Are Retailers Crossing the Line With Employee Databases?
It’s long been known that much of the theft at retail is an inside job. Employees, whether acting alone or as part of organized retail crime, have cost the industry billions. In fact, based on National Retail Federation (NRF) figures, employees were responsible for 43.9 percent of all missing merchandise in 2011.
To help reduce future losses, retailers have provided information to create databases shared by employers about workers accused of engaging in theft.
While the creation of such databases are perfectly legal and are intended to keep dishonest people out of the retail workforce, there are concerns that insufficient or misleading data may be preventing people who should be getting jobs from getting them.
A New York Times article reported on the case of Keesha Goode, a clerk at Forman Mills in 2008. Ms. Goode said she was dismissed from her job for "not reporting on a former employee who was stealing merchandise, but I did not steal anything myself."
Ms. Goode, who signed an admission statement, said she only did so after being convinced she would go to jail if she didn’t. Ms. Goode was not aware that her name would go into a database that would keep her from getting future jobs in retailing by signing the statement. It was only after being turned down for a job at Dollar General that she learned about her history in a database maintained by LexisNexis.
"We’re not talking about a criminal record, which either is there or is not there — it’s an admission statement which is being provided by an employer," Irv Ackelsberg, a lawyer at Langer, Grogan & Diver who represents Ms. Goode, told the Times.
- Retail Theft Decreased In 2011, According To Preliminary National Retail Security Survey Findings – National Retail Federation
- Staffing Levels Playing Into Retail Crime – RetailWire
- NRF and eBay Team Up to Fight Retail Crime – RetailWire
- RILA and NRF Collaborate to Launch Crime Incident Database – Retail Industry Leaders Association/National Retail Federation
- Retailers Track Employee Thefts in Vast Databases – The New York Times/Yahoo! Finance
Discussion Questions
Should companies be able to identify former employees as thieves if they have not been convicted of a crime? Should retailers be required to explain to employees accused of theft what a signed admission statement will mean for their future job prospects?
How is this possibly legal? Aren’t we, as employers, prohibited from saying anything bad about anybody?
All of the funding used to maintain and/or increase any aspect of employee benefits comes from company profit. The two biggest contributors for low wage increases, reduced bonus monies and reduced benefits are slow sales and theft.
One of the failures in the retail business is the inability to report loses effectively to the employees. Background checks and drug screening measures have positively effected many aspects of employee at work lifestyle. Yet if one were to survey the employee population, very few of the participants would demonstrate an in-depth understanding of the positives these two preventative steps make possible.
Likewise there are few that know or have faith in the ramifications of employee theft. If the company presented the facts in an open, accurate and meaningful format and encouraged open discussions with reliable corporate reply, the recommendations to disclose known offenders would not be seen as an invasion of privacy it would be approved as a protection of assets and investments.
I remain baffled as to why this type of initiative is not in place and maintained in the retail business. Perhaps the employees are correct in their assumption of being a very low priority or asset.
What happened to Ms. Goode is truly unfortunate. The problem that I see with this database, ironically, is human error. While employers may believe an employee has been involved in theft, without proof, which would warrant criminal charges and no need for signed confessions, the database essentially contains “I believe” and “I’m sure of” statements.
The best possible deterrent is employers doing thorough and detailed screening prior to hiring. If more money and time were put into the hiring process, the cost savings should certainly outweigh amount of employee theft.
Companies should absolutely be able to identify former employees as thieves. Justice is not always carried out in a court room. Retailers should not be required to explain to employees who have stolen from them how this will affect their future job prospects.
I know people who have been fired three or four times for theft and then see them getting another job with another retailer. Some were juveniles and their names did not show up on any public database. Retailers should be able to sidetrack the public databases and create their own.
A statement such as Ms. Moore’s quoted in the NY Times article – “picked up socks left them at the checkout and never came back to buy them,” is certainly not an admission of guilt. On the surface the brief quote would indicate just the opposite.
I have no issue with someone who has been convicted of theft being listed in the various databases. However, I can understand why an individual might sign an “admission” statement even if they didn’t actually steal something just to get out of an integration. This is especially true if as would seem in Ms. Moore’s case, her statement doesn’t say she did anything wrong. Certainly as part of the process the accused should be made aware of the consequences of signing an admission.
The retail industry in most cases has no one else to blame for the problem of employee theft but themselves. What is the worst thing that happens to most employees who are caught stealing? They are fired. Than when someone calls to ask for references they will tell them nothing. Looks like all the industry is doing is teaching employees to be better thieves.
