Sunday, May 28, 2006

Reel Justice: How Accurate are Courtroom Movies?

We're speaking with attorney and professor Paul Bergman, who is, with Michael Asimow, the co-author of "Reel Justice: The Courtroom Goes to the Movies" (from Andrews McMeel Publishing). "Reel Justice" is a fascinating analysis of hundreds of courtroom movies. It sheds a lot of light on the legal system, the accuracy of courtroom films, and it tells us a lot about how we perceive the law.

NOLO: Paul, let's start with a basic question. Can a film be inaccurate in terms of how the legal system is portrayed, but accurate as to the spirit of justice? That is, the facts are wrong, but the result is correct.

PAUL BERGMAN: Yeah, very definitely, and I'd say that, you know, it probably happens more often than not in films. The best example of that is a film called The Verdict made in the early eighties, with Paul Newman as a kind of boozed-out lawyer named Frank Galvin. He's representing a woman who went into a hospital to give birth, and she ends up comatose, allegedly as the result of being given the wrong anesthetics. The film is a medical malpractice case, on behalf of this woman against the two doctors, the anesthesiologists at the hospital, and Newman hasn't done any work on the case, you know, he's been drunk most of the time, but he finally manages to get the case to go to trial. But his witnesses disappear, the judge excludes most of his other evidence, so there's no way the case should go to the jury. In fact, the name of the film should be, not The Verdict, but The Directed Verdict for the Defense. But nevertheless, the case does go to the jury, and the jury somehow manages to do justice. They realize somehow that the defendants were, you know, did use the wrong anesthetic. And their verdict punishes them, not so much for doing that, but for a reason that really resounds in everyday life. I mean, what happened is, the anesthesiologists tried to cover it up -- they changed documents, they fired a witness, so it was the cover-up rather than the original negligence, that really allows the jurors to want to punish the defendants with their verdict. So they achieve justice, even though there's no real evidence on which to base it, and for a reason that we see happen all the time in ordinary life.

NOLO: Okay, let's try and imagine our legal actor dream team -- Richard Gere, Gene Hackman, Spencer Tracey, Paul Newman... they're all known for their portrayal of lawyers. But what actor really gets it right?

PAUL BERGMAN: I guess I could watch Spencer Tracey as Clarence Daryl in Inherit the Wind probably every week and get inspired; he just does such a great job. But, you know, there's others that are right up there. In an older film called Compulsion, kind of a dramatized version of the Leopold and Logue trial, Clarence Daryl represented Leopold and Logue in that case, and in the film Compulsion, he's played by Orson Wells, and Orson Wells is just magnificent. Another one you'd have to put up there is Gregory Peck as Atticus Finch in To Kill a Mockingbird. He's ultimately not successful, but if you wanted a lawyer to represent you, you couldn't think of one better than him. So I would hire Spencer Tracey, Orson Wells, and Gregory Peck as co-council to represent me, I guess.

NOLO: And if you were an Enron-type corporation looking to hire an evil lawyer, who would you pick?

PAUL BERGMAN: Jon Voight in The Rainmaker or James Mason in The Verdict.
NOLO: One thing you point out in Reel Justice is that women lawyers in movies tend to be portrayed as aggressive, over-emotional, and they make bad romantic decisions. Why is that portrayal so common?

PAUL BERGMAN: You know, I guess it's a great way to create drama, by not only having kind of a who-done-it, and is-the-client-guilty-or-innocent, but to play on stereotypes about women getting emotionally invested in people, and not being just interested in legal analysis, so it's a way to create a triangle... the legal problem, the lawyer, and now some romantic problem that the lawyer has to confront. We see this a lot, actually. In Suspect, Cher plays a public defender who falls in love with one of the jurors on her case. In Jagged Edge, Glen Close plays a supposedly hard-bitten, tough-as-nails lawyer, very experienced, but nevertheless she immediately believes that her client (played by Jeff Bridges) is innocent of the murder that he's charged with, she falls in love with him, and virtually has a hissy fit right in the middle of the trial when some prosecution witness testifies to how he regularly cheated on his wife. So it's kind of just taking advantage, maybe say blending the courtroom drama with the women's weepy drama, that has traditionally been a staple in Hollywood. Actually one of the worst portrayals of female lawyers, not a romantic one, but if you remember Demi Moore's character in A Few Good Men, she is a co-council with Tom Cruise, who plays Lieutenant K now, Demi Moore's character has tons of trial experience, she's straight-military, Tom Cruise has no trial experience... nevertheless by halfway through the film, the Demi Moore character is pretty much reduced to bringing Tom Cruise a cup of coffee; she just totally fades into the background, a pretty demeaning portrait of a female lawyer.

