THE PRIVATE ADJUDICMIGX 8F
DISHONEST EMPLOYEES IR SELEETED RETAIL
ESTABLESHMENTS IN ARLINEETGN EGUKTY. VERGIMA

'3‘-

: f I“ :3 '5 if; S
was»: my me zf-egme at m; ':

MICHIGAN STATE UNIVERSITY
JAMES ANDREW CONSER
l 9 7 4

 

- LIBRAR Y
THEE) . ' MiChigan scam
University r;

——-——v

 

THE PRIVATE ADJUDICATION OF
DISHONEST EMPLOYEES IN SELECTED RETAIL
ESTABLISHMENTS IN ARLINGTON COUNTY, VIRGINIA

By

James Andrew Conser

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirement

for the degree of

MASTER OF SCIENCE

School of Criminal Justice

 

Dr. Leon Weaver A (Chairman)
ijfiéav /(Z[J(€g//

Profizéfior Zolton Ferency éfiMemberY

 

 

Professor Marvin Zalman (Member?

 

Siam-Igg Irate; .

ABSTRACT

THE PRIVATE ADJUDICATION OF
DISHONEST EMPLOYEES IN SELECTED RETAIL
ESTABLISHMENTS IN ARLINGTON COUNTY, VIRGINIA

By

James Andrew Conser

The private disposition of criminal offenses com-
mitted in the course of one's occupation has received
relatively little attention in the field of criminology.

The social phenomenon of private justice is addressed by
this thesis. Private justice is defined as that action
taken against the perpetrator (employee) of a criminal
offense by the victim (employer) in lieu of criminal (public)
prosecution.

The purpose of this study was to analyze, describe,
and define the concept of private justice in the retail
industry in Arlington County, Virginia. This was done by
applying the concept of private justice to the philosophies
of security as enforcement and security as protection.

A review of the literature revealed diversified
approaches to the topic of private justice. Most items
addressed themselves to the question of prosecution and then

only superficially. Only a few items contained an adequate

James Andrew Conser
discussion of the process of private justice.

Structured interviews were conducted in ten selected
firms in Arlington County. Specific attention was given to
the disposition of dishonest employee incidents. The dis-
position of the incidents in light of the firm's View of
punishment shed some light on the use of private justice.

The major findings of this study were expressed in
terms of hypotheses and indicators since the scope of the
thesis was exploratory. Indications were that the majority
of the respondents believed that dismissal was adequate pun-
ishment in dishonest employee incidents. However, most
respondents indicated a desire to prosecute apprehended
employee offenders. Private justice was utilized when more
visible forms of punishment could not be pursued. Therefore,
it was hypothesized for future research that private justice
in retail establishments is utilized primarily as a form of
punishment and that it is used when more visible forms of
punishment cannot be pursued.

The conclusion reached by the author is that private
justice is classifiable; that by classifying a firm's use of
jprivate justice in conjunction with the firm's view on pun-
ishment, one can identify a firm as subscribing to (a) no
jphilosophy of security, (b) a security as protection philos-
CDPhy, or (c) a security as enforcement philosophy.

Many hypotheses for future testing are posed in this
study. They relate to (a) employee morale, (b) the effect of

the polygraph on turnover rates of personnel, (0) the

James Andrew Conser
detection and apprehension techniques utilized by security
agents, (d) the discretionary disposition of cases, (e) the
recidivism of offenders, (f) the consistent application of
disposition procedures, (g) the competency of the security
agent, (h) the issue of the firm's public image, and (i) the
classification of firms according to their philosophical
view of the security function.

A number of recommendations were discussed which
would make private justice less ”private” and more "public."
Diversion of trust violators from the criminal justice
system was suggested as an alternative to prosecution.
Additional research was strongly urged by the author as the
best method of giving retail security policies and procedures

an empirical foundation.

THE PRIVATE ADJUDICATION OF
DISHONEST EMPLOYEES IN SELECTED RETAIL
ESTABLISHMENTS IN ARLINGTON COUNTY, VIRGINIA

By

James Andrew Conser

A THESIS

Submitted to
Michigan State University
in partial fulfillment of the requirement

for the degree of

MASTER OF SCIENCE

School of Criminal Justice

197k

To Linda

and her patience

ii

ACKNOWLEDGMENTS

The author extends his appreciation to the many
individuals that helped to make this study possible. Many of
the persons interviewed were courteous, cooperative, and very
informative. The guidance received from the author's faculty
advisor was extremely beneficial. A sincere "thank you" is
extended to the wife and daughter of the author for the many

sacrifices they made during the life of this thesis.

iii

TABLE OF CONTENTS

LIST OF TABLES . . . . . . . . . . . .

Chapter

1. INTRODUCTION . . . . . . . . . . . . . .
TMEHwMEM .. ... ... ... ...
THE PURPOSE OF THE STUDY
THE SIGNIFICANCE OF THE STUDY
DEFINITIONS . . . . . . . . . . . .
THEORETICAL FRAMEWORK . . . . . . .

2. A REVIEW OF THE LITERATURE
BOOKS . . . . . . . . . . . . . .
PERIODICALS . . . . . . . . . . . . . .
GOVERNMENT PUBLICATIONS . . . . . . .
UNPUBLISHED MATERIAL . . . . . . . . .

3. METHODOLOGY . . . . .
THE SETTING . . . . . . . . . . . . . .
DATA GATHERING TECHNIQUE . . . . . . . .

4. FINDINGS . . . . . . . . . . . . . . . .
FIRM CHARACTERISTICS . . . ’
DISPOSITION OF APPREHENSIONS . . . . . .
THE CONCEPT OF PUNISHMENT . . .

iv

vi

ooome—‘mp-A

15
16
3O
34
38
42
42
44
48
48
51
55

Chapter
THE PROBLEM OF PROSECUTION
MISCELLANEOUS FINDINGS
5. THE CONCEPT OF PRIVATE JUSTICE
THE CONSEQUENCE OF PRIVATE JUSTICE
RECOMMENDATIONS
6. SUMMARY AND CONCLUDING COMMENTS
BIBLIOGRAPHY . . . . . . . . .
APPENDICES

A. INTERVIEW SCHEDULE

B. RELATED STATUTES FROM THE CRIMINAL CODE

OF VIRGINIA

Page

57
61

66
7O
72
78

83

86

89

LIST OF TABLES

Table Page

1. Percentage of Adult and Juvenile Shop-
lifting Cases Prosecuted and Released . . . 31

2. Description of Firms Interviewed by Type
of Goods Sold and Number of Employees . . . 49

3. Disposition of Apprehended Employees by
Firm 0 O O O O O I I O I O O O O O O O O O 52

vi

Chapter 1
INTRODUCTION

In 1972 an official of the Small Business Adminis-
tration stated that the impact of crime in business may run
as high as twenty-five billion dollars annually.1 Pro-
jections of retail losses from employee theft alone range as
high as $5.4 billion for 1975 and $5.6 billion for 1980.2

Figures relating to the impact of crime on business
vary significantly and are dependent upon the source
supplying the data. A dozen different figures could be
quoted here and their accuracy debated for hours.

Even a government study for the year 1967-68
estimated revenue loss via employee theft in all business at
$381 million.3 MOst authorities on the subject, including
the sponsors of the study, agreed that the figure was
grossly underestimated.

The purpose of this study is not to discuss the issue

 

1U.S. Department of Justice, Seminar on Urban Design,
Security and Crime, Proceedings of a National Institute of
Law Enforcement and Criminal Justice, April 12 and 13. 1922
(Washington: Government Printing Office, 1973), p. 61.

2Louis J. Camin, "Some Projections for Business
Security,” Security World, V (February, 1968), 12.

3U.S. Congress, Senate Select Committee on Small
Business, Crime Against Small Business, Document 91-14, 91st
Congress, 1st Sess., April 3, 1969 (Washington: Government
Printing Office, 1969), p. 24.

1

2
of accurate statistics on the impact of crime on business.
It is not to discuss the seriousness of such crime or how to
combat internal security deficiencies. While such issues are
important, the premise of this study is that the problem of
internal theft by employees is real and very costly and need
not be proven.

The problem of internal losses affects every person
in this society. It affects the price of commodities and
the cost of living in general. This, in turn, affects
demands for higher wages and salaries. Business losses are
passed on to the consumer. No one can state what percentage
of inflation is due to such losses, but as prices go up, so
might the employee's perceived need to steal.

The field of retail security addresses the problem
of internal losses. Millions of dollars are spent each year
to prevent, detect, and apprehend offenders. Much is pub-
licized, for example, on the efforts to combat shoplifting.
However, recently many authorities and practitioners in
retail security have admitted that employee dishonesty
accounts for more losses than shoplifting.4 Even the
insurance industry estimates that employee dishonesty has
forced into bankruptcy thirty percent of all the stores

forced out of business for one reason or another, according

4"Sources of Inventory Loss in Your Organization to
Identify, Correct, and Control," Security Letter, II
(December ll, 1972).

3
5

to a recent magazine article.
This study addresses the issue of apprehended dis-
honest employees. The subsequent disposition by the employer
is the target of this research. The details of this study
are explained more fully in the following sections of this

chapter.
THE PROBLEM

The problem under consideration in this study is the
disposition of dishonest employee incidents by the employing
firm. Specifically, it involves the policies, procedures,
and philosophies that selected retail establishments in
Arlington County, Virginia adhere to when an employee is
caught participating in criminal behavior. Particular
attention is given to the concept of "private justice."

For our purposes, private justice is defined as the
action taken against a perpetrator of a criminal offense by
his victim (employer) and in lieu of criminal (public)
prosecution.

Much has been written in the area of retail security
in terms of the mechaniCs of employee theft. Articles on
who steals, how they steal, how to detect theft, and how to
prevent employee dishonesty have been published and widely

acclaimed.

 

5David Steeno, "Loss Prevention in Retail Stores,"
Security World, X (December, 1973), 50.

4

Such articles are most beneficial, of course, but
little has been published concerning what happens giigr an
employee is detected and apprehended. What proportion of
apprehended dishonest employees are taken to police head—
quarters, booked, released on bail, or jailed? If they are
not booked and subsequently prosecuted, what action is
usually taken against them? What are retail establishments'
policies regarding prosecution of dishonest employees?

These and related questions make up the focus of this

inquiry.
THE PURPOSE OF THE STUDY

Past research in the field of retail security has
been often descriptive in nature. Too much emphasis is
often placed on statistics and mechanics of retail security.
.As one security director (who wishes to remain anonymous)
aptly stated during a discussion of retail security, "Why
arer1”t there more studies done on ideas, opinions and philos-
ophies?"

The purpose of this study is to analyze, describe,
and.<iefine the concept of private justice as it exists in
selfiucted firms in the retail industry. The concept is
closely related to various theories of security and to pri-
vaixa security personnel's decision to prosecute employees.

The primary purpose of this study, therefore, becomes
Complex because of the various factors that influence private

Justfixze. Since little research has been conducted on this

5
topic, this study is necessarily exploratory in nature.

Research needs to be conducted into the decisional
processes regarding prosecution in retail security. For
example, what factors influence the decision to prosecute?
Can they be identified? Do certain "key" factors determine
the course of action taken against an emplOyee? What options
besides prosecution are available and utilized by retail
establishments when dishonest employees are detected and
apprehended? Is there too much discretion in this decisional
process? Other problem areas or influences will undoubtedly
be encountered and will be discussed in later chapters.

The study's aim, therefore, is to discover areas in
which further research could lead not only to a greater under-
standing of private justice, but also to a possible coordi-
nation with or incorporation into our public criminal justice
system. It is conceivable that private justice can be
assimilated into our public justice system in the same man-
ner that plea bargaining has been incorporated into our

judicial system.
THE SIGNIFICANCE OF THE STUDY

Any research into the area of retail security and
the process of disposition of employee offenses is timely
and relevant. The decision to prosecute or release is
becoming more complex as the problem of employee dishonesty
increases.

Ideally, this study may shed some light on the

6

problems of prosecuting dishonest employees as well as prin-
cipal guidelines employed in the decisionary process of
whether to prosecute or release.

The scope and definition of the concept of private
justice should be sharpened after completion of this study.
This researcher believes that this concept is presently at
the level of discussion that plea bargaining was two decades
ago. The future of this concept is vital to retail security
and loss prevention theory.

It is also hoped that research topic areas are
revealed by this study. Suggestions regarding possible
research frameworks may benefit other students of retail

security.

DEFINITIONS

The following terms and concepts are used throughout
this study. The reader should familiarize himself with these
definitions for clarity and understanding of the material
that follows.

Associate or employee--synonymous terms in this
thesis; any individual who is on the payroll of the firm.

Criminal offense--any behavior defined by a legisla-
tive body as a prohibited act.

External loss--pilferage by persons not employed by
the firm.

Firm-—a retail outlet of a business establishment.

Internal loss--pilferage by dishonest employees.

7

Pilferage——theft (larceny) of merchandise and/or
cash.

Private justice--the action taken against the per-
petrator of a criminal offense by the victim firm in lieu of
criminal prosecution.

Prosecution--the act of filing and pursuing legal
charges against an employee.

Retail establishment--a business entity structured
to sell merchandise at a profit; a company.

Security--the managerial operation of providing a
pattern of relationships which will protect a firm from
actual and/or potential transgressions and losses.

Security agent--a person or persons having the dele—
gated authority from the management of a firm for the pro-
tection of the firm's assets; a security officer.

Security as enforcement--a philosophy predicated upon
behaviorist psychology which implies control through means of
power and the fear of power. Enforcement of rules and regu-
lations is the basic objective and this enforcement is predi-
cated upon punishment for transgressions (misbehavior).

Security as protection-—a philosophy predicated upon
Gestalt psychology which emphasizes control through under-
standing, persuaSion, and loyalty. Emphasis is on pre-
vention of future dishonesty rather than punishing present
and past transgressions.

Shrinkage--loss in net profit to the firm caused by

internal loss, external loss, and paperwork errors.

