If demoted due to the criminal actions of an employee, can you hold that employee liable for your lost wages, etc?

UPDATED: Apr 20, 2011

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If demoted due to the criminal actions of an employee, can you hold that employee liable for your lost wages, etc?

My wife was a branch manager for a local bank. She was recently demoted from her job of 20 years because 1 of her employees committed fraud against some of the banks customers. There was nothing my wife could do as what the employee was doing was under the limit that she had to present items to her supervisors. The amount she stole from the banks customers was very high, over $300,000. For her actions, my wife was demoted to Assistant Manager and they cut her pay $30,000 a year. Can we sue the employee for loss of wages? Damages?

Asked on April 20, 2011 under Employment Labor Law, California


MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I don't understand why they demoted your wife, if there was no way your wife could have known this was occurring. If the bank demoted your wife because your wife should have done proper accounting or should have watched the employees more closely or made sure the numbers panned out at each shift, I understand. If the employee was the cause of this, you can certainly attempt to sue the employee but understand in California, employment is at will. So... the bank could have just as easily fired her with or without cause. If the employee owed your wife a duty (could be easy to argue), then perhaps you might be able to sue the employee and the bank's insurance company and the bank, since technically the employee was committing fraud while on the job. Be careful to tread lightly so you and your wife may wish to speak to a labor lawyer and the California Department of Labor and Equal Opportunity Commission about what the bank did to your wife. It may be that a nuisance in the law prevents this sort of retaliation by the bank against your wife. If so, she might be able to get her old position back and any back wages.

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