NOLO: You also point out in Reel Justice that in the movies, it's the lawyer who is more charismatic, tricky, or lucky who prevails. You mean that's not the case in real life?

PAUL BERGMAN: I guess more lawyers wish it were. But the great movie that sends that message, by the way, is the recent one Chicago, which kind of has this great scene, in which a courtroom alternates with a circus, to suggest that everything is just another form of entertainment, and the one who's the best entertainer is the one who's going to succeed. Most lawyers prepare hard, they're drowned in paperwork, they're in court on pre-trial notions, there's not a whole lot of trickery or charisma that counts. You kind of have to have "the goods" as they say, and I think more lawyers wish they could just go in and weave a spell-binding tale, and not have to worry about all the hours, weeks, and months of work that precedes what happens in court.

NOLO: In Reel Justice, you explain that movie lawyers often get away with attacking the character of witnesses, when it would not be permitted in real life. Maybe you can give us a couple of examples of that.

PAUL BERGMAN: Yeah, kind of a classic example is Suspect -- you have the defendant who's charged with murder, who has a few missteps on his record, minor transgressions for various kinds of acts involving a little bit of violence, and the prosecutor starts out by cross-examining him by bringing out all of these little acts of violence he's committed in the past, just suggesting that this is a violent guy, just the kind of guy who would commit a murder. Basically sort of a principle of our system of justice, that probably people have heard of, is we say we judge the act and not the actor. So, we try to make judges and jurors focus on, what's the evidence about what happened in this case, let's not turn every trial into a morality trial where we're judging how you've lived your life. So the films are very misleading in that, and Suspect is one of them, Anatomy of a Murder even has a scene where the defense lawyer attacks a prosecution witness by showing a string of misdemeanors and kind of just showing he's a bad guy, so the idea is if you could just disgrace a witness in the eyes of the jury, that they won't believe him. And that kind of thing happens all the time in movies, and in tabloid newspapers or magazines, but it doesn't happen in real cases.

NOLO: One thing you reported in Reel Justice is that in the courtroom genre, in older films, lawyers are portrayed as fine human beings and competent professionals. But in newer movies, from 1980 onwards, they're usually portrayed as greedy, unethical, or incompetent. Can we attribute this to John Grisham, or did Grisham just mine the trend?

PAUL BERGMAN: Yeah, I guess we shouldn't attribute that much power to Grisham. Yeah, I think there's a variety of reasons. I'd go back to Watergate, or "don't trust people in authority," the power elite... I think we also had an era in which people were very much concerned about rising crime rates, and lawyers were often in the media representing drug lords and killers, and people often tend to associate the lawyers with the sometimes nasty people they represent.

NOLO: Let's talk about Legally Blonde for a moment. You're a law professor, so how accurate is the portrayal of law schools and law professors in films?

PAUL BERGMAN: Well, I guess we all wish there were more law students like Reese Witherspoon in law school than we teach. Yeah, I think it's fair to say that it's probably no more accurate about law school than they portray trials. In the films, and there aren't that many that feature law professors, there's the classic Kingsfield and the Paper Chase, and they're always stern, autocratic, cold, all they care about is rational legal analysis, they don't care about their students, and it probably never was true, but it certainly isn't true these days, when professors' advancement depends in part on how their students evaluate them, so even if they didn't want to be, professors have to be at least somewhat caring and interested in their students these days.

NOLO: The new addition of Reel Justice has a feature that's very interesting, it's called "Picturing Justice." Tell us why you added that section, and maybe give us an example.

