What Do You Do When You Discover Your Employee is Cheating on You

You have your own business. You’re the boss. You’re on top of your world. Then suddenly, you notice something weird going on with one of your employees.

He’s acting strange. He doesn’t meet your stare. There are questions about his work. You dig deeper. What is wrong with your employee? Then you find out. Your employee is cheating on you and has committed fraudulent acts against your company (and even your clients!). Your first instinct? Scream blue murder, wring his neck, shake him senseless then throw him to the dungeon (er, I mean jail). Paints a nice picture, doesn’t it? But you’ll have to admit, your own method of taking “revenge” on your thieving, lying fraudster of an employee will not really get anything done. It guarantees satisfaction - yes, but guarantees results? Definitely not.

So what do you then when you discover that your employee is committing fraud against you and your company? There are a lot of options available for you and you can have your pick of them. Listed below are just some of the things that you can do when this thing happens to you:

Breathe Deeply and Relax

First of all, you need to calm down. Get your emotions under control. Stop thinking about how you’ll exact your revenge. Instead, start thinking rationally about your next steps (like not killing your employee). Do you want to get legal help? If yes, get an appointment with a lawyer you can trust. Or do you just want expert advice? Best of all, start thinking this – what is the extent of your employee’s fraud in your business? Then go to the next step.

Dig Deeper

So you have already uncovered his fraudulent activities. But are you sure that is ALL? To reassure yourself, dig deeper into his past months’ activities. Find out how long he has been doing it, who are the clients affected and if anybody else is aware of what he was doing. Go through the papers or documents he handled, his drawer, his table, his computer, your computer system and everything else you can think of that might possibly give a clue to his dealings. Only when you have exhausted all efforts to do so, can you finally say stop and enough and that’s it. BUT say stop only when you are really satisfied with the output of your “investigation” and not because you’re just plain tired or afraid of what you will find out. As the boss (and the owner), you have every right to find out the extent of his (fraudulent) activities. Of course, you can always ask him, your employee, but would you really trust his word now that you what he is capable of doing? Not likely.

Get Legal Help

Or at least consult a lawyer, one you really trust. This doesn’t mean that you are really contemplating filing a legal case against your employee (although this is a better alternative than “revenge”). But you need to know what are your legal rights, what are the documents that you need to gather (as evidences) and how do you go about. If you want to file a legal case against your employee, you need to take this a step at a time. The last thing you want is for your employee to walk away free due to a technicality on the actual case.

Obtain Outside Advice

Know somebody who went through the same thing? Or you think you know of somebody who may have possibly experienced the same thing. Then go to him or her for an advice. Ask this person if he or she has experienced this before and what did he or she do. However, do make sure you really know this person and that he or she will keep the matter confidential. It is always good to get a third-person opinion but one must be careful who one talks to, otherwise, everything can just blow up on your face.

Talk to Your People

Even if you try to keep everything hush-hush, chances are your other employees have a pretty good idea of what is happening in your company. You can opt to talk to them and tell them what is really going on. Tell them the truth about what happened, what you have discovered so far and what are the initial steps you’re taking. Then, get their cooperation by telling them not to discuss anything outside of the company (not even to the clients) because of the sensitive nature of the situation. If your employees are really concerned about your company and you, they will keep mum on the matter.

Be Ready

Lastly, make all the necessary preparations for when you will talk with your erring employee. Follow your lawyer’s advice to the letter. Gather your documents and prepare your thoughts. Prepare all necessary papers and memos. Then prepare yourself. You will eventually (if you haven’t done so already) talk to your employee and you need to be calm and collected when you do so. Just remember, you already know what he was up to and you have the documents to back you up. This, among everything else, is what will keep your confidence up (and your temper under control).

One last note, fraudulent activities are done because of certain weaknesses in the company’s internal controls. You need to find out what these weaknesses are and correct them. Make your corrections fast and announce them when you talk to your people. This way, you head-off any possible repeat of these activities and this gives an assurance to your concerned employees that you are on top of the matter.