THEORETICAL FRAMEWORK

The security function in a retail setting is only
one element of a large managerial enterprise. The enter-
prise is so structured as to achieve a desired result, that
of rendering a profit.

The retail security function is fundamental to a
self-service form of marketing. Its purpose is to prevent
or reduce costly losses of merchandise and cash (iig.,
losses resulting from pilferage, breakage, mishandling, and
external destruction.

The security function is a managerial responsibility.
Any business enterprise must be concerned over the pro-
tection of its assets, personnel, and operating procedures.
Management may delegate some of this responsibility to a
separate department or individual within the organization
(eig,, a security department or security director). Whether
this responsibility be delegated or not, its implementation
must be interdepartmental. In short, every business enter-
prise performs the security function of protection or self-
preservation, be it delegated or assumed by management
itself.

Since the security function exists in every business
enterpriSe, let us discuss the theoretical roles of that
function.

Paul E. Knight and Alan M. Richardson in The Scope

and Limitation of Industrial Security describe two divergent

9
philosophies of the security function. Reference is made in
the "Postscript" of their book (pages 95-100) to the psycho-
logical framework encompassed by the two schools of thought,
security as enforcement and security as protection.

Security as enforcement is deduced from the psy-
chology of behaviorism. According to Knight and Richardson,
behaviorist psychology is concerned with the empirical and
operational world. It deals with events which are
measureable and observable. It reduces these events into
complexes of constants and variables and attempts to corre-
late these events in terms of specific responses elicited
from specific stimuli.

In this framework, social behavior is seen as being
formulated and directed through the encouragement or inhi-
bitions of particular responses to particular stimuli. This
is done by repetitive application of rewards or punishments.

Following this philosophy further, antisocial
behavior is inhibited by sanctions, instructions, and regu-
lations, Injuncthxm;are specific, transgressions deter-
minite. Permissible and impermissible actions are clearly
(distinguished.

The function of the security agent in this aspect is
to provide guidance through proscribing permissible and
impermissible behavior. Prohibitive behavior must be pub-
licized along with the penalties for transgressions. Vio-

lators must be dealt with accordingly. In short, the

10
security function is reduced to that of a policing or
enforcement agency.

Knight and Richardson go on to explain the second
school of thought, that of security as protection. This
view stems from Gestalt psychology. It is described as non-
punitive, preventive, and precautionary. This is achieved
through systematic organization of operating relationships.
Understanding, rather than the fear of power, guides the
security function in maintaining the protection of the
firm's assets. This is control through intelligence as
opposed to the behaviorist's control through power.

Gestalt psychology views a given response as
resulting from a stimulus that is composed of a complex
relationship of conditions or circumstances. It is not an
isolated stimulus, but instead, a totality of situational
elements that combines to form the response. This view,
therefore, relies on the actor's interpretation of the com-
plex situational factors confronting him. The resultant
response is the culmination of beliefs and interpretations
from the complex stimulus. Therefore, the process of main-
taining the desired atmosphere is geared to education, per-
suasion, and understanding. The security agent appeals to
the employees' sense of loyalty, fairness, and appreciation
of the social implications of transgressions against the
specified behavioral guidelines. Maintenance is based on
voluntarism as Opposed to forced compliance through fear of

punishment.

11

From the practical standpoint, security as protection
is fundamentally synonymous to "loss prevention" philosophy.
There is a trend toward greater use of this phrase today.
Some prefer this phrase because it is more descriptive of
their function and procedure, while others employ the phrase
because they like the sound of it. The former is the proper
use of the phrase.

Loss prevention philosophy is advocated by a number
of well-known authorities in the security field. Sargent J.
(Bob) Curtis has recently published two books that subscribe
to a loss prevention (security as protection) philosophy.
Norman Jaspen, a noted management consultant and author has
labeled his philosophy as "preventive management."7

From the Gestalt viewpoint, security is the system
that guides an integrated structure of complex relationships
towards a desired end. Its instructions and proscriptions
are usually explicit. However, transgressions are viewed
more from the "spirit" of the law than the "letter" of the
law. Correctional measures take the form of appealing to
reason instead of automatic punishment. If punishment is

meted out, it is for purposes of education by example.

 

6Sargent J. Curtis, Security Control: Internal
Theft, (New York: Chain Store Age Books, 1973): see also
Sargent J. Curtis, Security Control: External Theft, (New
York: Chain Store Age Books, 1971).

7Norman Jaspen with Hillel Black, The Thief in the
White Collar, (Philadelphia: J.B. Lippincott Company, 1960),

pp. 233-254.

12

As examples, let us use two hypothetical retail firms
employing twenty to thirty persons. The security responsi-
bilities are performed by the managers of each firm. Man-
ager of firm number one subscribes to a hard line philosophy
regarding dishonesty and theft. The employees are aware of
the firm's policy regarding dishonesty. If any employees
are caught pilfering, the manager takes punitive action
against the employee. This action may include a spectrum of
choices from mere dismissal to prosecution. If prosecution
is desired, the authorities are notified, the employee is
arrested and the case is eventually heard in court, assuming
that there is sufficient evidence against the employee.

In firm number two, the manager relies on a dif-
ferent approach. He attempts to gain the loyalty, cooper-
ation, and honesty of his employees through extra orientation
and training when the employee is hired. He also attempts
to continue a sound working relationship through under-
standing and by appealing to the employee's moral obligation.
If losses begin to appear and indications are that a certain
employee is responsible, the manager wants to know about it
inmnediately. He then confronts the employee in an indirect
questioning session. He stresses the point that losses are
occurring in his area of the firm and that they need to be
cnuflziiled before the situation gets worse. When the employee
realizes that the manager is not interested in prosecuting
the«offender, he admits to the dishonesty. The manager

contirnues to question the employee as to how the offense was

13
committed and what reasons or causes precipitated it. The
manager obtains the information he needs and then advises
the employee to go back to work, after agreeing not to com—
mit any other offenses. The manager hopes that he has
deterred any further reoccurrence of dishonesty on the part
of that employee and he has given the employee an opportunity
to regain his self-respect.

These two firms are operational examples of the two
philosophies of security mentioned above. Firm number one
expresses security as enforcement while number two expresses
security as protection.

Careful analysis of the two philosophies on security
reveals that the process of private justice is inherent in
security as protection. Since its basis is not punitive,
there is little expectation of prosecution of dishonest
employees.

On the other hand, security as enforcement implies
a likelihood of prosecution. However, prosecution is only
one option available to the firm that subscribes to security
as enforcement. The other options fall into the realm of
private justice.

Since this thesis is exploratory in nature, the
following questions are the basic objectives of inquiry:
What factors influence the decision on prosecution of dis-
honest employees? Or conversely, what factors influence
private justice? Can factors influencing private justice

reveal the philosophy of the firm's security procedures?

L

i ”(i *‘

 

 

14
In other words, can a firm be identified as subscribing to
one theory of security or the other by classifying its
process of private justice? The answers to these questions
will benefit the formulation of testable hypotheses for

future research.

Chapter 2
A REVIEW OF THE LITERATURE

The concept of private justice is probably as old as
retail marketing itself. The phrase is not in common use,
however, in the literature on the subject. Searching
indexes for the phrase is seldom fruitful.

The concept concerns more than just the non-reporting
of criminal acts. It implies that the victim firm admin-
isters its own justice without involving outside inter—
vention agencies (police, courts, etc.).

Gerald Robin, in his studies of the disposition of
employee thieves, referred to the "private administration of
justice."8 The Rand Corporation's study of the private
police industry in the United States referred to the ”pri-
vate systems of justice" that operate in various commercial
arenas. The Rand study stated:

It is clear that some criminal activities, par-
ticularly pilferage and shoplifting, are often handled
by the employer and never reported to police. Many
security executives and half of the security employees
we surveyed admitted it. If the suspected perpetrator

is an employee, he may be fired and the crime never
reported to the police. If the suspected perpetrator

 

8Gerald D. Robin, "Employees as Offenders: A Socio-
logical Analysis of Occupational Crime,” (unpublished
Doctor's dissertation, University of Pennsylvania, 1965),
cited by Erwin O. Smigel and H. Lawrence Ross, (eds.), Crimes
Against Bureaucracy, (New York: Van Nostrand Reinhold,
1970), pp. 119-142.

15

16
is a customer, the store policy often is to seek res-
titution and warn the suspect. Thus there are several
private systems of justice operating in which crimes
are not reported, nor are suspects confronted with
society's official system of justice. Whether these
private systems create net social benefits or dis-
benefits, they will continue to coexist with the formal
public system of justice. And often there are real and
perceived disincentives for reporting: the high costs
of prosecution, the low probability of a conviction,
and the perceived adverse effects of prosecution on a
company's image.

When one analyzes the above quotation in terms of
the theoretical framework discussed in Chapter 1, many obser-
vations and questions arise. Does the use of private justice
stem from theoretical concepts of retail security or are the
"inconveniences" and perceived ”drawbacks" of public inter-
vention agencies the motivating force? Philosophies of
security, such as security as protection, do not preclude
the use of private justice in the dispostion of internal
theft cases, in fact, it is implied by definition.

These and related issues reveal the need and
importance of further study in the area of private justice.
Some of the literature that relates to the concept of pri-

vate justice is discussed in this chapter.

BOOKS

A book that dealt entirely with the issue of crime
against businesses and organizations was entitled Crimes

Against Bureaucracy. The book contained a number of

 

9James S. Kakalik and Sorrel Wildhorn, Private Police
in_The United States: Findings and Recommendations, (Santa
Monica, California: The Rand Corporation, 1971), p. 60.

17
previously published articles regarding the concept of
bureaucracies (business, corporate, and governmental organi-
zations) as victims of crime. A detailed discussion of the
book here would be quite lengthy. For this reason, selected
portions of the book are summarized below.

The ”Introduction,” written by Erwin O. Smigel dis-
cussed the phenomenon of bureaucracy as a victim of crime in
a psychological and sociological context. Since a bureauc-
racy is characteristically large, impersonal, and dominated
by formal rules and regulations, it lacks the public image
of a personal victim. The low visibility of crimes against
bureaucracies combined with the unpopularity of the victim
(in terms of the public's attitudes toward it) leads to a
failure of the public to stigmatize the perpetrators of these
crimes. A criminal justice system based on the personal vic-
tim concept tends to deny access by a bureaucracy to a neces-
sary source of protection. This creates a dilemma for the
bureaucratic victim because his interest is usually reim-
bursement, not retribution. Prosecution also becomes costly
and time consuming to such victims, which in turn creates a
response of developing their own system of private dispo-
sition.10

Another chapter entitled "Public Attitude Toward

Stealing as Related to the Size of the Victim Organization,"

 

10Erwin O. Smigel and H. Lawrence Ross, (eds.),
Crimes Against Bureaucracy, (New York: Van Nostrand Rein-
hOld. 1975). PP- 2-5-

18

by Erwin O. Smigel, discussed the results of a study of 212
adults in Bloomington, Indiana. The hypothesis tested was
that if obliged to choose, most individuals would prefer to
steal from large-scale and impersonal rather than from small—
scale and personal organizations. The hypothesis was con-
firmed by the results in that the preferred order of stealing
was large business, government, and then small business.11

The most significant chapter of the book, in relation
to this study, was the one entitled "The Corporate and Judi-
cial Disposition of Employee Thieves" by Gerald D. Robin.12
Dr. Robin's data were gathered from three large department
stores and consisted of their records of apprehended
employees over a multi—year period.

The three companies--A, B, and C--apprehended a total
of 1681 employees. Company A prosecuted thirty-four per-
cent: Company B, two percent: and Company C, eight percent.
Company A's basic policy was that criminal behavior would
result in observable punitive consequences extending beyond
dismissal whenever possible. In contrast, Companies B and C
maintained a policy of termination as quickly as possible.
They were more sympathetic and felt that prosecution served
no useful purpose. They wished to avoid further publicity

13

in the matter.

 

11Ibid., pp. 15-21.

 

12Refer to fn. 8.

13Smigel, op. cit., pp. 119-122.

19

Since Company A had such a high rate of prosecution,
Dr. Robin studied that particular department store in depth.
He tabulated the prosecutions according to positions, amount
stolen, sex of the offender, marital status, and age of the
offender. Only the most significant findings are discussed
in the following paragraphs.

With regard to position, no representative con-
clusion could be drawn other than that cleaning personnel
received the highest rate of prosecution while white sales
employees received the lowest. However, when the amount
stolen was controlled in relation to position, it was dis-
covered that lower status employees (cleaners, servicemen,
stock personnel, etc.) were proschted at a higher rate
(73% to 50%) than higher status employees (executives, sales
persons, and white-collar workers). It was concluded that
the offenders with whom the enforcers could more easily
identify were treated more sympathetically.11+

The size of theft in terms of dollar value pilfered
by the employee during his employment emerged as the single
most important and decisive determinant of disposition.
Nineteen percent of those who stole less than one hundred
dollars were prosecuted as compared to fifty-seven percent
of those who stole more than one hundred dollars. The
average amount stolen by prosecuted employees ($608) was

three times as large as that of released offenders ($194).

 

1L‘Ibidn pp. 127-129.