PAUL BERGMAN: I think the idea at least that I had in mind was to.... well, the book primarily focuses on legal strategies, and we thought it'd be fun to focus on the filmmakers' strategies when making the films, like, what are the ways that they use a visual medium to get their messages across, and by focusing on little film techniques, I think we can help give readers a feel of what film is really all about. There's an old Hitchcock film from the fifties starring Henry Fonda, called The Wrong Man, it's a great film, about a very contemporary problem: eye-witnesses misidentify the person who rob them; Henry Fonda is arrested and thrown in jail, and the film is basically about what a horrible experience it is to be wrongly accused, and it focuses on every little aspect of the process, so it's not a fast-moving film, but by moving so slowly it kind of brings each horror individually to the viewers, and in one little scene where Henry Fonda's character is thrown in jail, we see one of the bars of the cell, and it's filmed in such a way that it goes right across his neck, the shadow falls right across his neck, and it looks like a noose -- very clever, and the suggestion is that he's experienced a kind of death just because he's been thrown in jail for something he had nothing to do with, so it's an example of a film technique kind of helping to promote the message of the film.

NOLO: Paul, we accept the fact that movies are entertainment, and we also accept the fact that the legal system is for real, so is there any danger to the public in creating an inaccurate presentation of the legal system?

PAUL BERGMAN: Yeah, there's a danger that viewers might leave a film mistaken about what a rule of law is, what actually goes on in a trial, I suppose they might be somewhat misleading yeah, but overall, I think the films are a giant plus for our system of justice.
NOLO: Paul, thanks so much for speaking with us today.

PAUL BERGMAN: It was a pleasure, I really enjoyed it and I hope people enjoy the interview, and maybe the book, and certainly the films.

NOLO: Well, I know they'll enjoy the book. It's a fantastic book; it's fun for cinema people, and for people interested in the legal system, and I hope we'll be back soon to interview you for some of your Nolo books, I know there's a new addition of The Criminal Law Handbook that will be coming out soon.

PAUL BERGMAN: Thanks! I look forward to that.

Sunday, May 21, 2006

Should You Use a Prenuptial Agreement?

This week we're speaking with Attorney Katherine E. Stoner, a certified family law specialist, and the co-author, with Shea Irving, of "Prenuptial Agreements: How to Write a Fair and Lasting Contract," from Nolo.

NOLO: Katherine, there are a lot of popular misconceptions about prenuptial agreements, so perhaps we can start out with two basic questions. What is a prenuptial agreement, and how does a couple know when they need one?

KATHERINE STONER: A prenuptial agreement can also be called a premarital agreement; sometimes the archaic Latin term "antenuptial agreement" is used, which means "before the nuptials," or before the wedding. A "prenup" as I will call it, is a contract between two people who are about to marry, that sets out their agreements about finances and property. How do they know if they need it? Well, if they don't want the laws of their state, or a state that they might live in later, to determine what's happening to their property and finances, then they might need a prenup.

NOLO: Okay. According to the tabloids, I read that the reason for the delay in Tom Cruise's marriage to Katie Holmes was that Katie's dad, who is an attorney, has been rangling over the details of the prenup. And one of the rumors that circulated is that her dad secured a $15 million trust fund for her and the baby, regardless of whether the couple marries. And I was under the impression that prenuptial only apply if you marry. So how could that be that there's an arrangement where you would get payment even if you don't marry?

KATHERINE STONER: Good question. Technically, prenups only go into effect if you marry, according to most state laws that I know of. People who don't marry can sign an agreement, a cohabitation agreement, or a property agreement of some sort, even if they're not living together. You could have a combination agreement that was a co-habitation agreement and also qualified as a premarital agreement, or a prenuptial agreement. That may be what they're doing; I don't know the specifics of that particular one. So, it's possible to sign a cohabitation agreement. Technically, the laws that apply to prenuptial or premarital agreements usually provide that it only takes effect when the people marry, and if they don't marry, it doesn't have any effect.

NOLO: Prenuptial agreements... Since same-sex couples are prohibited from marriage, except in Massachusetts, is that correct?


NOLO: Is there any place for the prenuptial agreement for a same-sex couple?

KATHERINE STONER: There is. In Massachusetts, of course, couples are presumably entering premarital agreements, or prenuptial agreements, if that's what they want. In other states that recognize some sort of civil union or domestic partnership, most of those states also permit something like a prenuptial or premarital agreement, and have sort of imported the rules of law that apply to prenups to those agreements. Then there are other states that don't recognize the relationship at all where the same-sex couple would really be entering into what would be called a cohabitation agreement. I think that in just about very state those are now legal, although that's something that has evolved over time. It used to be illegal to even enter into such an agreement.

