person and provide a written notification stating the reasons for the termination. It should be made clear that such actions should not be repeated. However, before taking this step, ensure you have strong evidence to support your decision.

First, investigate and appoint a team to work on this. If you gather sufficient evidence on this, hand it over to the police so that other employees can learn a lesson from this. Please also review your company policy.

Best Regards,
Sajid Ansari - Delhi

Guys, I agree with your different opinions. However, can we also suggest Sangeeta to approach the matter in a more positive manner? Let's consider understanding the psycho-social orientation of the candidate. If you have behavioral trainers with backgrounds in Psychology and Social work, then your job is done. They are equipped with special techniques to address various urgent issues and problems. Misconducts and malpractices are common, but that does not imply that the treatment for such cases will have a single solution (such as termination and involving the police). Different problems require different approaches.

Let's avoid promoting a message of threat (termination) as the sole solution. We should be wise enough to recognize the changing needs and evolving roles of HR practices. Seek the support of your seniors. Communicate with the individual without being harsh, demonstrate diplomacy, and provide clarification. Share with them the pros and cons of their mistake. If necessary, verbally warn them and guide them towards a path of growth and development within the company.

Let's opt for a path of developmental practices and career building.

Dear Sangeeta,

I am from a retail background. I would suggest you first sit with the employee, question him, and try to find out if he has done this. If yes, then take a written confession letter from him mentioning the whole modus operandi, and simultaneously lodge an FIR with the police, and then terminate him/her.

Regards,
Kunal

Whatever his performance is, there is no question about keeping him on board. Values like integrity should not be diluted at any cost within the organization.

Before terminating him, investigate and have proper evidence in place. It is better to take his confession in writing and terminate him as per the Code of Conduct of the company. You can also terminate him based on the evidence gathered if it establishes his fault in an inquiry.

What does your company policy say? If your policy states that no information should be taken out of the company, then I think, irrespective of how critical the resource is, termination is a must. It not only sets the rule straight but also sets an example for other employees as well.

Thanks, Srikanth

Dear Sangeeta,

Being in the IT industry, stealing code is a major misconduct. First, you have to gather the proof for the incident, i.e., a written complaint from his department. Based on that, you can issue him a charge sheet and let him give an explanation. If he agrees, then you can take necessary disciplinary action accordingly, and if he doesn't, then a domestic enquiry can be conducted, and appropriate disciplinary actions can be taken accordingly.

Thanks,
Rajesh Gautam

Conduct an impartial inquiry and try to arrive at conclusions. Then establish strong proof against him, and if proven guilty, terminate his services for theft, as it is a major misconduct. Do not issue an experience certificate if asked for.

Hello,

Is this too late? I guess you should have already called him for a discussion and issued an on-the-spot termination based on the breach of policies and trust.

Please file a case against this "employee" - because others should not dare to think about trying it ever!

Hi All,

The thing that is bothering my mind is that nobody seems to be clear about the objectivity of the whole exercise.

If a problem has occurred, then the same has to be rectified; that is the operational part.

On the ethical part, an organization collectively is always above an individual at any given time. Let this message be conveyed boldly to one and all.

Asha, I beg to differ with you on the issue of delay for the reason that whatever comes out during the discussion will be helpful in strengthening reasoned termination. Secondly, whatever admission the employee gives in writing could be used for termination purposes and also for criminal prosecution. Thirdly, may I add that the organization should take proactive steps to alienate this black sheep from the industry professionally by circulating the details of the person and modus operandi to similarly situated organizations, which will be a bar in times to come. Lastly, the real test of the organization will be in diligent pursuit of the criminal case (my personal experience is that more than anything, a jail term, whether during investigation, judicial custody, or sentence part, is the best deterrence in these circumstances).

Dear All Members,

I would like to highlight a point here: if the organization is very harsh towards the employees, it can cause damage to the organization's reputation in the market. Prior to any action, it would be advisable to counsel the individual and then proceed with a decision in line with company policy.

One more question: How should the relieving and experience letter be structured in this case?

Regards,
Shiv

Dear Sangeeta,

Please terminate that employee immediately for acting against the confidentiality and code of conduct of the company. You can use this for future reference, whatever your company norms say, but this is universal (confidentiality, code of conduct). Anyone who avoids these will be fired immediately. Don't bother about any other reaction from his side.

Regards,
Mahavir Singh

I think you need to talk with him and then you can judge whether he has stolen something or not. If he is guilty, then immediately terminate him with proper evidence and attach his appointment/ rules and regulations' copy as well (to prove that the person is well aware of all confidentiality policies) because he might file a case against you. In this case, evidence is important.

Sign a confidentiality agreement with every employee.

Aniket Nilekar
Asst. Mgr. HR

Dear All,

Many have suggested simply calling him and terminating his employment, but that may not be sufficient. It would be more effective to confront him directly and impose a strict penalty, such as emotional blackmail from the workers. This way, he will feel so humiliated that he will likely warn others against similar actions. Additionally, it is crucial to change the code; otherwise, there is a risk of it being leaked by anyone.