20

With regard to the sex of the offender and when the amount
stolen was held constant, the proportion of males to females
that were prosecuted was sixty—seven percent and forty—
seven percent respectively.15

In the 338 cases in which Company A gave reasons for
not prosecuting, thirteen percent were released because the
amount stolen was considered trivial, six percent were
released upon recommendation by the District Attorney, three
percent were turned over to military and juvenile authori-
ties, two percent were released because of technical legal
problems, seven percent were released because of personal
and/Or family considerations, less than one percent were
released because their dishonesty was self-confessed, nine
percent were released for "other" reasons, and fifty-eight
percent were released because of insufficient evidence to
secure a conviction.16

With regard to disposition of cases prosecuted, 256
of the 259 were convicted. Twelve of these were sentenced
to prison. The number of offenders that pleaded guilty were
249 or ninety-six percent. The most frequently imposed sen-
tence was restitution. Dr. Robin stated that the very
absence of the deterrent which middle class individuals fear
most--imprisonment--and the imposition of monetary fines in
its place, was tantamount to an admission by the court that

it could do little for the offender and that it chose to

 

16

15.1.1919 Ibid., pp. 130-131.

21
do nothing to them.17
Gerald Robin concluded his article with a brief dis-
cussion of the private administration of justice. Emphasis
was placed on the employer's tenuous responsibility in
deciding whether or not to report a known apprehended
offender. Many questions were posed regarding the ethical,
moral, and legal consequence of this dicretionary power.
The purpose of prosecution was discussed in the final para-
graphs and various views on the issue were described. Dr.
Robin's concluding statement was that in disposing of
offenders, consideration of the victim, of the objective of
punishment, and of the power of the employer over trust vio-
lators are not all perfectly integrated but rather are char-
acterized by conflict and ambivalance. Yet such strain
among these parts is perhaps an inevitable, if not wholly
desirable, reflections of our social system.18
Of all the literature reviewed for this study, the
above material was the most relevant and the most encom-
passing. However, other books addressed the disposition
of dishonest employees as a related matter to broader issues.
- Industrial Securitthanagement by Richard J. Healy
and Timothy J. Walsh discussed security administration on a
managerial level. Only a few pages were devoted to dishonest

employee dispositions. The authors stated:

For an employer to act as though his was the only

 

18

17Ibid., pp. 135-137. Ibid., pp. 141-142.

 

22

interest at stake in the theft of his property is as

wrong in terms of overall social good as for a passerby

or witness to street crime to refuse to ”become

involved.” Theft is a crime against all the people and

an economic wrong against the particular victim as well.

Both aspects of the theft problem must be considered.19

The authors also presented four primary reasons why
some firms follow a "no prosecution" policy. The reasons
included corporate image, employee morale, law suits, and
dismissal as enough punishment. All were refuted as legiti-
mate reasons for such a policy. The tone of this section
of the book was primarily "pro prosecution".20
Another book stated that reputable firms often main-

tained a policy of no prosecution for two primary reasons.
Firstly, the firm was concerned about the negative public
image and opinion that might result from the publicity of
the charges. Secondly, the firm was concerned about the
effect of prosecution on the other employees. The author,
however, argued that leniency would be viewed by employees
as a sign of management weakness, resulting in little
deterrence to dishonesty.21

Sargent J. (Bob) Curtis has written several books

and articles on retail security. His Modern Retail Security

 

19Richard J. Healy and Timothy J. Walsh, Industrial

 

Security Management, (U.S.A.: American Management Associ~
ation, Inc., 1971), p. 129.
20

Ibid., p. 130.

21Charles F. Hemphill, Jr., Secugity fgerusiness
and Industry, (Homewood, Illinois: Dow Jones-Irwin, Inc.,
1971). P- 254-

23

published in 1960, became a "classic" in the field. Since
1970 he has published two books which are basically updated
versions of the 1960 publication, although the material is
now separated into external and internal loss categories.22

In 1960, Curtis advocated a fixed policy for dis-
posing of all dishonest employees. Anyone caught stealing
should be immediately dismissed. Failure to be consistent
or failure to take decisive action against dishonest
employees could have an adverse effect on other employees
and could lead to increased dishonesty.23

Curtis maintained that the firm had three dispo-
sition alternatives: dismissal based on admission of theft,
dismissal for violation of store policies, and prosecution.
He again suggested a consistent policy in whatever dispo-
sition alternative was undertaken. This section of Curtis'
book was concluded with the warning that when prosecution
is undertaken, the store risks a lot. There are possi-
bilities of civil suits and loss of community good will.
He suggested that these risks be evaluated at the time of
decision.2u

In another section of the book, prosecution of dis-

honest employees was discussed again:

The prosecution of the dishonest employee requires

 

22Curtis, _p. cit.

23Sargent J. Curtis, Modern Retail Security, (Spring-
field Illinois: Charles C. Thomas, 1960), p. 172.

2”Ibid., P. 280.

24

additional thought by management, because here the pro-
blem involves the store's moral and ethical responsi-
bility in relationship to the individual. Did the store,
because of its poor operation, because of lack of judg-
ment by a supervisor, create the situation which lead to
dishonesty? Was the employee placed in a position of
undue temptation? If you and your store placed an
employee in the position of undue temptation and the
employee stole, then you and the store have a responsi-
bility to that person. It is a moral and ethical
responsibility and one which cannot be set aside.

For example, if you have a teen-age stockboy and put
him into a stockroom where there are a lot of very
desirable things for a teen-age boy, such as expensive
watches, jack knives and lighters, and if you have this
boy work in there four or five hours unsupervised, isn't
this putting him in the position of undue temptation?

If he steals who is responsible? He and his family are
the ones who will carry the scars of disgrace if he is
caught. But who had the responsibility for placing this
boy in such a position of undue temptation? Before you
prosecute any employee ask yourself did our store create
this dishonesty? (Italics supplied.)25

In Curtis' latest book, the philosophy implied above,
managerial responsibility, is the dominating theme. Its
focus is on loss prevention by creating a more cooperative

26

and secure environment within the firm. In this vein, he
is less rigid on prosecution of employees. He again empha-
sizes the concept of undue temptation but he also states
that iii dishonest employees should be discharged. However,
retention of a perceived "valuable" employee under specified

conditions--that the employee seek psychiatric help--is dis-

cussed by Curtis as an exception to the discharge policy.27

 

25Ibid., p. 529.

26Curtis, Security Control: internal Theft, p. 216.

27Ibid., p. 214.

25

The Booster and the Snitch by Mary Owen Cameron pro-
vided some observations regarding the decision to prosecute
apprehended shoplifters.* These observations were made after
analyzing the security operation of a large Chicago depart-
ment store. Because of time consuming court appearances,
store personnel wanted to prosecute as few shoplifters as
possible. However, prosecution was sought in cases where
the shoplifter was believed to be a professional thief.
Also,if the shoplifter showed signs of mental illness, pros-
ecution was initiated. Factors of prior criminal record and
the amount of resistance to apprehension were also considered.
No prosecution, however, would be sought unless evidentiary
requirements for conviction could be met. Another general-
ization made from the data collected was that pilferers
who were apprehended and interrogated by the security agents
of the store, but set free without formal charge, had very

little or no recidivism.28

 

*Although shoplifting is outside the scope of this
study, the problems associated with prosecuting shoplifters
have been addressed by several books, articles, and other
documents. Some are discussed in this chapter for comparison
purposes. Sargent Curtis, for example, enumerates specific
situations in which prosecution should be pursued (see page
26 of this theSis). However, few situations or specific
guidelines have been equally developed for prosecuting dis-
honest employees, either by Curtis or other authorities.
The articles on shoplifting by Roger K. Griffin (pages
are included to indicate that private justice is very evi—
dent from the statistics on the prosecution and release of
shoplifters but that it is not readily discussed in many
articles.

28Mary Owen Cameron, The Booster and the Snitch, (New
York: Free Press of Glencoe, 1964), p. 151.

26

With regard to shoplifters, Sargent Curtis has
enumerated seven situations when prosecution should be pur-
sued:29

1. When the suspect does not admit to the theft or
refuses to sign a confession statement.

2. When a suspect cannot be identified.

3. When a suspect has a previous criminal record.

4. When the suspect injures the person making the
arrest.

5. When the suspect appears to be a vagrant with no
visible means of support.

6. When the suspect's thefts total a large sum of
money.

7. When there is indication that the suspect is a
professional thief.

A prerequisite, of course, for prosecuting shop-
lifters in these situations is that sufficient evidentiary
requirements for a prosecutable case be met.

A booklet entitled The Thief You Pay contained infor-
mative material which was directed toward helping an employer
to establish policies and guidelines in dealing with the
problem of employee dishonesty. The booklet suggested main-
taining a flexible policy since it is impractical to prose—
cute all offenders. It also suggested that the legal

requirements necessary to maintain a conviction be obtained

 

29Curtis, SeCurity Control: External Theft, pp. 110-
112.

27
from the local prosecutor's office. With regard to which
option (prosecution, dismissal, or retention) should be
employed and when, only one conclusion was presented: "Most
security professionals will agree that you should prosecute
the employees who have been stealing systematically for re-

30

sale: these are professional thieves..." Regarding resti-
tution, the booklet explained that private "agreements" on
recovery of stolen goods are not enforceable. The only
enforceable restitution agreement is the court imposed sen—
tence (usually a condition of probation). Under private
agreements the discharged employee can claim duress and
coercion, thus opening the possibility of civil suits.31
According to the booklet, retention of the employee
is a gamble, but it may be a worthwhile gamble since the
employee may have been a one-time thief. Sometimes neither
prosecution nor dismissal would be "right" for the offender;32
The booklet contained informative and valuable infor-
mation, especially for the novice employer or manager. How-
ever, it was not an in-depth, theoretical discussion of the
entire subject of employee dishonesty, especially the section

entitled "Handling Employee Theft Cases.”33

Employee Disgipiine by Lawrence Stessin discussed the

 

30The Thief You Pay, (Los Angeles: Security World
Publishing Co., 1969), p. 52.

3112191.. p. 53. 322141.. pp. 52—53.
33121.11.” PP- 49-54.

28
problems that management often encounters in the area of
discipline for theft. That is the disagreement between man-
agement and labor (unions) on the dismissal of employees.
The book directed itself primarily to the issue of arbi-
tration board hearings when a dispute existed. The primary
finding was that arbitrators are reluctant to remove a
laborer's livelihood by branding him a thief and, therefore,
often authorizes discharge for policy infractions (absen-
teeism, refusal to take a polygraph test, etc.).34

The importance of union influence on the disposition
of dishonest employees in a retail setting has been difficult
to document. If firms have unionized personnel, they must
handle discipline and discharge of employees according to the
union's contract with the management. Diversion from past
practices in handling such cases could also be grounds for
union grievance.35 The effect of unions on the dispostion
of dishonest employee cases deserves further study.

Employee dishonesty is often considered a form of
white-collar crime. At least one type of employee dis-
honesty--embezzlement--is always included in whatever def-
inition of white-collar crime one prefers.

To review all the significant literature on the

 

34Lawrence Stessin, Empigyee Discipline, (Washington:
BNA Incorporated, 1960), pp. 103-105.

35George Strauss and Leonard R..Sayles, Personnei:
The Human Problems of Managgment, (Englewood Cliffs, N.J.:
Prentice-Hall, Inc., 1972), pp. 107—110.

 

29

subject of white-collar crime would be outside the SCOpe of
this study. However, books on the subject were scanned:
some are noted here and others appear in the bibliography.

The solution to white-collar crime, as viewed by
Norman Jaspen and Hillel Black lies in the realm of those
most responsible for creating it--top management. Because of
a lack of awareness of the seriousness of the problem, the
majority of American businessmen have failed to realize that
they themselves are the main contributors to their own

36

employees' dishonesty. Employee dishonesty is a barometer
of how well an organization is being run. The authors sug-
gest that a system of preventive management is the solution
to white-collar crime. This is defined as management's
initiation of preventive measures without waiting for the
symptoms to appear. They include a plan of action for pre-
ventive management in their book.37
Other books on white-collar crime largely discuss
the social, moral, and ethical implications of such crime.
Its low visibility and non-physical nature also creates con—
siderable difficulty in resource allocation of enforcement

38

funds and manpower.

 

36Jaspen and Black, op. cit., p. 233.
37M°a 1313- 2143-25“-

38Herbert Edelhertz, The Nature, Impact, and Prose-
cution of White-Coliar Crime, (Washington: Government
Printing Office, 1970), pp. 25-26.

3O
PERIODICALS

Some data were found relating to private disposition
of shoplifting cases. One such article by Roger K. Griffin
appeared in the September, 1973 issue of Security Worlq.

The data were compiled from 632 supermarkets and eighty—five
drug stores that contributed information regarding 18,193
cases of apprehension in a year's period. The tables pre-
sented in the article analyzed the cases by (a) prosecution
or release, (b) time of day, day of week, and month incident
occurred, (0) sex of the offender, (d) age groups, (e)
methods of operation, and (f) average value of merchandise
recovered per apprehension. A summary of the prosecution-
release data appears in Table 1. Tables of this type are
frequently presented in the literature on shoplifting but
few exist for dishonest employee incidents. The need for
such tables is evident.

As indicated in the table, two-thirds of all appre-
hended suspects in the reporting supermarkets were released.
However, a larger percentage of juveniles were released
(76.3%) as opposed to adults (60.6%). The percentage of
released offenders was higher for the reporting drug stores,
but adults were released less frequently that those in the
supermarkets.

The data presented by Mr. Griffin revealed inter-

esting questions regarding prosecution and release, but this

31
area was not even discussed in the article. Instead, Mr.
Griffin presented the data and textually extrapolated the
statistics to arrive at a cost figure of victimization to

the retail firms surveyed.39

Table 1a

Percentage of Adult and Juvenile Shoplifting
Cases Prosecuted and Released

 

 

Disposition Total Adults Juveniles

b

Mkt. DrugC Mkt. Drug Mkt Drug

 

Shoplifters Booked 33.3 26.6 39.4 41.4 23.6 14.9
Shoplifters Released 66.7. 73.4 60.6 58.5 76.3 85.1

 

Total Cases 15542 2651 9327 1150 6130 1497

 

 

 

 

aSource: Roger K. Griffin, "Shoplifting," Security
World, X (September, 1973), 17.

kat.-—Supermarket. CDrug--Drugstore.

Mr. Griffin also had an article published in Police
,thEf in July of 1964. The article also concerned shop-
lifting and it described a study encompassing 7,294 cases in
supermarkets. The purpose of the study was to analyze the
cases in order that security personnel could better utilize
their resources. The same type of data as described above

was collected. In reference to the issue of prosecution

 

39Roger K. Griffin, "Shoplifting," Security Worig, X
(September, 1973), 16-19.