NOLO: Okay. At Nolo, we're not anti-lawyer, but we try to get people to do things as much as possible on their own. Yet in your book for the prenuptial agreements, you recommend that each party get their own attorney. Tell me a little bit about why a person would need an attorney in a prenuptial negotiation.

KATHERINE STONER: Well, our research shows that there isn't any state that actually requires people to have attorneys. So, theoretically, people could sign a prenup and not have attorneys, and, in fact, I'm sure they do that. We advise it, and it's generally advisable because it really does minimize the risk that if things go sour, or if one of them dies and there's a dispute with the heirs, that somebody's going to attack the agreement as not having been thoughtfully entered into. So, having lawyers on both sides really is kind of an insurance policy for the agreement. So it's very common to attack them and try to say that they won't be enforced if there hasn't been an attorney representing one side or the other or both.

NOLO: Another thing I noticed in looking through the prenuptial book is that you talk about it as an estate-planning tool, almost. So could you just talk a little bit about how a prenuptial agreement can function as an estate-planning tool?

KATHERINE STONER: It's really a compliment to the estate plan. If one spouse, or if either spouse, has separate property, and if they want to have some portion of the estate go to someone other than the surviving spouse, it's a good idea to have a prenup that deals with the statutory rights the surviving spouse would have, just to make sure that you don't end up with an unintended consequence of the estate plan saying one thing, and the surviving spouse having rights that are contradictory to that. Conversely, if both spouses want to protect each other, or if one wants to protect the other, from hostile family members, or even just to prevent misunderstandings when one of them dies, it's a really good idea to have the agreements spelled out in the prenup, so that everybody knows that it's there, that it was something the person who died thought about, and that that's what they wanted.

NOLO: You also recommend including a provision that confirms each person isn't responsible for premarital debts. I understand that principle, but how do you apply that when someone comes after you for your spouse's premarital debt? I mean, you can't just show them the prenuptial and say, "Hey, I'm not responsible," can you?

KATHERINE STONER: Well, actually, you can. In fact most states, I think all states, provide that premarital debts are the responsibility of the person that incurred them. Now, it's true that community property or marital property can sometimes be used to pay off a premarital debt, but if there isn't any community property or marital property, the other spouse can't be sued for the premarital debts of the debtor.

NOLO: You also used a term which was great, I love it, called "Negotiate Lovingly." Since prenups are usually considered as romance killers, can you tell me a little bit about how two people can negotiate lovingly?

KATHERINE STONER: Well, at some points the lovebirds are going to have to talk about money. And psychotherapists actually say that the things that married people argue about most are money, kids, and sex, in that order. So, our view is, why not start early having some constructive conversations about money, about your attitudes towards credit and debt, and people have kind of different ways of viewing money; they might as well find out what the differences are, and find some ways to accommodate those differences at the beginning when they are in love, and when they can talk to each other well, so that's where that term comes from.

NOLO: For prenups, does it matter if you're in a community property state, is there a difference in terms of how you have to structure the agreement? Do you have to think differently?

KATHERINE STONER: Yes, you do. In fact, in every community state you'd have to think differently, and in practically every state, you'd have to think differently. That's why we have kind of an extensive summary of state laws on the CD that goes with the book, because it's a state-by-state thing, and every state has different requirements for what you have to do in order to make the prenup be effective. You know, do you have to have notarization, do you have to have witnesses, and of course, community property is one way of dealing with marital property rights, and other states have other ways if they're not community property states. So you have to know what law applies to your marriage, and kind of write the agreement with that in mind.

NOLO: I read recently that some businesses talked to people who were getting married, some of their employees, and encouraged prenuptial agreements. So, I wanted to talk a little bit about business and prenuptial. How do you manage to keep your business interests so that the business remains with one spouse? How do you prevent the other spouse from peering into your business affairs later? How is that part of the agreement structure?

KATHERINE STONER: The first question is whether you want to do that. For example, you might have one couple where they really do want to be share-and-share-alike. They may be in a community property state where both spouses have a right to know a certain amount about the finances of the marriage, and that might include the right to know some things about the business dealings of one partner. If people don't want that, the prenup is an excellent vehicle for carving out an area of exclusion from that kind of sharing, if that's what they want to do. But it's really an opportunity for the spouses to decide, what is their attitude, what do they want to do? And of course, it's up to them; the business isn't going to be apparted to the contract.

