In the case of employee-theft, the employer has several recourses at its disposal: it may terminate the employee, file a civil suit for theft and/or file a criminal complaint. When opting to file a criminal complaint, however, the employer should already have in its possession a well-maintained employee file that it may review beforehand. Failure to review the well-maintained file, and failure to establish a reasonable belief that the employee stole, may subject the employer to a civil suit filed by the employee for malicious prosecution. So was the case in Dixon v. Kargman, No. A-0441-14T (App. Div. Nov. 6, 2015).
In Dixon, the principal of a trucking company received a telephone call from an unknown individual who alleged that one of the trucking company’s employees had been stealing fuel from a truck. In response, the principal purportedly reviewed the employee’s files. Thereafter, the principal called the police and signed a criminal complaint against the employee for theft. The employee was later arrested. The principal then testified at the grand jury hearing, which resulted in the employee’s indictment for theft. Several years later, however, the employee was acquitted of all charges.
Following his acquittal, the employee filed suit against the trucking company and the principal for malicious prosecution. After a bench trial, the judge awarded $45,935 in damages to the employee, finding that he established a cause of action for malicious prosecution, including “(1) that the criminal action was instituted by the defendant against the plaintiff; (2) that it was actuated by malice; (3) that there was an absence of probable cause for the proceeding; and (4) that it was terminated favorably to the plaintiff.” [i]
The trial judge found that the only issues to resolve were whether the principal acted with malice and whether the principal had probable cause to believe that the employee had stolen the fuel. In answering these issues, the judge found that the file which the principal purportedly reviewed before calling the police did not substantiate the charge. Specifically, the judge found that:
Based on this one unreliable piece of information [the report from the unknown caller], an ordinary cautious person, under these circumstances, would not believe the accused to have committed the offense without an even cursory review of their own paperwork and business records which were easily accessible and that the defendant admittedly maintained on a daily, weekly and /or monthly basis. [ii]
Thus, the trial judge determined that the principal lacked probable cause and, therefore, acted with malice.
The principal and company appealed, arguing that the trial judge erred. The Appellate Division affirmed based largely on the trial judge’s decision.
The Bottom Line. As Dixon demonstrates, employers should obtain independent corroboration sufficient to establish a reasonable belief that an employee has engaged in unlawful conduct. An anonymous telephone call is insufficient corroboration. Thus, after learning that an employee has engaged in unlawful conduct, an employer should carefully review its well-maintained employee file, and make a determination that reasonable belief exists, before taking any adverse action against the employee, such as notifying the police or terminating the employee. With these precautions, the employer may avoid civil liability.