32
versus release, 22.5 percent (1,766 cases) of the shop-
lifters were prosecuted while 77.7 percent (6,158 cases)

were released.)+0

This artiéle by Mr. Griffin concerned the
need for security procedures in supermarkets in combatting
shoplifting.

An article entitled "Considerations for Prosecution"
appeared in the February, 1970 issue of Industrial Security.
The article was written by the Investigations Committee of
the American Society for Industrial Security. The article
called for reevaluation of business as a victim of criminal
acts.

A premise in the article was that the business com-
munity had not yet accepted its role as a victim of criminal
acts. The idea that pressing charges against an offender
was bad for the corporate image was refuted in the article.
Reassessment of other notions, such as being in business to
provide a service or to make a profit and not to prosecute
criminals, was proposed. In other words, the business com-
munity has social, moral, and ethical obligations also.

The article stated that experience showed that those
firms that had made the decision to prosecute never had their
anticipated fears materialize: that neither their employees
nor the labor unions resented the decision to prosecute.

A commitment toward a policy of prosecution where

appropriate could be a long stride toward the recognized

 

uoRoger K. Griffin, "Shoplifting in Supermarkets,"
Police Chief, XXI (July, 1964), 37.

33
need for a new law and order standard, according to the
article.

The purpose of the article was apparently a call for
the business community to establish policies regarding prose-
cution of offenders, both employees and outsiders. The
authors of the article, however, were definitely for a hard
line approach toward increasing prosecutions. The article
did not really explore the in—depth consequence of prose-
cution versus release.

An article published in Security Management in July
of 1973 discussed employee dishonesty more objectively than
did most. The author, Robert L. Mersky, titled his article
"The Dishonest Employee...A Behavioral Problem." According
to Mr. Mersky, there are four common elements in every suc-
cessful employee theft:

1. The employee must feel an economic or psycho—

logical need to steal from his employer.

2. The employee must be able to overcome his con-

science-—the belief that it is morally wrong to steal.

3. The employee must have the opportunity to commit

the theft. 41

4. The employee must not get caught.

The article covered various areas of employee theft
and white-collar crime. Reference was made to the present
security philosophies used to combat the problem. Also dis-
cussed was the covert financial loss involved in dismissing

an employee for dishonesty. In terms of recruiting, acqui-

sition, training, familiarization, experience, development,

 

“iRobert L. Mersky, "The Dishonest Employee...A
Behavioral Problem," Security Management, XVII (July, 1973),
7.

34
and on-the-job-training, in many cases the employee caught
stealing and subsequently dismissed was worth more than the
things he stole. Other costs included correcting documents
(if forgery or embezzlement was involved), rebuilding custo-
mer relations, combatting general disruptive and demoral-
izing effects on other employees, prosecution costs and pos-
sible law suits.42
With regard to the purpose of this thesis, in terms
of disposition of apprehensions, Mr. Mersky stated:
While the punishment should be no more severe than
'fle crime, experience has proved that most firms will
not prosecute, even in the most obvious criminal thefts.
Consequently, most thieves steal in the assurance that 43
If caught, they Will only be fired, but not prosecuted.
Most of the literature discussed in this section
only touched the surface of the problem of disposition of
employee theft cases in retail establishments. Most articles

appeared to be preoccupied with the statistics of crime

against business.
GOVERNMENT PUBLICATIONS

Since 1967,with the passage of the Small Business
Protection Act, the Federal government has taken a more
active role in gathering data on the effect of crime on busi-
ness establishments. The major direction of initial efforts
has been to collect and analyze data. This has been done by

Senate Hearings and surveys funded by various governmental

 

42 ° 43Ibid., p. 10.

 

35

agencies.

In 1969 the Small Business Administration published
a report entitled Crime Against Small Business (Senate Docu-
ment 91-14). The information contained in the report was
the first comprehensive gathering of statistics from a repre-
sentative sample of all American business.

The study contained a wealth of information. Sum-
mary statements relating to employee dishonesty included:

1. Employee theft ranked fourth in dollar losses
for all businesses (page 24).

2. The ratio of losses to receipts for firms under
$100,000 was eighteen times as great as firms with over five
million dollars in receipts (page 25).

3. The proportion of all businesses reporting each
major type of employee theft--of money, of merchandise, and
of supplies and equipment--was substantially the same at
four to five percent (page 86).

4. However, for retail businesses the theft of
money and merchandise was twice that of supplies and equip-
ment (page 86).

5. Employee theft did not seem to bear as close a
relationship to location of the business as one would expect.
The only significant discrepancy was found in locations under
10,000 population which reported fewer incidents of employee
theft (page 86).

6. With regard to preventive actions, the only

recommendation relating to disposition of apprehended

36
employees was that there should be fixed policies about
discipline for dishonesty. Failure to take decisive action
or failure to be consistent can have an adverse effect on
other employees (page 263).

Another government publication, The Economic impact
of Crimes Against Business, was published in February of
1972 for the U.S. Department of Commerce, Bureau of Domestic
Commerce. It stated that the loss to retail stores from
petty theft was conservatively estimated at $4.6 billion
annually},+ Petty theft included shoplifting, employee theft,
and accounting errors.

According to this document, the retail industry sus-
tained about one—fourth of the total dollar losses to all
busineSses and yet their contribution to the Gross National
Product was about 10.2 percent in 1970. Therefore, the
retail industry suffered a disproportionate amount of losses
relative to other commercial sectors.45

The study's recommendation in the area of disposition
of offenders apprehended was to make greater efforts to fol-
low through on prosecution. "Laws against theft have little
deterrent effect if they are not enforced. Even limited
tactical enforcement might do much to help deter minor

46

offenders."

 

44

U.S. Department of Commerce, The Economic Impact
of Crimes Against Business, (Washington: Government
Printing Office, 1972), p. 2.

46

“512E. ’ p0 110 Ibido ' p. 214’.

 

37

The National Institute of Law Enforcement and
Criminal Justice conducted a seminar on April 12 and 13,
1972, the proceedings of whichvmre published under the title
"Urban Design, Security and Crime." One speaker at that sem-
inar was Verne A. Bunn of the Small Business Administration's
Kansas City Office.

In Mr. Bunn's address, he spoke of some of the prob-
lems encountered in small business security. He stated that
most crimes in business go unnoticed and unreported, espe-
cially crimes of employee pilferage, fraudulent checks,
vandalism, and shoplifting.

Secondly, most merchants are unwilling to admit to
their losses since they would be admitting to internal weak—
ness of operation.

Thirdly, most businesses are unwilling to take formal
action. They want to take the easy way out and not get
involved in court cases because of the time and expense. All
they want is to get their money or their merchandise back
with the least amount of effort on their part.47

According to Mr. Bunn, estimates of the impact of
crime on business, when broadly defined, probably run as
high as $25 billion.48

Presently, the bulk of the governmental literature

has been directed toward statistical data on the amount and

 

47
48

U. S. Dept. of Justice, 2p. cit., p. 59.
Ibid., p. 610

38
type of crime confronting the business community.

Mr. Bunn's address, for example, regarding small
business security did touch on major problem areas, but once
again, little was discussed in terms of the disposition of
apprehended offenders and its impact on private and public

justice.

UNPUBLISHED MATERIAL

The National Chamber of the United States Chamber of
Commerce provided the author of this study access to a draft
of a book being published, entitled White Collar Crime:
Everyone's Problem, Everyone's Loss. It discussed all types
of criminal trust violations. Reasons for non-reporting of
criminal offenses by the business community to law enforce-
ment agencies includedfl'9

1. The firm obtains restitution in return for a
promise not to inform enforcement agencies.

2. An executive covers up his protege's illegality
so that chances for a promotion will not be tarnished.

3. The company covers up an embezzlement for fear
it might be found actionably negligent in having not detected
the crime sooner.

4. The company may be exposed to bad publicity and

its image may suffer.

 

”9U.S. Chamber of Commerce, White Coilar Crime:
Everyone's Protiem, Everyone's Loss, (unpublished to date,
Washington: National Chamber of Commerce, 1974), p. 63.

39

5. Executives are afraid of countersuits for libel,
malicious prosecution, false arrest, etc.

6. The criminal justice process is so fraught with
delay and legal maneuvers that defense attorneys can prolong
a case for two years or more, considerably draining man-
agerial time and resources.

7. The end result of adjudication will often be a
mere slap on the wrist--an outcome considered not worth the
effort.

8. The firm is interested only in eliminating the
cause of profit loss, that is, in terminating the employee,
perhaps on a collateral issue (gig., poor work, absenteeism,
tardiness, etc.).

9. Management often pities the offender.

The study suggested that none of the reasons were
sufficient to support a no-prosecution policy and that many
of the reasons, in themselves, could be considered illegal.
For example, in some jurisdictions, granting the offender a
promise not to prosecute in return for restitution could be
considered criminal compounding of a crime. It also may
permit an offender to successfully claim duress or that his
confession was not voluntary.5O The study also stated that
the dollar amount involved and the intent of the offender
regarding a criminal offense were common criteria on which

the decision to press charges was based.

 

50Ibid.

40

A strong appeal for reassessment of the above reasons
was advocated by the study and it suggested that the criminal
justice system should be improved through pressure and not
circumvented or ignored. This section of the draft con-
cluded with an example of one firm's policy that apparently
met with approval from the National Chamber of Commerce:51

1. Employees will cooperate in the investigation,
detection, and prosecution of criminal offenders.

2. Those committing crimes will be aggressively
prosecuted.

3. Except for incidents of petty theft and dis-
honesty, all misdemeanors and felonies will be reported
to police. Police are not to be used as a collection
agency.

4. Restitution will in no way alter the company's
above stated policy to prosecution.

The importance of this document will be determined
after its publication and distribution. It should receive
considerable attention from the business community and the
academic world as well as legal scholars.

In summary of the literature, it is evident that the
concept of private justice is overtly discussed in some
circles (primarily the academic community and a few noted
authorities such as Gerald Robin and Sargent Curtis), but it
is largely an implied matter that has received little public
attention. Apparently the idea of "private enterprise" has
carried over into the criminal arena. In other words,the
business community may prefer to handle its own dishonest

employees with little public attention and fanfare.

Emphasis is being placed on the impact of crime on

 

51Ibid., p. 65.

 

41
the business community by governmental studies and by some
trade association reports. Business as a victim is receiving
greater attention, but in this day and age of "big business"
and inflation, the problem of public empathy on this issue
is probably as serious as ever. There is an overwhelming
plea by many authors for increased prosecutions. Some
authorities, however, are not convinced that prosecution is
the complete answer to the problem. Sargent Curtis' views
on prosecution, for example, have become less rigid over the
years primarily because of his view of managerial responsi-
bility in preventing internal losses.

There is a notable lack of empirical data to support
the procedures and policies suggested by some of the
"authorities? Employee dishonesty may be more difficult to
analyze because of its inherent sensitivity, but it is too
serious of a problem to ignore. As a method of preventing
dishonesty, few have addressed the disposition process and

its related impact.

Chapter 3
METHODOLOGY

The methodology used in this thesis is relatively
simple. As an exploratory study, emphasis is on discovery
of independent variables that help to explain the use of

private justice in the retail industry.

THE SETTING

The setting for this study is Arlington County,
Virginia, the second smallest county in the United States.

In its 25.7 square miles of land live an estimated 170,284
persons.

Arlington County is situated southwest of the Dis-
trict of Columbia. It is bordered on the northeast by the
Potomac River and on the southeast by the city of Alexandria,
Virginia.

According to 1972 statistics, there were 8,667 busi-
nesses in the County of which 1076 were designated retail.
Retail sales amounted to $452,596,204 per year.52

Arlington County has a county-manager form of

government. The judicial system is made up of a Circuit

Court, part of the State system, and the General District

 

52Arlington Chamber of Commerce, Arlington Blue Book
(Arlington: Cooper-Trent, 1973). P. 19.

42

43

Court. The General District Court is sub-divided into the
Criminal Court, the Traffic Court, and the Juvenile and Dom-
estic Relations Court.

Under the management of the Circuit Court is the
Office of the Special Magistrate. The Office is staffed
by four full-time and eight part-time appointees. They are
authorized by statute to hear evidence of probable cause,
to issue warrants and summonses, to set bond on arrested
persons, and to collect fines on parking and traffic
citations.

When on duty, the Special Magistrate is located at
the Violations Bureau in the County Court House. The Vio-
lations Bureau is open twenty-four hours a day every day of
the year (except for brief periods of time at the dinner
hour). Any citizen or police officer has access to the
Violations Bureau and the Special Magistrate.

Arlington County was chosen as the setting for this
study for four primary reasons. Firstly, the variable of
the system of public justice could be held constant by
limiting the study to one jurisdiction. Secondly, the
availability of the Special Magistrate makes prosecution
of individuals less cumbersome in terms of obtaining warrants
of arrest. Thirdly, the retail community in Arlington
ranges in size from the small owner-proprietor store to
firms employing as many as 533 individuals. And fourthly,
as a police officer employed by the County of Arlington,

this researcher hoped to overcome the communications gap

44

that often arises when an ”outsider” attempts to investigate

a particular segment of society.

DATA GATHERING TECHNIQUE

The structured interview was the primary method used
to gather data in the inquiry. Some of the information was
collected from unstructured interviews.

The questions employed in the structured interview
were phrased in such a manner as to allow broad latitude in
answering them.

Initial questions in the interview concerned the
number of full and part-time employees and whether the firm
maintained a full-time security department. These questions
were asked for purposes of detecting a possible link between
the size of the firm and the disposition of dishonest
employee incidents.

A number of questions dealt directly with the
actions taken against dishonest employees if legal charges
were not pressed against them. These questions, of course,
were for purposes of identifying the various options used in
private justice and the justifications for the actions taken.