NOLO: You also mention that you can set milestones; prenups sometimes have milestones. If the spouses stay married for five years, for example, a prenup might reward one of the spouses. So, I guess my question might seem naive, but is there any concept that that violates public policy, because you're basically paying one spouse to stay married to the other?

KATHERINE STONER: Well, what the courts say about public policy is that you need to avoid provision in a premarital agreement that gives somebody an obvious incentive to divorce, rather than to stay married. So, a milestone doesn't necessarily do that. For example, what we call a "sunset clause," where you say, the agreement's going to last for five years, and then we're not going to have it anymore, most of the time what that means is that there's going to be more favorable provisions for surviving spouses after the five-year period. Now, you could argue that that might encourage one spouse who stands to benefit from the prenup staying in existence to get divorced, but that doesn't seem to be what really happens, and I haven't ever seen a court set aside a sunset clause like that. The other kind of milestone you're talking about usually is, you get more and more money the longer you're married. Well, that's obviously an incentive to stay married, rather than to get divorced. The public policy example, the one that comes sort of to mind that's really kind of the classic case is one where, if the parties got divorced, the wife was going to end up with more than fifty percent of her husband's separate property. So, what did she do? She got married, and shortly thereafter, she filed for divorce, because she didn't own any of that property as a married person, and it was her husband's separate property to start with, but when she got divorced, she was going to get more than half of it. And the courts said, they struck that down and said, no, that's not a fair agreement. The reason that they entered into that agreement, of course, was because, in the culture that they came from, the husband could divorce his wife, but the wife couldn't divorce her husband. So, you move that whole cultural set to a state that's got no fault with the state, where the wife is free to divorce, and all of a sudden, it doesn't work anymore, and it violates public property.

NOLO: One last thing I want to make sure we mention... Your book is great; it has an agreement on the CD-Rom, and since you recommend or suggest that people talk with an attorney, is the plan for a person using that book to sort of try and work out the agreement themselves and then take it to an attorney?

KATHERINE STONER: Ideally they would talk with each other. Now, they might talk with each other with the help of their lawyers, in like a four-way meeting. In fact, one of the things that's starting to happen more and more is, people are using their lawyers collaboratively, having four-way meetings with the lawyers and both spouses, to really work from the ground up. What we don't recommend is that one person goes to an attorney who drafts an entire agreement without any consultation of the other side. Because then you're just asking for kind of an adversarial sort of reaction to the whole thing, when it comes across.

Sunday, May 7, 2006

What Can You Do About Retail Theft?

Hello. This week, Nolo presents an excerpt from an audio program entitled, "The Book Sellers Little Legal Companion." Although the episode is targeted at bookstore owners, you'll see that the rules we discuss regarding employee theft, shoplifting, armed robbery, and counterfeit currency, apply to the owners of any store or retail establishment.


Although studies of shoplifting show that it is most often a spontaneous decision, some bookstore shoplifting is organized and premeditated. A fictional example of this occurs in "The Adventures of Augie March," by Saul Bellow, in which the main character steals books to sell to students.

But organized shoplifting also happens in real life.
In the late 1990s, the owner of a second-hand bookstore in Northern California ran a shoplifting ring, and gave his associates "pick-lists" -- lists of books that the ringleader could resell at high prices. According to William Patrick Shelly, owner of Book Passages in Corta Madera, California, this guy's pick-list was better than the New York Times' best-seller list. The ring unraveled after one of the members was caught, and agreed to wear a wire, resulting in the bust of the ringleader at his storage facility.

There are an estimated twenty-three million shoplifters, or one in eleven people in the United States. More than ten million people have been caught shoplifting in the last five years. Here are ten things to keep in mind about shoplifting:

1. Never assume that someone making a purchase isn't also stealing. Many shoplifters buy and steal in the same visit.

2. WalMart discovered that having greeters, those friendly employees who meet you at the entrance, reduced shoplifting by as much as 35%. So not only is greeting and making eye contact with people who come in good business, it also deters shoplifting.

3. The typical bookstore shoplifter follows a predictable pattern, commonly wandering from section to section, watching mirrors and the sales staff, stacking books along the way. The most sought-after items by bookstore shoplifters are expensive art and coffee table books.

4. To cut down on shoplifting, keep open sight lines within your store, especially in the areas of expensive or popular books.

5. Don't detain anyone unless a store employee personally observed the theft. That means the employee saw the suspect take the books, conceal them, and then try to leave without paying for them.

