Do I have any legal recourse if an employee intentionally accepted a mistaken double payment??

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Do I have any legal recourse if an employee intentionally accepted a mistaken double payment??

I am a small business owner. I recently wrote a check to one of my employees for labor, and because a vendor did not pay me, there was not enough money in the account to cover the check and it was returned unpaid. As soon as I realized, I contacted the employee, deposited cash to cover the check and re-issued a 2nd check to him. Days later I saw both the first and the 2nd check had cleared my account. It turns out the employee had gone to a check cashing store the 1st time, and, in fact, had the cash when I wrote him the 2nd check. He cashed the 2nd check at my bank and the check cashing store resubmitted the 1st check for payment. This employee accepted the 2nd check knowing he’d already been paid.

Asked on June 1, 2013 under Business Law, Wisconsin

Answers:

S.L,. Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

You can sue the employee for fraud.  Fraud is the intentional misrepresentation of a material fact made with knowledge of its falsity and with the intent to induce your reliance upon which you justifiabily relied to your detriment.  In other words, the employee committed fraud by intentionally obtaining the double payment and making the false representation to you in order to obtain the second check.

Your damages (monetary compensation you are seeking in your lawsuit) would be the amount wrongfully obtained by the employee.

Depending on the amount involved, you may be able to file your lawsuit in Small Claims Court.  Your damages should also include the court filing fee and process server fee.  After obtaining a court judgment against the employee, you might also consider pursuing a wage garnishment if the employee does not pay.

In addition to the case for fraud discussed above, you might want to consider firing the employee.

 


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