Two questions dealt directly with the factors
influencing prosecution. One question asked for the factors
considered in the decision to prosecute or release if prose-
cution was not a foregone conclusion at the time of appre-
hension. The second question asked, "If it were possible to

successfully prosecute the majority of your dishonest

45
employees, would you do so? If not, why not?" The purpose
of this question was twofold. Firstly, it measured some
degree of the desire to punish the dishonest employees and
secondly, it elicited factors influencing the decision
to prosecute. A third question related to prosecution
indirectly in that it asked whether the respondent believed
that apprehended dishonest employees received their just
rewards in terms of punishment.

Other questions concerned various areas of procedure
and policy of the firm, such as use of release forms and
exchanging information with other businesses.

A list of the questions asked during the interviews
can be found in Appendix A. The first fourteen questions
were submitted to each respondent in order that he could
better understand the questions and ask for clarification if
necessary, The other questions were asked by the interviewer
as a matter of routine even though they were not written out
for the respOndent.

Selection of the firms for interview was made by
judgment (purposive) sampling. The criteria of size, in.terms
of the number of employees, and type of goods sold was
utilized in the selection process. Some variation in size
was desired for comparison purposes. Very small firms were
excluded because they were primarily family owned and run,

thereby reducing the likelihood of employee dishonesty. Two
I of the three firms in Arlington County with in-house security

forces were selected because they would tend to have a

46
formal structure in processing dishonest employees. With
regard to the type of goods sold by the firm, this criterion
was chosen to determine whether private justice was more
evident in certain types of retail establishments. The size
and type of retail firms surveyed is found in Table 2 on
page 49.

Ten firms were selected for interview. Two of these
firms were branch outlets of an area-wide company. The
managers of these two firms referred this interviewer to
the loss prevention director of their respective companies.
Interviews were subsequently conducted with those loss pre-
vention directors. Because the loss prevention directors
represented all the firms of his company in Arlington County,
the ten interviews reflected the procedures and policies of
twenty-four retail firms.

In Arlington County, the location of all retail
firms are along major traffic arteries. This pattern devel-
oped from the strict zoning laws of the county. In this
respect, the environment in which the retail firms were
situated was essentially equal. The entire county was sub-
urban in nature and in regard to race, socioeconomic status,
availability of county resources, etc., no differentiation
can be made.

Time and resources were critical constraints on this
study. Since this researcher utilized a very time—consuming
data gathering technique (the structured interview), only

a limited number of interviews could be conducted.

47

One could question whether ten interviews were
sufficient in analyzing the problem addressed by this study.
This researcher maintains that ten interviews were sufficient.
In exploratory research one is concerned primarily with dis-
covery of variables, hypothesis formulation, and relevancy.
Exploratory research is not as interested in ”proving" some-
thing as it is in formulating and devising something to
prove later. Ten interviews are sufficient if those ten
yield enough data to indicate a pattern or possible hypo-
theses.

Prior to interview, this researcher knew nothing of
the policies and procedures of the selected firms in
relation to employee dishonesty. He did not know whether
the firms had experienced much difficulty with dishonesty or
whether they engaged in private justice. And yet, all ten
respondents indicated that they had apprehended dishonest
employees and that they did engage in private justice.
Considering the type of information being sought by the
interviews, this researcher contends that additional inter-
views most likely would have yielded limited dividends (in
terms of different policies and practices) for the amount of

resources invested.

Chapter 4

FINDINGS

A total of ten separate interviews were conducted.
Two respondents represented more than one firm because of
branch outlets of the company. A total of twenty-four
separate retail locations in Arlington County were repre-
sented in the interviews.

All of the managers, proprietors, or security
directors were promised complete anonymity: therefore, a
number has been assigned to each interview. Where some
respondents represented more than one retail firm in Arling-
ton County, the number runs consecutively to include the
number of firms represented. For example, 5-17 represents
thirteen firms in Arlington County, and 19-21 represents

three firms.

FIRM CHARACTERISTICS

The twenty-four retail firms represented a variety
of retail concerns. The size of the firms, in terms of
persons employed, varied considerably. A breakdown by type
and size is found in Table 2.

The size of the firm was measured by the number of
employees and not by the total dollar receipts as in other

studies. The latter would be more difficult to determine or

48

.EhfiM pom mmwpm>w cm mpcmmopmma
Umposw popes: one .nospo one op seem one 809% mmfiam> oasmflmp

.Am\sv mammaflm>m pom DEHPIPHMQ 6cm uaasm Cmmzpwn szocxmwpmm

 

49

 

 

 

me an mcegpeao :m m\c hated ween ee-m
m S mcflnpoao mm ma om eespecpzm. e
m m mpeomm mm owe pmm pcespeemeo m
pom pmfi Sheoopm Hmumfi mm mm pcesphmmeo m
He m: ecesphemem we m\c emmm pcesphmeem H
pawn Hasm 99mm Hasm

mmmhoamsm make Sham mmozoamsm maze Seam

 

 

 

 

 

 

mmmhoagem Mo nonesz cam vaom mvooo mo
omhe an vaDH>MDPQH mshwm mo Soapmflhommm

N Danae

 

 

-.w, . _._-—_—__-— - -_.._ —.—-__...~.———-.

 

50
in some cases would not even be available to the person being
interviewed.

The size of the firms ranged from 10 employees to
533 employees (including part-time personnel). Department
stores were over-represented primarily because of their size.
Most retailing firms employing a large number of employees
tend to be department-style establishments. Firm 18 was a
discount-catalog department store with a different char-
acter than the common self-service department store.

Firms 1 and 3 maintained full-time security staffs,
while firms 2 and 18 employed off-duty police officers at
"peak" periods (24%;: Christmas and holidays). Firms 5-17,
19-21, and 24 had regional security agents or loss pre-
vention offices that were notified of special problems or
suspected criminal activity.

Regarding pre-employment screening, practices ranged
from application only to various means of credit/criminal
checks. Firm 18 occasionally used the polygraph. (The poly—
graph was used as a tool by this firm to periodically check
on the employees' honesty. If the tests were being conducted
on the same day as an applicant's interview, the applicant
might also be asked to take the test.) Two firms, 3 and 24,
were members of the Stores Mutual Association.(SMA). Mem-
bers of the association submitted data sheets on all appre-
hended suspects to the main office and, as a membership
service, could request record and clearance checks on sus-

pects and prospective employees.

51
DISPOSITION OF APPREHENSIONS

All the respondents were asked for the number of
apprehensions of dishonest employee suspects for the year
1973. Dispositions, in terms of prosecution, restitution,
or dismissal were also requested. Many of the respondents
could only estimate the number for various reasons. Either
the case papers had been forwarded to the main or regional
office or a notation of the incident had merely been put in
the employee's file. Most respondents estimated the number
or gave an exact number, but not always in terms of 1973.

For example, one response was: "Three in the last five
years, that's how long I've been here." (See firm 23 in Table
3 below.) Since the purpose of the question was for indi-
cation purposes and not for a highly standardized statistical
study of the apprehensions, the issue of just a one year
period was not pressed. The purpose of the question was to
obtain a number to be used as a guide. For example, what-
ever figure the respondent quoted, that number was used in
the following questions regarding the number of employees
whc> were dismissed and the number prosecuted. The responses
were used as an indication of the firm's actual practice in
disposing of cases. It also indicated whether the firm
adhered to a highly visible punitive approach to dishonesty.

A summary of responses to the question regarding the
disposition of employee apprehensions is contained in Table 3.

With reference to the table, it must be noted that

52
the figures for firm 5—17 represent apprehensions made in
151 Metropolitan Washington, D.C. area firms of the company.
The figures were quoted by the Loss Prevention Director of
the firm. The figure was included in the table because it
indicated the firm's pattern of disposition. The figures
for firm 5-17 should ngt be interpreted as two hundred appre-

hensions in the thirteen firms located in Arlington County.

Table 3

Disposition of Apprehended Employees by Firm In 1973

 

 

gs, ===..==.=._===
Authorities
Firm Apprehended Dismissed Prosecuted ~Notified
. (w/o pros.)
1 11a 11a 4a 7
2 2 2 O O
3 n/a n/a n/a n/a
4 3 3 2 0
5-17 200b 200b 6b n/e
18 50-60 50-60 4 n/e
19-21 n/a n/a n/a n/a
22 2 2 O 2
23 3C 3C 0 0
24 4 O O

 

 

 

 

 

aTwo year period, 1972 and 1973.
bIn 151 firms, figures for 5-17 alone not available.
0Five year period, 1969-1973.

r11/aNot available.

53

From Table 3, one observes that all persons appre-
hended for criminal activity by the twenty firms from which
figures were obtained were summarily dismissed from employ-
ment. In fact, nine of the ten respondents stated that
their firm's policy was automatic dismissal. Only one
respondent, the loss prevention director of the supermarket
chain (firm 19-21), indicated that it was his policy to
retain dishonest employees. The employees were given a
break and given the opportunity to rehabilitate themselves.

When the above findings are viewed in light of the
various characteristics of the firms, a number of testable
hypotheses for future reseach emerge. Excluding firm 5-17
for the moment because the available disposition figures
represent 151 firms, one finds that firm 18 has a very high
rate of personnel turnover. The firm employs a total of 110
persons, yet 50—60-persons were apprehended and dismissed in
a one year period. It is not known whether most of these
persons were part-time or full-time employees. The length
of employment of the apprehended employees is not known
either. It is also not known whether any employees resigned
prior to the polygraph examination. It is known, however,
that firm 18 does not maintain a full-time security staff
and that it utilizes the polygraph for periodic ”honesty
checks.” Therefore, the following hypothesis is proposed:
Retail firms utilizing periodic polygraph examinations as a
condition of employment experience a larger turnover rate in

personnel than do other firms. An additional hypothesis to

54
explore in relation to this one would be that voluntary (non-
forced) resignations of employees are submitted with increasing
frequency as the polygraph examination date approaches
(assuming that the date of the examination is common know-
ledge among the employees). Another related hypothesis is:
Most employees dismissed after polygraph examination are
part-time employees. A companion hypotheis would be that
the voluntary resignations received just prior to polygraph
examination are also primarily from part-time employees.

The relationship between full-time and part-time
employees with regard to dishonesty is also a general tOpic
for research. Are part-time employees more prone to dis-
honesty than are full-time employees? In other words, what
are the rates of apprehension for full-time employees as
compared to part-time employees? Is it worth employing part-
time personnel if they are caught in a disproportionate
amount of dishonesty?

Time graphs could be utilized in the analysis of
most of the above stated hypotheses. Selection of firms for
analysis should be based on the criterion of the use of poly-
graph examination at a periodic interval and as a condition
of employment. Factors such as size and type of retail firm,
security staffs, screening processes, etc., should be com-

parable, if not held constant.

55

THE CONCEPT OF PUNISHMENT

Prosecution is by far the most visible form of pun-
ishment for a dishonest employee. Table 3 indicates that of
those employees apprehended, only sixteen were actually pros-
ecuted and another nine were reported to the authorities (ggiu
juvenile authorities), without further processing.

In light of other questions asked of the respondents,
the low figures on prosecution were surprising. The respond-
ents were asked, ”If it were possible to successfully prose-
cute the majority of your dishonest employees, would you do
so?” Of the ten respondents, five answered, ”Yes": one
answered, ”No"; one stated that it depended upon the severity
of the dishonest act: two answered, ”Personally, yes, but
the store policy is not to prosecute": and one stated, "Oper-
ationally, no, if I had a security department, yes."

The response to the above question indicates that
most store managers and security agents surveyed would prefer
to prosecute the dishonest employee when prosecution is
likely to be successful. This also indicates that most of
the respondents adhere to a punitive philosophy with regard
to employee dishonesty. Such views coincide with the philos-
ophy of security as enforcement as discussed in the theoret-
ical framework on pages 8 to 13.

Another question, "Do you believe that those
employees detected and apprehended by your firm receive their

just rewards in terms of punishment?" was asked of the

 

 

56
respondents. The responses to this question must be viewed
in the light of the firms' actual practices. Firm 1 answered
in the affirmative, as did firm 4. Both firms had a high
rate of prosecution. Firm 1 prosecuted four of the eleven
apprehended employees but the other seven were reported to
the authorities. Firm 4 had three apprehensions with two
prosecutions. Respectively, firms 3, 5-17, and 22 replied
negatively with comments: "The courts appear to be too
lenient," "Maybe so in small towns where one's reputation
is hurt," and "They knew what they were doing." Although no
figures were furnished by firm 3, they stated that prose-
cution was usually considered. In firm 5-17, prosecution is
attempted in all felonies (dollar value in excess of $100).
If they have a good case and a prosecutable offense, they
will prosecute. In firm 22, the respondent (manager) wanted
to prosecute the apprehended employees (the police had
entered the case), but the owner subsequently decided not to
prosecute.

Firms 2, 18, 23, and 24 indicated that they thought
the dismissal, humiliation, and bad recommendation was enough
punishment for those apprehended. Of these firms, only firm
18 had attempted any recent prosecution of apprehended
employees.

Firm 19-21 did not adhere to a punitive philosophy
toward initial dishonesty. Five of the respondents (firms
1, 3, 4, 5-17, and 22) indicated that more than mere dis-

missal would have been ”just” punishment for those

57
apprehended employees. This was another indication of

adherence to punitive philosophy.
THE PROBLEM OF PROSECUTION

The data suggest that most respondents took a strong
personal (if not corporate) position :9; prosecution of dis-
honest employees. The actual practice of the firms, however,
contradicted that position. Why were there not more prose-
cutions?

The respondents were asked about the factors that
influenced their decision concerning whether to prosecute an
apprehended employee. Firms 1, 2, 3, 4, 5-17, and 18 indi-
cated that the amount of evidence and the type and serious-
ness of the offense were dominating factors influencing the
decision to prosecute.

