Employment & Labor Insider

"I don't get paid enough for this malarkey."

You issue some nice, high-quality equipment to your employee. Top-of-the-line, state-of-the-art computer that the employee can use at home, maybe even a car.

At some point, and for a legitimate reason, you decide that you all need to part ways. So you terminate the employee. And the employee is remote, so you don’t do it in person.

No biggie, right? You can cancel company credit cards without the plastic. Ditto for terminating access to the facility. Your IT department can terminate access to your email and other systems without having the computer.

But it’s hard to get a company car back without actually . . . you know . . . taking possession of the car. Which not only requires physical presence, but also keys and maybe a tow truck.

And even though the computer has been shut off remotely, who knows what the employee has saved on the hard drive?

Standard operating procedure in these situations is usually to inform the employee in writing that company equipment and documents (using that term as broadly as possible) need to be returned.

If the property can be boxed up and shipped, the employer will usually send a self-addressed, pre-paid box to the employee’s home address. The employee can then box everything up and drop it off at the most convenient location of the agreed-upon shipping entity.

In the case of a vehicle, the company will normally make mutually agreeable arrangements to retake possession of the vehicle – for example, by making “a date” to have someone come to the employee’s home and pick it up, or by letting the employee drive the vehicle to the facility with a family member or friend in a separate vehicle. The employee can then turn in the keys, leave the company car in the parking lot, and go home with the family member or friend.

Ninety-nine times out of a hundred this works out fine.

(You know what’s coming next.)

"My precioussssssss!"

What about that one in 100?

If you had a separation agreement, and if the agreement required the return of property, you may be able to delay or stop the severance pay until the property is returned. But if there’s no agreement (and there may be good reasons for not having one), you won’t have that leverage.

Courts are on your side

Two recent court decisions addressed this issue, and in both cases, the employers won.

The first case involved a laptop computer. The employee was terminated effective immediately but received full pay for 90 days afterward. (This was apparently not pursuant to a separation agreement.)

The employee claimed that he was still an “employee” for the full 90-day period and therefore was entitled to keep his laptop for that period. When he failed to return the laptop at the end of the 90 days, the employer had him arrested for felony theft.

A federal judge in Ohio threw out all of the ex-employee’s legal claims, including a retaliation claim based on his arrest. A panel of the U.S. Court of Appeals for the Sixth Circuit agreed, and affirmed.

The second case, from Texas, involved a Mercedes-Benz SUV. (Nice employer!)

The employee asked to leave with a separation package. The employer agreed, but terminated her employment while the package was still being negotiated. It then retained a law firm to make arrangements with the now ex-employee to return the SUV and other company property in her possession.

The law firm made five requests for return of the property, but the ex refused, saying that she would keep it until there was an agreement or a trial.

After she refused the fifth request, the law firm contacted the cops and told them that the ex had stolen company property. The cops went to her house and peacefully repossessed the vehicle.

The ex filed discrimination and harassment claims, and also sued her former employer and the law firm for defamation, malicious prosecution, and intentional infliction of emotional distress related to the accusation of theft and repossession of the vehicle.

Although her employment claims will go to trial, the court granted summary judgment to the employer and its law firm on the claims related to the repo. According to the court, her defamation claim was untimely, she didn't have a valid malicious prosecution claim, and because the defamation claim was dismissed, she couldn’t pursue an intentional infliction claim based on the alleged defamation.

In addition, the claims against the law firm were subject to dismissal because the lawyers had immunity.

Eight steps to getting back what’s yours

"We can do this the hard way, or we can do it the easy way."

Here are eight steps that may help in these situations. When you terminate an employee,

No. 1: Immediately cut off access to the best of your ability. Cancel credit cards and building access, and have IT cut off all access to the company systems. Many employers do this immediately before, or during, the actual termination meeting.

No. 2: Take the bird in the hand if you can. If doing the termination onsite, go ahead and collect all tangible property immediately after the termination meeting, before the employee leaves.

No. 3: If you are offering severance, be sure that the severance agreement says that the employee must return all company property in his or her possession by a specified deadline that occurs before you are obligated to pay any severance.

No. 4: If you are not offering severance, and if the termination is remote, continue with the "self-addressed, pre-paid box" option. If the employee might have difficulty with the required packing and drop-off, try to work out a mutually satisfactory alternate arrangement. For example, you might send an employee whom the ex-employee trusts to assist with the packing and drop-off. (But see No. 5, below.)

No. 5: Protect your employees. If you have to send an employee to the ex-employee’s home, don’t send them without at least one "partner."

If a vehicle has to be repossessed, get a law enforcement officer to accompany your employee and the towing crew.

No. 6: Wage deductions are risky. Many state laws prohibit deductions from wages, even for unreturned company property. If they don’t prohibit it completely, they may impose so many "ifs and buts" that it isn’t worth the legal risk. There may even be problems under the federal Fair Labor Standards Act if the former employee was exempt. Don't try to recoup via wage deductions until you consult with counsel.

No. 7: The Art of the Deal. If the ex-employee really, really wants that laptop (or car, or iPhone, or whatever), you can consider a sale. But in the case of electronic devices, consult with IT beforehand to ensure that any sensitive company information can be, and is, permanently wiped. And in all cases, see No. 6, above. You may have to take payment by Venmo, cash, or check.

No. 8: Sue, or call the cops. If all else fails, file a civil suit to recover the property or its value (my preference), or press criminal charges. This isn’t pleasant, but as long as you have made reasonable efforts to get the property back “amicably,” the courts are likely to back you up.