One of the less frequent issues an employer might encounter is a malicious prosecution suit. Malicious prosecution suits can occur whenever someone sues or prosecutes criminally another without reasonable (what the courts call "probable" cause). Such suits are rare but they happen and when successful are typically costly. After all, if you were maliciously and wrongly accused of a criminal act and spent a few nights in jail, wouldn't you want a lot of money in recompense?
There are several defenses to such suits, though the details vary from state to state. A common one is the requirement that the prior suit or prosecution be terminated in the suing party's (in the second suit) favor. The Seventh Circuit spent some time recently discussing some quirks (I suppose) of Illinois law on this point but (like the court) I see no need to discuss that in detail here. What was of more interest was how the court resolved another defense, when an employer has probable cause to complain about an employee's criminal misconduct.
Probable cause is not a difficult concept though it should not be confused with "reasonable suspicion," the standard (of information) employers must have before requiring an employee take a lie detector test nor should it be confused with the employment discrimination context of "honest belief."
The legal definition of probable cause is “exist[s] where the known facts and circumstances are sufficient to warrant a man of reasonable prudence in the belief that contraband or evidence of a crime will be found,” Ornelas v. United States, 517 U.S. 690, 696 (1996); Illinois v. Gates, 462 U.S. 213, 238 (1983). That doesn't really say much in the employment context (but it is a start). Here is what happened.
Yuming Deng worked for Sears Roebuck as a statistical modeler compiling computer data for financial purposes. After a heated performance appraisal dispute, Deng took leave claiming he was disabled. He nevertheless kept showing up at work even though he was on leave and Sears policy prohibited this. Each time, Sears told him to go home. On one visit, Deng deleted some of the data he had compiled (there appeared to be no dispute about who deleted the data). Sears asked Illinois to prosecute (for tampering with computer files without permission) but the prosecution was dismissed (the court concluded) in Deng's favor.
Sears won, however, because, the court found, it had probable cause to ask Illinois to prosecute Deng on the basis that Deng deleted the data without asking, he was on leave at the time he deleted the data, and shortly after the criminal case started, Deng fled Illinois. Deng argued he thought he had the right to delete the data because it was not needed but the court said that was rediculous, given that Sears had spent $40,000 to recover it.
What intrigued me was how the court incorporated the fact that Deng was on leave at the time he deleted the data. Being on leave, Deng could not possibly known whether or not Sears needed the deleted data so all of his arguments missed the point. As the court said, "A person’s ability to explain away seemingly damning facts does not negate the existence of probable cause, even though it might provide a good defense should the case go to trial."
Deng's malicious prosecution suit suffered a fate many such suits suffer - dismissal prior to a trial. Employers that make rational decisions based upon the observed facts will probably also be able to get similar suits dismissed.
Also, Sears aided the outcome by enforcing its "don't come to work while on leave" policy. Realistically, I expect few employees want to come to work while on leave but in today's computerized workplace, the lines between when an employee is "at work" tend to get blurred. Suppose Deng had had remote computer access to his data?
So, clearly define your rules on when an employee may work (perhaps requiring advance approval) and may not work while on leave and then avoid the temptation to overlook them. Also, if the employee is on an FMLA leave, then err on the side of taking a hands off approach altogether.