Other factors mentioned in deciding whether to prose-
cute employee offenders included (a) the cost of prosecution
in terms of lost manhours and wages for court appearances,
(b) company policy, (0) the overall attitude of the offender,
(d) the likelihood of recovery or restitution, (e) the
leniency of the court on first-time offenders, (f) the deter-
rence effect on other employees, and (g) embarrassing cir-
cumstances. One respondent (firm 22) merely stated, " The
owner is softhearted."

It was interesting to note that no respondent ever
mentioned the factors of possible adverse publicity (public

image) or employee morale as is often mentioned in the

58
literature. However, this researcher believes that they
should receive some attention in future research.

For example, Arlington County may be unique in terms
of the publicity coverage given to dishonest employee
incidents. The inhabitants of the county rely primarily on
the two large newspapers based in the District of Columbia.
There is relatively little ”local” news coverage in either
of these newspapers. Arlington County is serviced by a num-
ber of weekly newspapers, but crime coverage is often
limited. A researcher might attempt to analyze the publicity
issue by reviewing the news coverage, if any, of dishonest
employee incidents that terminated in prosecution. Various
criteria could be devised to evaluate the news coverage as
favorable or unfavorable to the firm involved. A survey of
a number of citizens following the coverage of a dishonest
employee incident could also address the issue of public
image. What are the citizens' feelings toward the firm?

An unobtrusive approach to citizen reaction after coverage
of the criminal offense would be a before and after measure
of the number of customers that pass through the firm

Employee morale is a factor that employers should
recognize as a possible contributing factor to the dishonest
behavior of employees. For this reason, another proposed
hypothesis for future research would be: A consistent dis-
position procedure raises employee morale. One possible
approach to this hypothesis would be to identify a number

of firms as having a procedure of consistent or inconsistent

59
disposition. For testing purposes, one might substitute
"prosecution" for "disposition," thereby making the hypotheshs
read: A consistent prosecution procedure raises employee
morale. Employee morale could be measured by a scale or
index similar to those named in Part IV, Section C, ”Morale
and Job Satisfaction," of Delbert C. Miller's Handbook of
Research Design and Social Measurement (pages 231-271).
Subhypotheses in this framework would include (a) a low rate
of prosecution lowers employee morale while (b) a high rate
of prosecution raises employee morale. An interested
student might want to analyze the effect of dismissal pro-
cedures on employee morale. Suggested hypotheses include
(a) consistent dismissal procedures for dishonest acts main-
tain high employee morale and (b) inconsistent dismissal
procedures cause low employee morale. By testing the above
hypotheses, one could generally infer what effect, if any,
private justice has on employee morale. By testing the above
hypotheses, it might be possible to discuss whether it is
private justice or prosecution that affects employee morale
or whether it is the consistent application of either one
that directly affects employee morale. Sargent Curtis
contends that it is not the disposition pg; s2 that affects
morale: it is the consistency with which it is applied to
all offenders.53

Most respondents in this study indicated that the

 

530urtis, Modern Retail Security, p. 278.

60
amount of evidence and the seriousness of the offense were
primary determinants in deciding whether to prosecute an
employee. The lack of data on each offense precludes proper
analysis of these two factors. However, an analysis of a
firm's detection procedure in relation to the number of
offenses prosecuted yielded data for thought. For example,
firm 1 tended to develop a case against a suspected dishonest
employee. When the employee was observed perpetrating the
offense, an apprehension was made. Thus, prosecution was a
more practical alternative from an evidentiary standpoint.
Firm 18, as mentioned above, relied on the polygraph to
detect offenders. As a condition of employment, personnel
submitted to periodic polygraph testing. Many employees
subsequently admitted to dishonest acts against the firm.
Because of insufficient evidence to take into court (poly-
graph results are not admissable in court), most employees
were merely dismissed. Firm 18 did not maintain a security
department while firm 1 did. Not enough information is
known regarding the detection procedures of the other estab-
lishments surveyed to make similar comparisons.

'To this researcher's knowledge, no attempt has ever
been made to correlate detection procedures with the rate of
prosecutions. Could it be possible that some firms choose
the easy way out by making premature apprehensions without
sufficient evidence for prosecution? If so, they subse-
quently could excuse non-prosecution by stating that they

had insufficient evidence for conviction. The findings of

this study suggest further
detection and apprehension
necessary for prosecution.

The procedures and
be directly related to the
the person responsible for
regarding this issue might
background characteristics

hension techniques and the

61

research into the techniques of

in terms of the requirements

policies that a firm utilizes may
”competency” of the manager or
policy formulation. A hypothesis
attempt to relate personality and
of security agents to the appre-

disposition process of the firm.

For example, educational achievement, occupational back-

ground, knowledge of legal

requirements for conviction,

position on punishment, etc. are measureable characteristics

that may be possibly correlated to security policies and

procedures. Do graduates of criminal justice programs have

a higher or lower rate of prosecution than non-graduates?

Does a "police background"

affect a security agent's appre-

hension technique (which may affect the prosecutability of a

case)?

MISCELLANEOUS FINDINGS

Some questions were aSked of the respondents to

gauge their knowledge of the problem of dishonesty in their

own firms.

All were asked what type of crime related activity

was encountered most often from the standpoint of employee

dishonesty. Six respondents indicated that theft of mer-

chandise was the most encountered criminal activity. The

62

other four indicated that the cash terminal was the primary
location of their problems. This included larceny of cash
and collusion between cashiers and "customers." From the
standpoint of private justice, this study does not address
whether the type of crime-related activity (gag., theft of
merchandise, theft of cash, etc.) has any bearing on the
type of private disposition of the case. The type and
seriousness of the offense was mentioned by several respon-
dents as affecting the decision to prosecute but does it
also affect the "type" of private justice (dismissal, resti-
tution, retention, etc.) utilized in the disposition? Case
analysis in future studies is necessary to address this
issue. The issue of collusion as a determinate factor in
the disposition process could also be addressed by such
analysis.

With regard to those firms that considered prose-
cution, all did so after interviewing the employee and
deliberating the facts of the case.

With regard to a question concerning the processing
procedure of an apprehended employee, the responses were
generally very disappointing. Only the larger firms (1, 2,
3, and 5-17) maintained any forms such as the Miranda
warnings and an admission form. They also took written
statements when possible. The pagig procedure followed a
pattern of detection, apprehension, advisement of rights,
statements regarding offense, and concluded with the decision

regarding disposition.

63

The respondents were asked if there were any special
conditions regarding security procedures that were required
of all employees upon being hired. Generally speaking, there
were few. Firms 1 and 3 held training classes for new
employees but security was only one topic of discussion.
Firm 2 required new employees to sign a statement indicating
that they had read and agreed to the firm's policy on rules
and regulations. Firm 4 required signed permission on the
application to permit a police check on any past record.
Firm 18, as mentioned earlier, made periodic submission to a
polygraph examination a condition of employment. Firm 24
required completion of a bonding application since all their
employees were bonded. The remaining firms had no particular
employment requirements regarding security practices.

Inquiry into the firms' practices of exchanging
information concerning dishonest employees with other firms
was often met with a long pause. The only official exchange
of any information by most of the respondents were reference
checks on prospective employees. Firms 3 and 24 often
requested record checks through the Stores Mutual Associ-
ation, but this proved beneficial only if the person was
once employed by an SMA member firm. The responses to this
question were evaluated by this researcher as unreliable
because of the sensitivity of the question. The practice of
exchanging such information with anyone would open possible
avenues for law suits.

The legal questions involved in exchanging this

64
information have not been adequately documented. Under what
legal restrictions do associations such as the Stores Mutual
Association operate? What are the problems associated with
such organizations? With the cooperation of such an organ-
ization, a researcher could probably obtain a wealth of data
for analysis. An interested student should attempt to
contact a number of these associations. (Most are located
in large cities such as Chicago, New York, and Washington,
D.C.) He could prepare a term paper on the typg of infor-
mation that is submitted to these organizations. After
analysis of this information, various hypotheses could be
formulated for a thesis design.

Section 18. 1-127 of the Virginia State Code is the
merchant's protection statute in regard to civil suits for
false arrest, illegal detention, etc. Four firms were eval-
uated as being familiar with the statute, three firms were
aware of what the law provided, one firm was barely aware of
its provisions, and two firms were not aware of it at all.
This and related statutes are found in Appendix B.

The firms most familiar with the merchant's pro-
tection statute were also the firms with the larger rates of
prosecution of apprehended offenders (iig., 1, 4, 5-17),
thus indicating that another hypothesis for future testing
would include possible correlation between the rate of pros-
ecution and the firm's knowledge of the law in terms of the
merchant's authority and civil protection. Conceivably, an

index to measure the level of knowledge of the merchant's

65
authority could be devised and administered to a number of
security agents and firm managers. Hypothetical situations
and points of law would be included in the index. The
hypothesis that a low "level of knowledge” (of the merchant's
authority) reduces the likelihood of prosecuting dishonest
employees is suggested for testing. If this is confirmed,

it implies that other actions (private justice) would be

‘3}fi7HK ‘07?"

taken against the employee in lieu of prosecution. It is

also hypothesized that a firm's fear of civil suits (in

A“ .F‘l 3' . -‘

security related matters) is directly proportional to the

‘jp'. an in. .

firm's knowledge of the merchant's authority. However,
before this hypothesis could be tested, the concept of "fear
of civil suits" would have to be operationally defined.

The above findings relate to the concept of private
justice, either directly or indirectly. That concept is the
issue in this thesis and, therefore, a separate chapter is

devoted to it.

Chapter 5
THE CONCEPT OF PRIVATE JUSTICE

Private justice is a common practice in the retail
industry of Arlington County. There is no denying it, nor
should there be. It is time that the problems associated

with retail security be discussed in an open manner in order

. .1! ~93... 3.4.1“ Cr’ F

that practical solutions may be formulated.

As discussed in Chapter 1, the philosophy of security

Y?‘_" '50:! . ..
V .

as enforcement adheres to a punitive approach to the dis-
position of employee offenses against the firm. In terms of
this study, the punishment ranges from automatic dismissal
to prosecution. The data discussed in Chapter 4 indicate
that nine of the ten respondents subscribed to a punitive
approach to dishonesty. Even though the firms' self-acclaimed
profile was "protectionist," they still operated by means of
control through power, a behaviorist trait. In other words,
the firm is concerned with only the conduct of the employee.
The intent and motivation of the action is of relative unim-
portance. Behavior is maintained within specified boundaries
and any employee that transgresses beyond those bounds must
be punished. These traits are operational examples of
security as enforcement which is predicated upon behaviorist
psychology (see pages 8-13).

The data gathered for this study suggest that pri-

vate justice in the security as enforcement context exists

66

67

as a means of punishment, especially when the desired form
of punishment—-prosecution--cannot be achieved because of
technicalities (gag., evidentiary limitations, economic con-
siderations, and self-image). Therefore, suggested hypo-
theses for future testing are that private justice in retail
firms is utilized primarily as a form of punishment and that
private justice is used when more visible forms of punish-
ment cannot be pursued. Those cases that supporttmese hypo-
theses should be operational examples of security as
enforcement. If the alternative hypothesis of private jus-
tice being utilized as an educational process (as opposed to
a punitive process) is supported, those cases should be
operational examples of security as protection. Of those
respondents interviewed in Arlington County, only one (rep-
resenting firm 19-21) could be classified as adhering to a
philosophy of security as protection.

That respondent was the Loss Prevention Director of
a supermarket chain in the Washington, D.C. area. His
responsibilities included the security operations in fifty-
eight grocery outlets. In his company, he stated that
employee dishonesty represented an estimated eighty percent
of the company's losses. Three percent was attributed to
shoplifting and seventeen percent to paper errors and mis-
handling. The check-out register was the problem area in
terms of employee dishonesty. The respondent described his
operational technique as loss prevention. He emphasized

that his concern was in preventing future thefts and losses

1”.” at. ...-11:19 I—.-_‘.'-_-_‘—?

68
as opposed to punishing past dishonesty. He added that he
usually retained employees suspected of dishonesty. The
employees were given a chance toxefomm on their own.
Whenever employees were "apprehended“ in relation to a dis-
honest act, the terms thief, theft, crime, or criminal were

avoided. In other words, the act was treated as misbehavior

and not as a crime. The characteristics of this approach F“
closely compare to the traits mentioned on pages 10 and 11 i
of this study regarding security as protection. g
Careful analysis of the theory of security as pro- ;
tection reveals that private justice is implied: it exists i

by definition. Since security as protection is non-punitive,
there is little expectation of prosecution of dishonest
employees. On the other hand, security as enforcement
implies a likelihood of prosecution since it is a highly
visible form of punishment. However, prosecution is only
one option available to the firm that subscribes to security
as enforcement. The other options, such as dismissal only,
fall into the realm of private justice.

This thesis was initiated by this researcher because
of the vagueness of the concept of private justice. After
analysis of the data gathered in the interviews and viewing
it in relation to the theoretical framework of this thesis,
this researcher believes that classification of firms by
their use of private justice is possible. By classifying a
firm's use of private justice coupled with the responses to

questions regarding the punishment of offenders, a firm's

69
philosophy of security can be identified. The criteria of
(a) the firm's disposition process regarding dishonest
employees and (b) the firm's view on punishment emerged as
indicative factors in this study in relation to this identi-
fication process. The multitude of factors affecting pri-
vate justice necessitates more than just an analysis of
apprehended offenders. Some type of measurement is necessary F“
to elicit the firm's view on punishment. Only in this manner
can one determine whether the use of private justice by a 4

given firm results from economic and social consequences

 

‘9‘. |_~'

or from the firm's philosophical view of the function of
security.

The above conclusion presupposes that all firms main-
tain a policy or philosophy on security procedures. An addi-
tional hypothesis must, therefore, be proposed. In the
absence of a set policy or philosophy on security procedures,
the security agent will decide upon a course of action that
he believes is justified under the given circumstances. This
justification is contingent upon (a) the seriousness of the
incident, (b) the amount of evidence, (c) the economics of
the situation (l;§-: Is it worth the time and effort to pros-
ecute the offender?), and (d) the agent's attitude, preju-
dice, perception, and emotional reaction to the situation.
Therefore, the final disposition of the incident rests upon
the agent's personality, knowledge of the law, and his own

definition of justice.

