November 1996

Workplace Labor Update - Arrest of Former Employee for Theft Leads to $81,000 Judgment – November 1996

4 min

Employers who act hastily to prevent a terminated employee from removing company property from the work place should take note of the recent appeals court decision in Rogers v. Unum Life Insurance Co., 86 F.3d 1152 (4th Cir. 1996). In that case, the federal appeals court with jurisdiction over the mid-Atlantic states, including Virginia and Maryland, upheld an over $81,000 verdict for malicious prosecution in favor of a former employee of Unum Life Insurance Company. The court found that the company was "too aggressive in protecting their interest" by having the former employee arrested after he removed some property from his office.

Donald Rogers had been lawfully fired by his supervisor, Charles Rose. At the time of the discharge,Rose instructed Rogers to meet him at the office on the following day to turn in his keys and company credit card. Rogers, however, decided to go to the office that evening to retrieve his personal belongings. Upon arriving at the building, Rogers discovered that his key would not open the office door. Unbeknownst to Rogers, Rose had had the locks changed to prevent him from entering the building. Rogers was let into the building by cleaning personnel and proceeded to remove all of his personal items from his office. The next day, Rose learned that Rogers had entered the building and cleaned out his office despite the lock change. Rose apparently believed that Rogers had taken some company property as well, including a refrigerator, an easel, a projector, and some files, and instructed another employee to call the police and report the "theft." There was, however, substantial doubt as to whether Rogers had stolen the items. Rose was aware that the company's easel and projector might have been legally in Rogers' possession and that the refrigerator might have actually been his personal property.

Based upon Rose's assertion that Rogers had stolen the items, a police officer informed Rose of the options available to him, including having Rogers arrested for felony theft. After briefly consulting with the company's in-house counsel, Rose told the police officer to proceed with any action necessary to have Rogers charged with the felonies. The police then issued an arrest warrant for burglary, grand larceny and trespass. The prosecutor dropped the charges of grand larceny and burglary, and the court later dismissed the trespass charge.

Rogers decided to sue his former employer and supervisor, Rose, for malicious prosecution. The court stated that although employers are often put in the difficult position of having to protect the company's property from theft by former employees, in this instance, the employer and supervisor overstepped the bounds of propriety in seeking a felony arrest of Rogers without first ascertaining the justification for such action. The court ruled that Rose did not have good cause to believe that Rogers had actually stolen the company's property because he ignored the fact that several of the allegedly stolen items were generally in Rogers' possession for use during sales presentations.

In defense of his action, Rose contended that he acted in good faith, relying upon the advice of the company's in-house counsel. Reliance upon the advice of counsel is a complete defense to a malicious prosecution charge in some states. The court, however, rejected this argument stating that Rose had failed to prove that the advice was obtained after full and honest disclosure of all the material facts which he knew, or should have known, or that he in good faith followed his counsel's advice.

Although this case was decided based on Virginia state law, other states, including Maryland have similar laws. Therefore, employers should carefully consider all of the relevant facts involved in missing company property, before the police are involved and a decision is made to have a former employee arrested. Also noted by this decision, is the importance of full and complete disclosure of the facts to counsel. As evidenced by this case, advice from counsel based on incomplete information can be useless if your company is forced defend its actions.