Am I legally obligated to tella business owner that the other business owner is doing something that I feel wrong?

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Am I legally obligated to tella business owner that the other business owner is doing something that I feel wrong?

I’m a bookkeeper for a small company that has 2 owners. If I see something that that one owner is doing that the other doesn’t know about and I believe it to be wrong. Am I legally obligated to tell the other owner even though I am told never to talk to him by the owner in question?

Asked on February 13, 2012 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

It depends on whether the wrong doing implicates you in some way, even if only in not bringing to light something which a bookkeeper should. The law does not generally impose an obligation on a person to report another's wrongdoing; so, say that owner 1 is sexually harassing another employee, is passing client/customer information to a family member who competes with the business, or is driving drunk in the company car--you would not need to report these wrong doings. They do not implicate your role as bookkeeper.However, say that owner 1 is embezzling money, is charging his personal, non-business expenses to the company or otherwise falsifying expenses, or is falsifying time sheets so a friend of his is paid for not working; in those cases, it is your obligation as a bookkeeper to report these issues. If you fail to do so, it's far from impossible that you could face liability, either based on a negligent failure to do your job, or based on a belief that you were involved in the wrong doing. While you may still not be affirmatively obligated to report, the fact that you could face personal liability means it would be potentially very unwise to not bring owner 1's actions to owner 2's attention.

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