70
THE CONSEQUENCE OF PRIVATE JUSTICE

Much of the literature reviewed herein calls for
increased prosecution of dishonest employees and other
offenders in the business community. This proposal sounds
simple, but it presupposes (a) that most offenders are
detectable, (b) that there exists enough evidence to success-
fully prosecute the offenders, (c) that this would create a
better environment in the business community, (d) that it is

economically feasible, and (e) that the criminal justice

'Pfl‘w‘t-‘-O_’k- ...- JQLF.‘ .1
1 e .

system could accommodate the increased burden. One question
that has not been answered in this proposal is: What purpose
does prosecution serve? As Mr. Dornbaum stated: ”Most
employees who pilfer are basically honest, and once caught

"54

usually end their stealing career. Why prosecute some-
one that is already reformed? Research into the area of
recidivism of the dishonest employee might yield some answers
to the need for prosecution.

An approach to the issue of recidivism would be to
analyze the recidivism rate of dishonest employees in a retail
firm that retains the employee on his first offense. Do such
firms often regret their initial decision to retain the
employee or does Hr. Dornbaum's statement prove accurate?

Another method for researching this topic would be to gain

access to the data in a Stores Mutual Association (or similar

 

54Charles Dornbaum, ”Combatting Pilferage in Your
Store," Security Management, VIII (August, 1972), 21.

71
organization) and analyze whether an apprehended employee
from one member firm ever receives similar treatment from
another member firm.

Let us consider the other extreme: Why not process
every dishonest employee through private justice systems?
Needless to say, this also has many drawbacks. Professional
criminals would probably have a field day. By saying that F
professionals would be prosecuted as an exception, is to ~
presuppose that they are readily identifiable as professionaks 1

upon apprehension. What controls should be placed on such a

 

1y. -’. A- '

process to prevent an habitually dishonest employee from
going from one employer to another merely by being dismissed
for dishonesty. Is he not a professional thief? Maybe a
proposal of prosecuting repeaters of criminal behavior would
be practical. But how does one become a known repeater when
he was not prosecuted the giggt time? Unless the employee
was retained the first time, his present employer would prob-
ably not know of prior dishonesty. Central data banks, such
as Stores Mutual Associations, could provide some data in
terms of repeaters but such service is only as good as its
membership, input, and its legal limitations. If only a few
stores belong to such an association, its potential is
extremely diminished.

Proposals requiring legislative approval may be in
order. Would it be possible to create an administrative
process, statutorily recognized, to act in place of a public

judicial process? Could it be operated on a metropolitan

72

basis and be so organized as to protect the rights of both
the employer and the employee? Instead of punitive sanctions,
what about "conditions to retention” such as budgetary coun-
seling, vocational guidence, domestic advisement, and psychi-
atric counseling from social agencies?

One thing must be remembered: the economics of busi-
ness losses are felt by everyone: by the businessman through 9—

decreased revenues and the consumer through increased prices. a

Mr .J: an.“ 6.“

For this reason, everyone should be interested in the dis- .

position of offenses committed in the business community.

W‘i’m in.’.'.- '. 5.1

RECOMMENDATIONS

This discussion of private justice undoubtedly
raises more questions that it answers, which is not contrary
to the objective of this study. Private justice, in its
broadest sense, occurs daily in the business community. If
it did not, our social intervention agencies would be overly
burdened by the increased caseload. This is not to imply,
however, that the criminal justice system should be circum-
vented. On the contrary, the system should be improved to
accommodate the offenders that nggd official attention. An
initial step, therefore, is to determine what type of dis-
honest employees gggd official and societal attention.

The recommendations proposed here fall into two cate-
gories, practical and analytical. On the practical side,
efforts should be made on the part of the business community

and the local official agencies to discuss the problems that

73

are encountered in dishonest employee cases. Businessmen and
local prosecutors should hold seminars on the merchant's
legal authority in such situations. Attention and clarifi-
cation should be given to quasi-legal practices in disposing
of employee offender cases.

By initiating a dialogue on the issues surrounding
the use of private justice, various legislative proposals
might be initiated. One area of concern for legislative
review is that of a business entity as a "victim" of trust

violations. Legislatures should either take a firm stand to

‘QWM'T‘J" ~ ... -'-“~ flu-AWL?

provide easier access to the judicial system or to divert
such violations from the criminal process entirely. Easier
access could be provided by enacting strong, explicit, and
detailed merchant protection laws. Many such laws are on the
books but they are vague and subject to broad interpretation.
By establishing specific guidelines as to the limitations of
civil suits, merchants would have less fear in pressing
charges.

Diversion of trust violators from the criminal jus-
tice system is possibly a more attractive alternative. One
method would be to eliminate larcenies of under one hundred
dollars from the criminal statutes if the offense was com—
mitted by an employee during the course of his daily employ-
ment. The offense (loss) could be left to civil remedies.
This type of diversion would necessarily impress upon the
employer the importance of sound security measures. Such
diversion would be a strong incentive for employers to

improve their employee selection process as well as other

74
security procedures.

Another diversion technique might include devel-
opment and legislative approval of regional administrative
boards to analyze employee dishonesty cases and to recommend
dispositions. If this recommendation were acceptable to

both parties, the incident would be so remedied. If the

recommendation were not acceptable, a petition would be filed T‘
for a formal judicial hearing. The actual process of this i
diversion technique would depend upon the amount of authority 1
delegated to the board by the state legislature. g

In terms of analytical proposals, research into the 5

areas of prosecution, restitution, and recidivism is badly
needed. Such research needs to be conducted in terms of
economic and legal ramifications as well as social ramifi—
cations. Future research designs should also address the
effect that the insurance industry has on security procedures
in general and on dishonest employee dispositions as a speci-
fic target of inquiry.

If the use of private justice in the business com-
munity stems largely from the failure of other social proc-
esses, maybe changes are necessary. However, if the business
community is largely responsible for perpetuating the situ-
ation, it must also face up to reevaluation of its current
policies, philos0phies, and practices.

One recommendation that the business community might
consider is to retain dishonest employees in an effort to

rehabilitate them. Employers might determine that this

75

action is the most beneficial in the long run. If the
employee can refrain from further criminal activity, the
employer foregoes prosecution, dismissal, and replacement
expenses and should be able to recover most of the original
loss. If the employee does not reform, at least the employer
knows who to suspect and, if caught a second time, the
employer may be more prone to prosecute. #-

The recommendations presented here for the handling

77-—.-..,: ._ fl: . . .

urn-at -.~r-.-- ::

of dishonest employee cases are not meant to be exhaustive.
There is no reason why various alternatives to prosecution
and mere dismissal should not be developed and advocated by
employers, law enforcement agencies, social scientists, crim-
inologists, and anyone who has an interest in the matter.
Programs of an experimental design could be established to
determine the true benefits of such alternatives. Experi-
mental programs would allow for measurement of the economic
factors as well as the social and psychological factors.
Various business associations and research foundations may
even be willing to fund such experiments in order to provide
empirical validity to their recommended policies and guide-
lines. In the early 1960's the Polish government established
a number of Workers' Courts as an experiment in the adminis-
tration of justice in employee related offenses. These
courts had no formal procedure, but made use solely of the
pressure of public opinion within the given group. The mem-
bers of the court were elected from among the workers by their

colleagues. The court dealt with petty offenses and the

76
solution of the case did not necessarily exclude it from
being sent to public court. Authorization and establishment
of these courts was through the Polish Ministry of Justice.
The cases were directed to the court by the factory manage-
ment, the police, the public prosecutor, and tribunals. The
type of offenses handled by the Workers' Courts were primarily
petty theft, domestic disputes, and disorderly conduct. The r-
"penalty" imposed by the Workers' Court took the form of pub- ;
lic disgrace and shame. A study conducted on the Workers' (

Courts by Adam Podgorecki and his assistants concluded:

 

07..

The experiment with Workers' Courts was based on
the assumption that old means of mass repression are
becoming obsolete, and are no longer sufficient to
prevent certain forms of socially harmful behavior:
and that in such cases the pressure of opinion of the
occupational groups is more effective than legal
sanctions. On the whole, the inquiry confirmed these
hypotheses. It was also established that the effec-
tiveness of Workers' Courts depends on some additional
factors, mainly on the uniformity of public opinion
in the given occupational group.55

The outcome of this experiment is not known by this researcher
but the point is that similar experiments in this country are
conceivable. Additional inquiry into the Polish experiment
should give further evidence concerning its effectiveness.

The recommendations advocated here are predicated

upon additional research and investigation. The purpose of

 

55Vilhelm Aubert (ed.), Sociology of Law, (Baltimore:
Penguin Boods Inc., 1972), pp. 142-149, citing an excerpt
from Adam Podgorecki, ”Sociological Analysis of the Legal
Experiment Survey of the Workers' Courts," Polish Sociologi-
cal Bulletin, 1962, 118-123.

77
the recommendations are to stimulate interest and creative

thinking.

ah lu~ 11"..{7112—JJV“?

”rare, - m w -

Chapter 6

SUMMARY AND CONCLUDING COMMENTS

The private administration of justice is a social
phenomenon that has received relatively little attention in
the field of criminology. The present study attempts to
raise various issues that should be given further attention
and should be openly discussed as a social and economic

problem. '

 

The purpose of the study was to analyze, describe,
and define the concept of private justice in the retail
industry as it exists in Arlington County, Virginia. This
was attempted by interviewing managers and security directors
and by analyzing the process of disposition of dishonest
employees in ten different companies.

A review of the literature revealed diversified
approaches to the topic of private justice. Most items
reviewed addressed themselves to the question of prosecution,
and then usually only superficially. Only a few pieces of
literature were found that contained an adequate discussion
of the process of private justice. There was a noticeable
lack of empirical data regarding the policies and procedures
advocated in much of the literature.

The major findings in this study of Arlington

County's retail community is best expressed in terms of

78

79

hypotheses and indicators. Indications are that the majority
of retail establishments in Arlington County adhere to a
philos0phy of security as enforcement. However, the practices
and procedures employed in detectiong and disposing of dis-
honest incidents results primarily in dismissal of the
employee as the predominant form of punishment. Although
most respondents indicated a desire to prosecute known trust F3
violators, the data revealed low rates of prosecution. This
was explained by respondents as resulting from insufficient i

evidence for successful conviction.

“;WA‘ .n’u'. N. e "1 ‘_

The reliability of many responses to questions
regarding the firms' policies on the disposing of dishonest
employee incidents must be suspect. Although the respondents
were interviewed as representatives of the various firms, it
is probable that their personal views on the subject may
have influenced some of their responses. However, this,
of itself, is not undesirable since the personal beliefs
of the respondents are factors in the disposition process.

The more important findings of the study in terms of
research can be best expressed in hypotheses. From an
analysis of the data, it is hypothesized that private justice
in retail establishments is utilized primarily as a form of
punishment and is used when more visible forms of punishment
cannot be pursued. In other words, private justice in the
security as enforcement context exists as a means of punish-
ment, especially when the desired form of punishment--prose-

cution--cannot be achieved because of technicalities (i.e.,

80
evidentiary limitations, economic considerations, and self-
image).

From the data obtained in this study, it is suggested
that private justice be viewed from two standpoints: the
first being private justice resulting from a security as pro-
tection philosophy in which private justice is inherent: and
the second being private justice resulting from social conse- F-
quences and used as a form of punishment. »

Various other hypotheses are suggested by the data E

of this study. They relate to (a) employee morale, (b) the

 

WW .

effect of the polygraph on turnover rates, (0) the detection
and apprehension techniques utilized by security agents,

(d) the discretionary disposition of cases, (e) the recid-
ivism of offenders, (f) the consistent application of dis-
position procedures, (g) the competency of the security
agent, (h) the issue of the firm's public image, and (i) the
classification of firms according to their philosophical
view of the security function.

The conclusion reached by this researcher is that
private justice is classifiable: that by classifying a firm's
use of private justice in conjunction with the firm's view
of punishment, one can identify a firm as subscribing to
(a) no philosophy of security, (b) a security as protection
philosophy, or (c) a security as enforcement philosophy. If
no philosophy can be identified, a firm's disposition pro-
cedure may be considered ”inconsistent" or "discretionary."

In a sociological context, what this researcher has

81

hypothesized is that retail firms can be classified according
to their philosophy of the security function. He suggests
that the criteria of (a) the firm's disposition process and
(b) the firm's view of punishment are the primary variables
upon which this classification is based. For fear of over-
simplification, one must visualize the philosophical views of
security on a continuum. Security as enforcement lies at one
end of this continuum while security as protection lies at
the other end. From the data gathered by this researcher, it
is further hypothesized that most retail firms tend to fall
on the security as enforcement side of the continuum. It is
proposed that those firms which are classified as falling
toward the middle of the continuum would have an inconsistent
(discretionary) type of philosophy toward security. In light
of the other hypotheses suggested herein, it is further
hypothesized that the firms falling near the center of the
continuum (as classified by selected variables, i.e., dis-
position process, view on punishment, etc.) tend to have
lower morale, a larger turnover of personnel, and higher inter—
nal losses than those falling near the ends of the continuum.

This researcher strongly recommends additional
research and testing of the proposed hypotheses in this
study. The retail security fieldlxeds empirical data to
justify its philosophical principles. The economic factor
of these principles can only be determined aitgg the empir-
ical data has been analyzed. This researcher is of the

opinion that the principles justified by empirical data

‘Wud‘nfl nu t .w
|

82
will also be economically desirable. However, cost-analysis
studies of a firm's security procedures are very much in
order and could also be utilized to justify security prin—
ciples and procedures.

