Category Archives: Industry News

NLRB Considers Scope of Employee Witness Statements

The National Labor Relations Board (NLRB) has invited interested parties to file a brief in a case, Stephens Media LLC d/b/a Hawaii Tribune Herald, which will assist the board in determining the scope and treatment of employee “witness statements.”

In previous decisions, the NLRB held that an employer does not have a duty to furnish witness statements to a union representative. The Stephens Media LLC case involves a reporter for the Hawaii Tribune Herald who was fired for insubordination after he attempted to accompany a circulation clerk, who was a shop steward, when she was called into a meeting with a supervisor.

The union requested all information considered by the company in firing the reporter. But the company only turned over the reporter’s discharge letter and personnel files. It did not provide information given by employee witnesses interviewed during the company’s investigation of employee misconduct. 

If the NLRB finds that employers are required to turn over confidential witness statements, employers’ ability to conduct effective investigations may be compromised. An amicus brief has been submitted to the board by Society for Human Resource Management (SHRM), the Council on Labor Law Equality, and the U.S. Chamber of Commerce. It supports previous NLRB cases holding that there is no duty to furnish witness statements. To review a copy of the brief, filed by SHRM, click HERE.

Get insight from a CFO who has “been there and done it”

On Wednesday, April 13th, attendees at the Retail Industry Leaders Association’s Loss Prevention, Auditing, and Safety Conference will hear from a CFO who has first-hand experience in dealing with retail loss prevention both as an executive and “on the floor.”  Neil Watanabe, CFO and Executive Vice-President for Anna’s Linens actually started his career as a “floater” at a department store chain.  For those who may not know what a “floater” is, it is an employee who goes around and relieves other employees so they can go on their break.  As a result, a floater is working in the shoe department one minute, the housewares department a few minutes later, and then might finish up in the jewelry department.  According to Watanabe, this was the starting point for him to learn about the various departments in the store and learn to become a well-rounded employee.

Since that humble beginning, Watanabe has moved on to be a senior executive with several leading retailers and has a reputation for being a strong supporter of Loss Prevention.  “I’ve always had a special place in my heart for Loss Prevention and believe they can contribute greatly to any retailer’s success,” Watanabe told me when I had a chance to speak with him last week about this session.  In this session, he will share his insights about what being a well-rounded business executive means to him and how Loss Prevention executives can improve their influence with their own organization.  He will also share some case studies where he will give some real-life examples of how he has approached Loss Prevention challenges in his career.

Don’t miss this opportunity to learn from an executive who understands our business and wants us to be successful!  This general session starts at 8:30 a.m. on Wednesday.

IBM Pays $10 Million to Settle FCPA Case

IBM has agreed to pay a settlement of $10 million to settle civil charges that it bribed Chinese and South Korean government officials to obtain computer equipment contracts.  The The Wall Street Journal that the SEC is suing the company over cash bribes that violate provisions of the Foreign Corrupt Practices Act (FCPA).  IBM did not admit to wrongdoing, but did say it has higher ethical standards for its employees and had taken “appropriate remedial action,” according to the WSJ report.

The SEC’s suit accuses employees in the South Korea offices of the tech giant of paying government officials $207,000 and providing travel, entertainment, and gifts of cameras and laptops in exchange for a contract to supply PCs and mainframes to the government.  The SEC complaint also alleges that more than 100 employees and two top officials of IBM in China paid for the vacations of Chinese government representatives, through slush funds established at travel agencies.

This case raises the issue of how difficult it is to make your corporate ethics statement a reality around the world.  It is almost certain that IBM maintained a code of ethics that would prevent this type of behavior but this did not prevent “widespread” bribery involving over 100 employees.  PCG Global now offers FCPA/Ethics training targeted directly to front-line employees who have to make decisions about bribes, ethics, and corruption in their normal course of work without direct supervision.  Contact us to find out how we can customize and deliver this training to your organization in your most critical areas of operation.

LSI SCAN Workshop at RILA Conference – Complimentary Registration

At the upcoming Retail Industry Leaders Association’s Loss Prevention, Auditing, and Safety Conference, attendees will have the opportunity to attend a free four-hour workshop on the SCAN (Scientific Content Analysis) technique for detection of deception.  I had a chance to talk with this session’s instructor, Tim Bos, who is with the Laboratory for Scientific Interrogation (LSI).  Mr. Bos first learned the SCAN technique while a police officer with the Clovis, CA Police Department.  When SCAN was introduced in their department in 1994, confession rates increased by over 20% and Bos was hooked.  Since retiring as a Captain with the force, Bos has become an instructor with LSI and traveled the world teaching this program.