As to the database, an accusation without conviction is a basis for a lawsuit. That being said I would not want Keesha Goode working for me! By not reporting a theft, she was aware that she violated all trust with her employer.
I don’t think anyone should have to hire employees that have to be told that theft is bad, illegal and hurts the employer, employee and customers. If Ms Good thinks she has been wronged she can certainly find an attorney that will take her case. My guess is that she doesn’t have a case and is reaping the seeds she has sewn.
As for a retailer having to explain anything to an employee complicit in a theft, I don’t see any obligation on the part of the retailer. The employee gives up their right to privacy when they break trust with their employer.
People make mistakes and people change. It’s hard to find anyone that didn’t steal a candy bar when they were a kid or perhaps even something much bigger. But holding people accountable for all their actions forever is just not human.
This is the fundamental reason why we don’t get decent politicians: everyone’s done something wrong in their past. Let’s remember the golden rule and move on.
Totally agree with Zel here.
The potential for abuse of a national database is staggering.
Just consider this scenario: A manager tries making unwanted sexual advances on an associate. He/she refuses the advances and the manager threatens to “engineer” an excuse to report his or her name to the database unless he or she has a change of heart. For a person looking to a future as a retail worker this could be a powerful threat.
So how do you keep a data base fair, balanced and unimpeachable? I don’t know. I still get emails addressed to the editor of Progressive Grocer.
‘Nuff said.
Is there an accountability factor for this database? Who is responsible for the information verification? Are we again left to the discretion of an anonymous, invisible person? While I agree that perpetual thieves should not be allowed to re enter the retail job force; I am greatly concerned about the rights of the innocent, such as Ms. Goode.
Companies should absolutely not be able to identify former employees as thieves if they have not been convicted.
Legal conviction of a crime should be a requirement, otherwise the system will lend itself to abuse, it happens any time great power is given to an individual in a management position.
I would have to support data bases that track employee dishonesty in the retail sector. However, other sectors need to be included for office workers which cause business considerable losses with the purloining of office supplies along with personal computer usage during working hours. Unfortunately, companies will still offer the big embezzlers to merely resign so the company isn’t embarrassed that it happened during upper management’s watch.
“…the creation of such databases are perfectly legal….” That would seem to be the end of the matter, though admittedly the (implicit) question is whether that should continue to be the case. Yes, a database is capable of errors, omissions and misuse, but that’s true of everything; the resposne is that those who do so are subjest to slander actions. If people want to ban blacklisting outright, then they need to bring forth those tear-jerking stories of true injustice—and lots of them!—not the weak tea the Times poured. (I know we’re not here to discuss the Times article, per se, but if these were the best examples they could come up with, I think they only succeeded in making the case FOR the lists.)
The practice of communicating information about suspect associates to other retailers is alive and well. The occasional innocent may suffer, but it does help keep sliders and thieves from finding new victims/employers. My husband once caught an associate loading a side of beef into his car’s passenger seat…
Any retailer/company is likely going to face the wrath of the legal consequences of doing so at some point. At that point, those that did so will likely face their own issues with employment.
Companies/retailers should be required to disclose how and with whom any information about their employees is used. There should also be notification requirements in place when it occurs. This is not just a requirement that should be in place for a “theft database”, it should be a requirement for any information.
Companies that believe they should be the judge, jury, and executioner in lives like Ms. Goode’s might deserve feeling a little of that themselves.
There is so much wrong with this story. I’m thinking if Ms. Goode had a good lawyer, she might just own that company.
We as retailers know the the court system doesn’t always protect us and rule in our favor. Therefore we need to carry out the justice whether the thief is found guilty or not. Sometimes the charges are reduced. Many employers simply look to see if someone has too many contacts with the court system. Like the person who has 5 wrecks in a year and none of them their fault. Where there’s smoke there is fire and if we see smoke, we start firing..
This article demonstrates how vital our personal information, both good and bad, can impact our entire life. Companies should not have access to any personal information without express consent from that individual. All personal information stored on an individual should be available to that individual, free of charge, upon demand. Individuals should have access to, and be able to edit this information stored in the databases as necessary. Whenever retailers are adding information to a database, all individuals should be fully informed of the impact that the information will have on their personal and professional lives.
The idea is logical on paper and appears to be easily justifiable by reasonable people wishing to stop theft from within their stores. In practice, as others have noted, there are too many chances for errors and misinterpretation to take place and it is often extremely difficult to clear the record thereafter.
I side against such a database. There is an insidious element of judgement baked into to these well-intentioned plans, and people need to be given the benefit of the doubt. The risk of damage to their reputation and impact on their future weighs more than the benefits.