Note: This hub is based on a true story of one of my friends. To date, there is still no end in sight to his problem but he and his (ex) employee have already signed an agreement and the latter just made his first payment. Most of what is written above he has already done them. It’s just a matter of him recovering from this setback. Fortunately, his business and his clients were not overly affected.

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Comments 13 comments

dohn121 profile image

dohn121 7 years ago from Hudson Valley, New York

I've never had to fire employee, but I did have to yell at more than a few, as a manager. The firing is usually done by upper-management and I was in middle-management. It's never easy, but take comfort in realizing that handling your employees, i.e. shit-canning them, is all a part of business. Sometimes I wish I could have gone back, get promoted, and fire some people who deserved to be fired! Thanks, ernie :D


emievil profile image

emievil 7 years ago from Philippines Author

Dohn, yup I agree with you. But now that I am the boss, I can't seem to fire anyone because I'm too afraid of getting a labor-related case here =). But this one I have to agree he deserves to be fired (and more).


Lady_E profile image

Lady_E 7 years ago from London, UK

Perfect way to do it, instead of jumping right in. It's best to gather all the evidence so they don't turn the tables on you.

Hope for your peace of mind, it doesn't happen again.


fierycj profile image

fierycj 7 years ago from The Fiery Heart of Africa

One of the main reasons why I'm self-employed, I really have no patience for career sneaking around. Its sickening to me.


emievil profile image

emievil 7 years ago from Philippines Author

100% agree Lady_E. Some of the reactions of our mutual friends include ganging up on that employee, stalking him, etc., etc. They were too emotional, as it was. My friend just told them to calm down because nothing can be achieved if they were hot-headed. So for now, everybody remains calm (don't know how long it will last though).

CJ, I'm beginning to think your course is the best alternative for me. I don't want that very same thing to happen to me =(.


Ultimate Hubber profile image

Ultimate Hubber 7 years ago

Nice step by step procedure and tips. I saw the topic and jumped to your hub, thinking it will be a one-liner and the only line will be "Fire the employee." But its not and its good. A lot to learn for a person like me.


emievil profile image

emievil 7 years ago from Philippines Author

Thanks UH. LOL, "firing the employee" is very tempting, believe me. But it has given the employers a lot of grief because the ex-employee will just sue the employer for dismissal without due process. Better to do it step by step. May be boring but it's safer.


Pcunix profile image

Pcunix 6 years ago from SE MA

yeah. I have been through this myself with an employee who was stealing clients for after hours work and have seen it happen to two customers. It is not pleasant.


emievil profile image

emievil 6 years ago from Philippines Author

Yes, it is not pleasant. Until now my friend is still recovering from what happened. Thanks for visiting my hubs and reading them Pcunix.


Cleaning service 5 years ago

I did just found out that's my ex employee is started the business under almost same name as mine,she worked for me couple of months ,got trained,fing out how is going and.... Contacted cliennts behind my back,offered them her own service,now operating using my reputation,made the business card with the same logo as mine,created the profile on www.yelp.com almost same as mine,ehhhh,how can I stop her? She worked for me for cash,doesn't have tax id( forget about Ss) - she is such a disgusting person,left 2 of her kids in her country and forgot about them,here she already have "boyfriend" and 2 year old son,using Vic,food stamps etc....


Cardisa profile image

Cardisa 4 years ago from Jamaica

I was wondering at what point do you fire the employee, or do you wait until you have investigated them thoroughly. I don't know if I could reign in my temper not to give them a fine thrashing!


emievil profile image

emievil 4 years ago from Philippines Author

Hey Cardisa, it's actually very difficult to fire an employee here. You need lots of memo and warnings and documentations, stuff like that. I think everything's well now. But it certainly made him more wary of his employees :). Thanks for your comment!


tamarawilhite profile image

tamarawilhite 22 months ago from Fort Worth, Texas

What acts fall under the fraud described in this article?

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