6. Laws vary as to the extent of reasonable force you can use to detain a shoplifter, but as a general common sense rule, avoid physical contact, unless required to defend yourself. Physical contact, especially if instigated by bookstore employees, may lead to lawsuits against the bookstore.

7. Avoid detaining a shoplifter by yourself. Always try to do it in pairs, and, if possible, preferably with one bookstore employee who is the same gender as the shoplifter, to avoid an accusation of sexual misconduct.

8. If it's your policy to prosecute shoplifters, be consistent, and post your policy where shoppers can see it. Prosecuting some thieves and letting others go, no matter what your reasons, could get you sued.

9. In many states or counties, a juvenile suspect may be entitled to have a parent or guardian present when being questioned by store personnel. Check with your attorney, local merchants, or the police, to find out the rules in your area.

10. It's not uncommon for thieves to steal from one bookstore and sell to another. If you notice that certain books have disappeared from your store, you may want to alert other bookstores to be on the lookout, and to ask used bookstores if those items have been coming in. It may be a good idea to create a group e-mailing of local bookstores, to keep them informed of disappearing inventory.

Counterfeit Money and Armed Robbery

What about other types of theft? As for counterfeit currency, you can learn how to identify counterfeit bills at the website for advanced counterfeit deterrence, a division of the U.S. Department of the Treasury.

Two tips about counterfeit currency: Keep a magnifying glass by the cash register to better examine bills, and don't play hot potato -- it's a felony to knowingly pass counterfeit currency.
As for the most frightening of all bookstore thefts, armed robbery, most experts agree that the best way to keep yourself and your employees out of harms way is preparation. According to "The Retail Managers Guide to Crime and Loss Prevention," by Liz Martinez (Loose Leaf Law Publishing), the best advice for employees dealing with an armed robbery is to: give the thief what is demanded, don't volunteer any information, and, to the extent that it's possible, try to memorize any distinguishing characteristics of the robber, and note anything the robber touches. Avoid making sudden movements, and if possible, announce any movements before making them. Lock the doors after the thief leaves the store, call the police, and before discussing the robbery with other employees, write down any details of what happened.

Employee Theft

In 2003, the University of Utah bookstore performed a routine internal audit, and determined that $142,000 had disappeared. It had been embezzled by an accounting supervisor at the bookstore, who changed daily receipts, and took the cash. The employee had been stealing from the bookstore for over a year before she was caught, which isn't that unusual. According to the American Society of Employers, typically it takes about eighteen months to catch on to a fraud scheme.

Since over 40% of workers admit to stealing from their employers, we wondered what could be done to prevent and deal with employee theft. We asked Attorney Lisa Guerin, an expert on employment law, and author of "Work Place Investigations," from Nolo. Before becoming an attorney, Lisa worked at book stores in the bay area and New York City.

LISA GUERIN: The best way to deal with book store theft is to prevent it from happening in the first place, of course, and the best place to start is in hiring employees. One mistake a lot of employers make is that they don't check the references that applicants for a job give them.
Beyond hiring, there are also some steps you can take in the way you deal with your books to prevent employee theft, and the most important thing to do is something that financial experts call segregating. And what that means essentially, is not giving any one person too much control over the money or over the books or receipts of your store.
So, for example, a lot of bookstores have one person count out the drawer, they have a second person count the drawer, or they have maybe the manager count the money again and make a deposit, and they have the receipts checked perhaps by a third person.
Another thing you can do to prevent theft is to require authorizations. And, this is essentially just adding more paperwork to the things you require from your employees. So, for example, if you have a petty cash account, you should never let employees just take money out of that account and tell you what they spent it on; you should always require a receipt for money taken out of their. In the same way, if you allow your cashiers to void sales, or to give refunds, some bookstores require a customer signature on those, or they require a manager signature, to make sure that the employee isn't just doing a false void or a false refund and pocketing the money.

Your first step, if you think you have an employee theft problem depends on whether you know who's causing the problem. A lot of times you'll notice just that the deposits have been short, drawers have been short, inventory's disappearing at a faster rate than usual, but you're not sure why. In that situation, your first step is to isolate the problem, and it's very basic process of elimination. You have to determine who has access to the money or to the things that are disappearing, and again, segregation is a great way to figure this out. If you can tell exactly who worked on a particular cash register drawer that was short, or who made the deposit that turned out to be much less than it was supposed to be, then you know who you need to go to first to talk about that problem.