Thank you.

Hi! Since I have just started my career as an HR Consultant, my suggestions won't be based on experience. My advice would be to investigate properly, speak to the person who has made the mistake, assess the situation, and then consult with your seniors. This approach will help ensure that the final decision is impressive.

A Different Point of View

First of all, stealing company info is not very uncommon. It's just a matter of who gets caught and who doesn't. There are far too many ways of stealing; it depends on how smart and tech-savvy the employee is. In this case, the employee was not that smart, that's why he got caught! (It's like cheating in exams; we all know it's wrong, but we all know it is practiced.)

Please take termination/disciplinary action against him and set an example. But I personally feel that no police complaint must be done, please. What will you get from ruining the person's career? Sometimes the impact of such harsh behavior on an individual can be very strong - depression, suicidal tendencies, etc. It may be punishment for the entire family.

Just do what's in the interest of the company.

Dear Shikha,

There is no point in getting subjective in your professional life as you have to see the bigger picture always. The point I am trying to make here is that either we tend to act as the situation arises, or if a set policy or process is in place, then no matter what happens, nobody is above it, and we have to move accordingly. If ruining one person's career results in the fulfillment of the large policy goals of an organization in perpetuity, then in my personal view, there should not be any second thought about it. If you are admitting that stealing company information is not uncommon and has become the norm, then by one strong instance, this norm could be changed, and one must go for it.

Thank you.

Hi,

You may refer to the Industrial Employment Standing Orders Act and Industrial Disputes Act for redressal of such problems. Further, you should have concrete evidence of the involvement of the employee.

Regards,

Hi Sangeetha,

All our friends shared their viewpoints. I also agree that action should be initiated on indiscipline with no mercy on fraud. But what is the preventive action? How can you arrest such happenings?

If not required, disconnect the internet connectivity or choose one system and ask all employees to access the internet through that particular system. It's better to restrict copying by disabling the drives. Access should only be from a specific system that will be under scan. Call for a meeting, communicate with all employees about the incident, tighten your policies, obtain each employee's signature on the confidentiality agreement papers, and file them in their respective personal files. I believe all these processes should be in practice, if not, please implement.

Regards,
Kameswarao

Dear Sangeeta,

Do you have any policy in your organization for the same? Because in my company, we have a policy where we have mentioned that such cases can result in termination of employment. For such cases, I would like to say, "Prevention is better than correction." So, first of all, implement security levels in your organization (this is the job of the system administrator or network administrator) and as an HR, make some policies like an Email Policy, Technical Resources Use Policy, etc.

Now, in this case, it's your management's decision what action they want to take against him.

Himani

This mainly relates to a breach of confidentiality agreement.

Look out for the relevant clauses of the confidentiality agreement if he has entered into during the employment. First, counsel and try to make him not repeat. If he is the kind of person who does not listen to counseling sessions, terminate him with proper backup papers and evidence. Termination should be the last resort; counseling should be the first step.

Hi, I am working in an IT company as an HR. I need a suggestion on a matter. One of our employees has stolen the project code from the office by email. Can you please suggest what steps can be taken against him? He has been working with us for the last three months. Thanks, Sangeeta

I think he is a smart guy who has stolen code from an IT company like yours, who has only been here for the last 3 months. I believe you should redirect his exceptional mind towards some positive projects. Give him a chance to change and utilize him in the right way.

I do agree with Anand; you should also cross-check with him/her about this matter. Maybe someone else might be involved, and take necessary action against them.

Rgds,

Hi Sangeeta!

I think you should refer to your company's HR policy - Employee Misconduct Section and act accordingly. In case you don't have one, then please ensure there is a comprehensive policy in place for the future.

For the present situation, I think you can issue a letter of suspension and charge sheet which contains the details of the misconduct and conduct a proper inquiry into the case with the employee on suspension. If the employee is proven guilty, then fire him/her, and you can also consider taking legal action against the guilty employee to set an example for other employees.

Regards,
Sonia

Dear Sangeeta,

Please conduct a thorough study of the entire case very minutely. Then, discuss with the employee who committed the act and refer to his employment letter and the HR policies and procedures of the company for guidance. Only then can you arrive at a fair and justified verdict.

Regards,
Bhagwan Tolani
+919784539090

Dear Riya,

Stealing is a punishable offense in any case. The first step should be to collect all the evidence against the culprit and then prove the offense. Thereafter, terminate him, mentioning the reason in his termination letter, and lodge an FIR against him as well. This way, no one else will dare to do the same in the future.

With Regards,
Ashfaque.

Find out first whether he had actually done it or not. If yes, he had violated the ethics of the company. I think a person who is not faithful with his work, i.e., through which he earns the bread and butter, i.e., his livelihood, so how can you sustain him for another future mishappenings in the company. Also, find out the reasons as to why he had done it. Thanks.

