How should employers handle shoplifting incidents?

Lululemon was in the spotlight recently when video surfaced of thieves blatantly taking clothes from the shelves while employees watched helplessly, taking videos with their phones.

The two workers were later fired.

The situation happened in the U.S., but it raises questions for any retail employer when it comes to how to handle the all-to-common challenge of theft — and how employees should respond.

Employee safety comes first

When a person shoplifts from a store, the primary consideration for employers is to make sure that everyone is safe, according to Katie Sweatman, employment law partner at Kingston Reid in Melbourne.

“Best practice for employers is to have safe work practice guidelines set up around what employees should do if there's a theft,” she told HRD Australia. “If they interrupt a shoplifting situation in progress or a theft in progress, what should employees do to make sure they're safe? And always it's going to be the safety of the people that comes first and then the security of the employer’s property comes next after that.”

When it comes to shoplifting, it’s about reducing the risk of harm. And safety regulators look at it as an identifiable area of risk in retail, said Sweatman.

“Because it's a foreseeable risk, then employers need to be proactive in doing whatever is reasonably practicable to try and eliminate that risk, or at least minimise the impact of that risk.”

Retail employers should ensure their employees are trained on the policies and procedures their company has in relation to thefts. There should also be consultation with employees about whether they believe those measures will work.

“And then if there is ever an incident, [it’s about] making sure that there's the support and the followup to make sure they're okay,” she said.

Theft in the United States vs Australia

At the Lululemon store in the United States, the two employees claimed they were fired after calling the police on shoplifters. The company, however, argued that they broke the company’s zero-tolerance policy on following the suspects.

If the situation had happened in Australia, the disciplinary process would have been different, said Sweatman. And one major difference is that Australia doesn’t have the gun culture that they do in the US.

“In America, employees need to be concerned that someone's going to pull out a gun on their staff,” she said. “They've got that much greater elevated risk to manage… it's not impossible in Australia but it's much, much more unlikely.”

What Australians do need to be concerned about are more physical altercations for example getting stabbed or assaulted.

“Policies will always say, ‘Don't try to tackle the person; don't try and stop their exit’ to protect from that perceivable harm,” Sweatman said. “But we wouldn't have the same policies in Australia which say, ‘Don't even call the police’ because I think what that's directed at is making sure that that person doesn't turn around and pull out a gun.”

The second element that comes into play is the lawsuit culture in the US.

“[If] the shoplifter trips over the step on their way out, they can sue the business,” Sweatman said. “Again, it's not impossible in Australia but we certainly don't have that same culture, that same legal culture, so it's not such a risk.”

For Australians, the risk is in making sure the employees are safe and they don’t do anything that can put themselves or customers at risk.

Australia’s legal framework around thefts

Another major point of difference is Australia’s unfair dismissal system. Whatever action an employer takes in Australia would need to be viewed through the lens of the unfair dismissal framework, which doesn’t exist in the US.

“In America, you've got at-will employment,” she said, a process where employers can terminate the employment of an employee at anytime as long as it doesn’t violate any state and federal anti-discrimination laws.

“If that employee was dismissed in Australia and they brought an unfair dismissal claim, the [Fair Work] Commission would look at it through the lens of whether that dismissal is harsh, unjust or unreasonable,” Sweatman said.

If the situation at Lululemon had happened in Australia and all the employees did was call the police – and there was no associated harm – “there's a really real prospect that the Fair Work Commission would look at that and say that outcome is disproportionate to what they did wrong,” she said.

“Yes, they need to follow the procedures… The procedures are there for their safety and to make sure no one gets hurt, but considered in this particular situation, the dismissal I think would probably be viewed as harsh and would be an unfair dismissal in Australia.”

What not to do when it comes to thefts

One scenario which could potentially give rise to a criminal offence for employees is if they were to use “some form of entrapment”, where the perpetrator was locked up in a space and they couldn’t move, Sweatman said.

“That’s where it's always better just to let the person go and get all of the information that they can to help the police — let the police do their job,” she said.

“Employers shouldn't be asking their employees to do the job of the police. The job of employees is to make sure everyone's safe and okay, and to gather as much information that they can to make sure that the police have got what they need to take the next step.”