The Employee You Terminated Won’t Return Company Property. Now What?

By Marylou V. Fabbo - Skoler, Abbott & Presser, P.C.

January 24, 2018

Have you ever terminated someone only to have them hold hostage your company’s property?  Here’s a common scenario:  Someone failed to refill the water cooler.  When Joe went to make his tea, he became irate and threatened Jamie, who is known for leaving the jug empty.  Joe had a similar outburst last week when someone (accidentally) picked up his documents at the printer, and a few weeks before that Joe assaulted a vending machine that took his dollar.  You have made up your mind:  Joe has to go, but he’s got a company laptop at home.  Whether it be a cell phone, iPad, laptop, or some other property, employers are rightfully annoyed that, in Massachusetts at least, you can’t refuse to provide their final paycheck unless they bring back what belongs to your company.

Can You Deduct the Value of the Unreturned Company Property from an Employee’s Final Paycheck?

The Massachusetts Wage Act requires employers to pay employees in full on their last day of employment.  It’s illegal to refuse to pay an employee until the employee returns keys, badges or whatever other company property the employee may have at home.  To make things worse, the employee may sue your organization related to his or her termination—perhaps even using your property to search for a lawyer!  So does an employer just have to grin and bear it?  According to a federal court in Massachusetts, maybe not.

Employer Wins Claims Against Employee for Retaining Laptop and Computer Files

At issue in this case was a MacBook Air Laptop in the possession of a former post-doctorate fellow (“employee”) working in a lab at Boston Children’s Hospital.  The employee asked a research assistant responsible for procuring equipment to rorder him the MacBook.  He claimed that his supervisor had authorized it as a gift for the employee to thank him for help with a grant submission.  The laptop was paid for by the hospital and delivered to the employee, who registered it with the hospital.  Shortly after the employee’s termination, the hospital sent him a written request for the return of the laptop, including “all files, hard drives and metadata.”  The employee refused to return the laptop.  Also, he deleted files claiming that they were exclusively personal.  The employee and others filed lawsuits against the hospital claiming discrimination among other things, and the hospital counterclaimed for conversion and replevin related to the laptop.  The hospital was successful on its counterclaims without even having to go to trial.

So What the Heck are “Replevin” and “Conversion”?

Conversion is the “exercise of dominion or control over the personal property of another.”  Stated otherwise, conversion  happens when someone refuses to return another’s property when they ask for it back and, as a result, the person owning the property suffers some sort of damages.  Replevin means that goods that are worth more than $40 were unlawfully taken from their owner’s possession or were unlawfully detained when the owner had the right to possession.  Based on a number of factors, the court concluded that the laptop and its files belonged to the hospital and found for the hospital on both claims.  The case is The Children’s Hospital Corporation d/b/a Boston Children’s Hospital v. Isin Cakir.

What Other Means Can an Employer Use to Get Its Property Back?

An employer doesn’t have to wait to be sued to assert claims for replevin or conversion.  Depending on the value of the property at issue, an employer may be able to file a small claims action against a former employee who won’t return its property.  Also, in some circumstances you may be able to put an employee on an unpaid suspension pending the return of property.  When the property is returned, the employer could then terminate the employee and pay him or her the final paycheck.