A number of recommendations were discussed in this
study which would make private justice less ”private" and
more "public." The criminal justice system should be
revamped to allow for easy access by the business community,
but the business community also must realize that it has a
social and moral obligation to both its employees and to
society as a whole. Diversion of trust violators from the
criminal justice system was suggested as another alternative
to prosecution. If employers prefer to function outside the
public judicial system in relation to dishonest employees,

. then they should be made entirely responsible for their
employees' actions.

Additional research is strongly urged by this author
as the best method of attacking the problems and issues that
are discussed within. It will also give empirical foundation

to security principles and procedures.

BIBLI OGRAPHY

‘?-::£_. ...‘p. on Luau-r” .lw
, ;
b

BIBLIOGRAPHY

Arlington Chamber of Commerce. Arlington Blue Book.
Arlington, Virginia: Cooper-Trent, 1973.

 

 

Aubert, Vilhelm (ed.). Sociology of Law. Baltimore: Pen- F
guin Books Inc., 1972. ‘

5

Cameron, Mary Owen. The Booster and the Snitch. New York: 1
Free Press of Glencoe, 1964. %
Camin, Louis J. "Some Projections for Business Security," 3
Security World, V, February, 1968. i

 

Curtis, Sargent J. Modern Retail Security. Springfield,
Illinois: Charles C. Thomas, 1960.

. Security Controi: External Theft. New York:
Chain Store Age Books, 1971.

 

. Security Control: Internal Theft. New York:
Chain Store Age Books, 1973.

Dornbaum, Charles. "Combatting Pilferage in Your Store,"
Security Management, VIII, August, 1972.

Edelhertz, Herbert. The Nature, impact and Prosecution of
White-Coilar Crime. Washington: Government Printing
Office, 1970.

Geis, Gilbert (ed.). White-Collar Criminal. New York:
Atherton Press, 1968)

Griffin, Roger K. "Shoplifting," Security Worid, X,
September, 1973.

. "Shoplifting in Supermarkets," Police Chief,
XXI. July, 1964.

Healy, Richard J., and Walsh, Timothy J. Industrial
Security Management. U.S.A.: American Management
Association, Inc., 1971.

Hemphill, Charles F. Jr. Security for Business and Industry.
Homewood, Illinois: Dow Jones-Irwin, Inc., 1971.

83

84

Jaspen, Norman, with Black, Hillel. The Thief in the White
Collar. Philadelphia: J.B. Lippincott Company, 1960.

Kakalik, James S., and Wildhorn, Sorrel. Private Police in
the United States: Findings and Recommendations. Santa
Monica, California: The Rand Corporation, 1971.

Knight, Paul Emerson, and Richardson, Alan M. The Scope and
Limitation of Industrial Security. Springfield, Illinois:
Charles C. Thomas, 1963.

 

Mersky, Robert L. ”The Dishonest Employee...A Behavioral
Problem," Security Management, XVII, July, 1973. p:

Miller, Delbert. Handbook of Reasearch Design and Social
Measurement. New York: David McKay Company, Inc., 1970.

"-I.;‘€i'.3 .21 ..

.II Ln.‘

Post, Richard S., and Kingsbury, Arthur A. Security Admin-
istration: An Introduction. Springfield, Illinois:
Charles C. Thomas, 1970.

 

‘Tmlh

Robin, Gerald D. ”Employees as Offenders: A Sociological
Analysis of Occupational Crime.” Unpublished Doctor's
Dissertation, University of Pennsylvania, 1965.

Smigel, Erwin 0., and Ross, Lawrence H. (eds.). Crimes
Against Bureaucracy. New York: Van Nostrand Reinhold,

 

 

1970.

"Sources of Inventory Loss in Your Organization to Identify,
Correct, and Control," Security Letter, II, December 11,
1972.

Steeno, David. "Loss Prevention in Retail Stores," Security
World, X, December, 1973.

Stessin, Lawrence. Employee Discipline. Washington: BNA
Inc., 1960.

Strauss, George, and Sayle, Leonard R. Personnel: The
Human Problems of Management, Englewood Cliffs, N.J.:
Prentice-Hall, Inc., 1972.

Sutherland, Edwin H. White Collar Crime. New York: The
Dryden Press, 1949. ,

The Thief You Pay. Los Angeles: Security World Publishing
Company, 1969

U.S. Chamber of Commerce. White Collar Crime: Everyone's
Problem, Everyone's Loss. Unpublished to date.
Washington,D.C.: National Chamber of Commerce, 1974-

85

U.S. Congress. Senate Select Committee on Small Business.
Crime Against Small Business. Document 91-14, 9lst Cong.,
1st Sess., April 3, 1969. Washington: Government
Printing Office, 1969.

U.S. Department of Commerce. The Economic Impact of Crimes
Against Business. Washington: Government Printing
Office, 1972

U.S. Department of Justice. Seminar on Urban Design,
Security and Crime. Proceedings of a National Institute
on Law Enforcement and Criminal Justice; April 12 and 13,
127 . Washington: Government Printing Office, 1973.

Virginia. Police, Crimes and Offenses and Motor Vehicle
Laws of Virginia. 2 vols. Charlottesville, Virginia:
The Michie Company, 1970.

I.

at-» ‘- I. _

 

‘1‘rl.\-n.~n'_‘- ’

APPENDICES

 

‘1": -f.- r 1

DATE
NUMB
PRE-

APPENDIX A.

Interview Schedule

 

 

 

 

 

 

 

 

F:
ER OF EMPLOYEES Full-time Part-time '
EMPLOYMENT SCREEN PROCESS: ____ Application evaluation
Interview ____ Credit/Criminal check ;
____ Background investigation ____ Polygraph ;
____ Other (specify)
DOES YOUR FIRM MAINTAIN A SECURITY FORCE? ___Yes ___No
If yes how many persons are employed is such capacity?
Full-time Part-time
If not, who is in charge of such matters?
WHAT TYPE OF CRIME RELATED ACTIVITY IS ENCOUNTERED MOST

OFTEN REGARDING YOUR EMPLOYEES?

(a) (b) (C)

HAS YOUR FIRM EVER TAKEN DISCIPLINARY ACTION IN LIEU OF
CRIMINAL PROSECUTION AGAINST AN EMPLOYEE UPON DIS-
COVERY OF WHAT WOULD BE CONSIDERED CRIMINAL BEHAVIOR
UNDER THE LAW? Yes No

 

 

IS THE DECISION TO PROSECUTE AN EMPLOYEE MADE AT THE
TIME OF APPREHENSION OR AFTER EXTENSIVE INTERVIEWING
AND DELIBERATION?

 

WHAT FACTORS ARE CONSIDERED IN THE DECISION TO PROSECUTE
OR RELEASE IF PROSECUTION IS NOT A PRE-DRAWN CONCLUSION
AT THE TIME OF APPREHENSION?

 

 

 

86

10.

11.

12.

87

REGARDING A MAJOR OFFENSE SUCH AS THEFT OR EMBEZZLEMENT
AGAINST YOUR FIRM, WHAT TYPE OF ACTION DOES YOUR FIRM
TAKE AGAINST THE EMPLOYEE?

 

 

 

 

IF YOUR FIRM DOES NOT PROSECUTE THE EMPLOYEE, WHAT
ACTIONS, IF ANY, ARE TAKEN AGAINST HIM?

 

 

 

BRIEFLY DESCRIBE YOUR PROCESSING PROCEDURE ONCE AN
EMPLOYEE HAS BEEN APPREHENDED. PLEASE DESCRIBE THE
VARIOUS FORMS THAT MUST BE COMPLETED FOR YOUR FILES.

 

 

 

 

 

WHEN A PERSON JOINS YOUR FIRM, WHAT CONDITIONS OF EMPLOY-
MENT ARE AGREED TO BY THE APPLICANT WITH REFERENCE TO
THE SECURITY PROCEDURES OF THE FIRM?

 

 

 

HOW DO YOU PERCEIVE THE ROLE OF YOUR SECURITY RESPONSI-
BILITIES? IS IT SECURITY AS PROTECTION OR SECURITY
AS LAW ENFORCEMENT?

 

 

 

IF IT WERE POSSIBLE TO SUCCESSFULLY PROSECUTE THE
MAJORITY OF YOUR DISHONEST EMPLOYEES, WOULD YOU DO SO?
IF NOT, WHY NOT?

 

 

 

DO YOU BELIEVE THAT THOSE EMPLOYEES DETECTED AND APPRE-
HENDED BY YOUR FIRM RECEIVE THEIR JUST REWARDS IN
TERMS OF PUNISHMENT? PLEASE COMMENT.

 

 

 

13.

14.

88

DOES YOUR FIRM EXCHANGE INFORMATION (OFFICIALLY OR
UNOFFICIALLY) REGARDING DISHONEST EMPLOYEES WITH ANY
OTHER FIRMS IN THE COUNTY? IF SO, UNDER WHAT

 

CONDITIONS?

 

 

ARE YOU AWARE OF AND FAMILIAR WITH SECTION 18.1-127 OF
THE VIRGINIA STATE CRIMINAL CODE? IT REFERS TO
EXEMPTIONS FROM CIVIL LIABILITY IN CONNECTION WITH
ARREST OF SUSPECTED PERSONS.

 

 

 

The following questions were asked as a matter of

routine also but were not contained on the guide sheet sub-
mitted to the respondent.

15.
16.

17.
18.

19.

DOES YOUR FIRM EMPLOY JUVENILES?
HAVE THEY BEEN A PROBLEM IN TERMS OF DISHONESTY?
ARE YOUR EMPLOYEES MEMBERS OF A UNION?

HOW MANY CASES OF DISHONESTY DID THE FIRM ENCOUNTER IN
1973?

IN HOW MANY OF THOSE CASES DID YOU SEEK PROSECUTION?

W. L at]; ‘7v=~Y-N nfl.‘ 214':me LT.
I

APPENDIX B.

Related Statutes from the
Criminal Code of Virginia

18.1-126. CONCEALING OR TAKING POSSESSION OF MERCHANDISE:
ALTERING PRICE TAGS: TRANSFERRING GOODS FROM ONE CONTAINER
TO ANOTHER: COUNSELING, ETC,, ANOTHER IN PERFORMANCE OF SUCH
ACTS. whoever, without authority, with the intention of
converting goods or merchandise to his own of another's use
without having paid the full purchase price thereof, or of
defrauding the owner thereof out of the value of the goods
or merchandise, (1) willfully conceals or takes possession
of the goods or merchandise of any store or other mercantile
establishment, or (ii) alters the price tag or other price
marking on such goods or merchandise, or transfers the goods
from one container to another, or (iii) counsels, assists,
aids or abets another in the performance of any of the above
acts shall be deemed guilty of larceny and upon conviction
thereof shall be punished as provided by 18.1-126.1. The
willful concealment of goods or merchandise of any store or
other mercantile establishment, while still on the premises
thereof, shall be prima facie evidence of an intent to con-
vert and defraud the owner thereof out of the value of the
goods or merchandise.

18,1-126,1. PUNISHMENT FOR CONVICTION UNDER 18.1—126.
(a) Any person convicted for the first time of an offense
under 18.1—126, when the value of the goods or merchandise
involved in the offense is less than one hundred dollars,
shall be guilty of a misdemeanor and shall be punished by
a fine of not less that the value of the good or merchandise
involved nor more than one thousand dollars, or by confine-
ment in jail not less than five days nor more than twelve
months, or both, in the discretion of the jury or of the
court trying the case without a jury.

(b) Any person convicted of an offense under 18.1-
126, when the value of the goods or merchandise involved in
the offense is less than one hundred dollars, and it is
alleged in the warrant or information on which he is convicted
and admitted, or found by the jury or judge before whom he is
tried, that he has been before convicted in the Commonwealth
of Virginia for the like offense, regardless of the value of
the value of the goods or merchandise involved in the prior

89

 

9O

conviction, shall be confined in jail not less than thirty

days nor more than one year: and for a third, or any subse-
quent offense, he shall be confined in the penitentiary not
less than one nor more than two years.

(c) Any person convicted of an offense under 18.1-126,
when the value of the goods or merchandise involved in the
offense is one hundred dollars or more, shall be guilty of
a felony and shall be punished by confinement in the peni-
tentiary not less than one nor more than twenty years, or,
in the discretion of the jury or the court trying the case
without a jury, by confinement in jail not less than thirty
days nor nore than twelve months and by a fine of not less
than the value of the goods or merchandise involved but not
more than one thousand dollars.

18.1-122. EXEMPTION FROM CIVIL LIABILITY IN CONNECTION WITH
ARREST OF SUSPECTED PERSON. A merchant, agent or employee of
the merchant, who causes the arrest of any person pursuant to
the provisions of 18.1-126, shall not be held civilly liable
for unlawful detention, slander, malicious prosecution, false
imprisonment, false arrest, or assault and battery of the
person so arrested, whether such arrest takes place on the
premises of the merchant, or after close pursuit from such
premises by such merbhant, his agent or employee, provided
that, in causing the arrest of such person, the merchant,
agent, or employee of the merchant, had at the time of such
arrest probable cause to believe that the person committed
wilful concealment of goods or merchandise.

18.1-128. "AGENTS OF THE MERCHANT" DEFINED. As used in
this article "agents of the merchant' shall include attend-
ants at any parking lot owned or leased by the merchant, or
generally used by customers of the merchant through any con-
tract or agreement between the owner of the parking lot and
the merchant.

18.1-303. CONCEALING 0R COMPOUNDING OFFENSES. If any per-
son knowing of the commission of an offense take any money
or reward, or an engagement therefor, upon an agreement or
understanding, expressed or implied, to compound or conceal
such offense, or not to prosecute therefor, or not to give
evidence thereof, he shall, if such offense be a felony, be
confined in jail not more than one year and fined not
exceeding five hundred dollars: and if such offense be not
a felony, unless it be punishable merely by forfeiture to
him, he shall be confined in jail not exceeding six months
and fined not exceeding one hundred dollars.

 

TY

 

MITITIIWINIHISIMITWEWWIVIWH'HIH WIRES
3 1293 03046 6194