I miss Dada and his witty comments. :-D

I am a great fan of the DILBERT comic strip by Scott Adams; according to which the best solution could be - "shoot the employee right away and scream - thief! thief!!"

Regards. :-P

Legal Disclaimer - (mail me for the text.)

Dear,

It doesn't matter if he has been with the company for 3 months or 3 years, or whether he is a good performer or a bad performer - terminate him and communicate this message to all existing staff members. This policy applies to everyone, whether they are in a top-level, middle-level, or bottom-level position.

This type of action is necessary for building a good culture and transparency in the company.

Regards,
Devendra Patel

Lodge a complaint under company policies or inform your senior management and inquire about the relevant actions you can take.

Regards,
Shaktiraj S. Ghorpade

Dear Sangeetha,

Here, I would like to make you aware of this kind of issue. First, confirm with your IT/Networking team and check where exactly this code has gone, from whose mail ID, and for how long. Block his/her emails for a certain time and monitor all incoming and outgoing mails.

Meanwhile, please let me know if you have policies like (1) Safety and Security, (2) Internet, Email, and Intranet Policy. Based on this, you can take the necessary action on the concerned employee.

If you are confident that the code has gone from his/her mail ID, call him/her for a discussion along with his manager, as the manager is also equally responsible for this issue. After discussing, terminate him/her with immediate effect. Warn the concerned manager on how to handle a team, and hand over this issue to your Legal team for follow-up.

I do not agree with Miss Riya, as she mentioned that if the concerned employee is good at work, he should be given a chance to improve. Giving a second chance may not guarantee improvement or trust from the manager. Instead of this, terminate the concerned employee to set an example for others to be more cautious in their work to avoid such mistakes in the future.

Suggestion: It's better to inform your IT/Networking team to get software that converts all attachments into ASCII code. This way, you can worry less in the future. Additionally, consider blocking chat facilities and personal emails for internal communications; you can use your web server for this purpose.

Hope this solution works, and all the best. Please revert for any clarification.

I was going through the threads in this forum post and noticed that the HR varies in their point of view on something that is clearly mentioned in the company's policy. Termination after a one-on-one is the only remedy, and it should be set as an example for all others who work in the company. Additionally, it should be communicated to all companies that there is a poaching or non-poaching agreement in place, so that other companies can also save their valuable time in hiring and managing data.

Hi AtoZ,

This is a serious issue and a decision that needs to be taken as early as possible to terminate the concerned employee. Moreover, please refer to your appointment letter to take corrective action. Please check the confidentiality agreement signed by the concerned employee.

Thangavel
Sr. Executive - HR
99943 43043

Hi,

Please check whether you have a Non-Compete or Non-Disclosure Agreement included in the appointment order. If not, first get it signed by all employees. Based on that, you can take action, including addressing any breaches of organization security or IT policy by specific employees.

I recommend withholding all benefits from the person under inquiry until the investigation is complete. Do not provide any exit documents during this period. Document the incident thoroughly and gather proper evidence before taking any further steps.

Regards,
Vijay

If anyone is found violating the company norms, especially those related to company privacy and security policies, they should be subject to legal actions. In addition to terminating such an employee, strict actions are recommended to be taken, considering the severity and impact of those violations.

Hi Sangeeta,

You would probably be interested in drawing some inferences from this incident which may at times lead to policy changes. Therefore, the following course of action is recommended:

(a) Order an inquiry to establish the following:
(i) Motive behind the theft.
(ii) Recruitment process.
(iii) Circumstances under which the theft has taken place.
(iv) Intrusion method used by the employee.

The team leader should not be the inquiry officer.

Fire the employee upon completion of the above.

Take corrective measures to prevent such activity.

Publish the action taken report on all forums.

Seek advice from higher management for reporting to the police.

Take care,
Tunar

Dear Sangeeta,

As per the terms and conditions of the appointment letter, if there is any probation period for him, if yes, then you can take action on him, and he will be terminated from the service. In this case, you can terminate him. My suggestion is to give him one chance or a final warning.

Regards, Mohsin Md

Has he been caught red-handed, or is it simply a suspicion? If caught red-handed or if he has confessed during the initial inquiry by the management, then please ask him to write his confessional statement, apology, and then a resignation letter. If the management wants to proceed further, they can have a case recorded at the local police station under section 381 IPC, i.e., theft by a servant. However, to avoid labor disputes in the future, it is best to ask him to submit his resignation on personal grounds in full and final settlement.

Adil
Kolkata

Dear Riya,

First and foremost, change the password of the project.

Second, keep the employee under suspension pending inquiry and ensure that he does not have access to any of the data, computers, or other software of the company.

Issue strict instructions to others against interacting with him until the inquiry is over.

Ensure that he does not tamper with the proofs/evidence essential for the inquiry.

Initiate the inquiry and ensure that the principles of natural justice are upheld by giving him ample opportunity.

Based on the inquiry findings, you/disciplinary authority should take the decision to terminate his service.

While terminating him, ensure that he will be blacklisted by any future employer he approaches.

Goodbye,
Premson