If you already have a sense of who the problem is, then your job is easier. In that case what you want to do is try and get your evidence together. For example, if you're dealing with cash register theft, you'll probably have records. So one thing you can do is compare the sales for that day that were rung up on the register to the money in that drawer, and see if there's a discrepancy there. You should also look at whether your receipts match out to the type of sales that were made. In other words, do you have as much cash as you were supposed to take in in cash, do you have as much in credit card receipts as was logged on the register as a credit card sale. You'll also want to look at any invoices, any paperwork that you require, any authorizations to see if you can find anything there that looks fishy.

When it comes time to actually confront the employee that you believe has been stealing, there's a few things you can do ahead of time. One of them is, experts suggest that if you're dealing with a theft situation, you talk to other employees, and you talk to other people who might have an idea what's going on. In other words, you interview witnesses. You talk to the person who works the cash register next to the person that you think might be stealing. And this will help you sort of gather the information you need to confront this person most effectively, and have the best chance of convincing them to come clean with you.

When it comes to what you say when you're actually sitting across the table from this person, it's a very interpersonal, individual thing. You just sort of have to play it like Colombo and decide what's going to work with this person; is a tougher approaching going to work, is a softer approaching going to work? One thing you definitely want to avoid doing, however, is coming flat out and saying, "You're stealing from my store; I want you out on the street." You don't want to make a flat accusation; certainly not to begin with. But certainly there are a lot of ways to say that between the lines. For example, "Your cash register drawer has been short," "I've noticed that since you've been responsible for making the night deposits, we've had a lot of discrepancies. What can you tell me about that?"

During the interview, you might want to bring out any evidence that you have, or anything that other witnesses told you, like, "Such and such a person said that you don't make the bank deposits some nights, what's up with that?" And if the person feels that you've got them dead to right, then they certainly may confess just to end the discomfort of the situation, you know, if they know that they're already caught.

If the person that you believe has committed theft actually confesses to it during the interview, then your job is pretty simple. Well, your job as an employer is pretty simple; you certainly want to get that person out of your company. You also probably want to get your money back, and that's something that can be a little trickier.

If the person doesn't confess, but you're comfortable that you have the right suspect and this person is in fact the person that's stealing from your company, what you do next will depend a little bit on what your employment policies are. Most employers are at-will employers, which means that they can fire employees at will. They can fire them anytime, without notice; they don't have to have good cause to do it... the only restraints on their ability to fire is that they can't do it for an illegal reason. For example, they can't do it for a discriminatory reason, or they can't do it because the employee has exercised a legal right that's protected. So, if you're an at-will employer, you can certainly just let that employee go, fire them, and that can be the end of it.

If you're not an at-will employer, and the employee has a contract with you, it's a little trickier. You may need to prove, if the employee files a lawsuit claiming wrongful termination, that you had good cause to fire that employee. Most courts, to consider the issue, have held that a reasonable good faith belief that an employee is committing serious misconduct, is good cause to fire, even if it turns out that you later were wrong. As long as you can show that you investigated, you looked into it with good faith, and that you had what appeared to be enough evidence on your side, ultimately you should win that battle in court. Of course, you don't want to end up in court.

When you're actually interviewing the person that you think is stealing from your company, you may want to have another person in the room with you. A good choice if you're the owner of the book store might be your bookkeeper or accountant, who can lay out the objective evidence that you have that point to this person as being the thief. It also might be a good idea to have another person there just to act as a witness, so that you'll have another person who can say what happened, who said what... your extra person can also watch the reactions of the person that you're interviewing, to see how he or she is responding to your questions.

One thing you should do before you start looking into an employee theft problem is, look at your insurance policy, your business insurance policy. Some insurance policies protect against employee theft; in fact some give you the right to be repaid for the amounts that you lose to employee theft. However, these policies also give the insurance company the right to subrogation, and what that means is that the insurance company has the right to go after the person who stole from you, in order to get their money back. If your policy covers theft and it has a right of subrogation clause, you should definitely talk to a lawyer before you investigate, and certainly before you accuse the employee or fire the employee. The reason for that is, if you do anything that gets in the way of the insurance company's right to go after that person, the insurance company might not make good on the policy.