“One of the things that many investigators misunderstand is how to get useful information.  Their first instinct is to ask lots of questions.  But, questions produce responses, not necessarily information.”  The SCAN technique emphasizes the importance of getting an open statement from the subject, in their own words, before you ask any questions.  This written statement can then be analyzed from beginning to end.  Every word in a subject’s or witness statement – the pronouns and connections, the subjective time, the changes in language – will “talk” to you and provide you with answers.  This session will introduce you to the concepts and give you some new tools to take back to your job.

Not only can these techniques be applied to the analysis of written statements, the same principles apply to interviews and interrogations.  Once you go through this session, you will pay more attention to the semantics and structure of oral narratives and statements.  In fact, Mr. Avinoam Sapir, the developer of the SCAN, has used these techniques to analyze the verbal statements and interviews of individuals in many high profile cases to identify what they are really saying and what they are leaving out.  A successful investigator has multiple tools in their tool kit.  Thanks to RILA for providing the opportunity to be exposed to this new tool!

If all of this wasn’t enough reason to attend the conference, all attendees to the RILA conference are eligible for continuing education credits (CEU/CPE).  In addition, attendees of this SCAN workshop will earn an additional four credits towards CFI (Certified Forensic Interviewer) recertification!

This session will be held on Thursday, April 14th, from 1:00 p.m. to 5:00 p.m.  To guarantee your place in the workshop, RSVP today to Liz Benson at liz.benson@rila.org.

Guest Blog: Eric White on Supply Chain Security

Supply Chain Security: Vulnerabilities and Loss-Combating Measures Retailers Can Take

The retail supply chain is subject to great vulnerability when it comes to potential losses.  The risks are obvious: goods being transported across and even between countries, changing hands several times.  Due to the large volume of goods, it is simply impossible to check every container and pallet of goods.  Over long periods of time, items are loaded and unloaded at several different locations, increasing the likelihood of damage.  All of these conditions increase the risk of loss to the retailer. 

To complicate matters more, there is no single supply chain configuration across retail.  Large retailers may have regional warehouses, distribution centers and corporate-owned truck fleets, whereas small retailers may rely exclusively on direct store deliveries (DSD) by vendors.  The risks in each of these situations are different and require targeted solutions.  Top concerns include physical security – as forklifts and high stacks of heavy inventory can cause accidents –  the security and integrity of merchandise during transport, proper receipt and verification of the right kind and amount of product at the store, and the oversight of vendor visits to prevent theft and/or administrative errors.

Retailers must take decisive steps to prevent potentially crippling losses that occur before the merchandise even reaches the store shelves.  The following are some strategic ways that retailers can help prevent supply chain losses.

Create processes

Building processes that impose consistent verification and corrective action is one of the most effective ways to battle losses occurring in the supply chain.  By narrowing the window of opportunity for purposeful or inadvertent losses to occur, retailers successfully reduce their risk and identify “red flags” before significant losses result.  For example, by having a merchandise receiving process by which particular employees are assigned and trained to manage the receipt of deliveries and compare item or pallet counts with invoices, there is a greatly reduced opportunity for losses associated with incorrect amounts or types of goods received. 

Verify those processes

It’s not enough to just put processes in place, but critical to continually monitor them for consistent implementation and proper execution.  A combination of regular and unannounced audits is a great way for retailers to determine with certainty whether or not recommended processes are being implemented properly throughout all locations.  Audits should be designed, not only to verify proper implementation, but to help pinpoint the root causes of problems in the supply chain.  When audits indicate a process failure, retailers can take action by assigning immediate follow-up tasks and notifying key players within the organization about problems that require further investigation.  Taking immediate action based on audit results is important to inciting change. 

Video surveillance provides another great way to verify that employees are properly trained and following-through with recommended procedures.  Without constant verification, processes may be little more than symbolic gestures on paper.

Control what you can

Another good strategy is for retailers to determine if there are parts of the supply chain management process that can or should be brought in-house or outsourced to prevent losses.  For example, by centralizing shipments to a warehouse, stores can receive complete loads, avoiding confusion that frequently occurs with the unloading of trucks that contain shipments for multiple destinations.  By ordering larger shipments to supply more stores, retailers benefit from larger volume orders, bigger discounts and less hassle.  In addition, if they use their own trucks to deliver items from the warehouse to the stores, they can potentially reduce risk of loss due to theft. 

Hiring a separate LP team to manage supply chain risk and losses could also be a good move.  Since the problems associated with supply chains are somewhat unique, they require dedicated solutions and resources to ensure product integrity until it reaches its place on the store shelf. The real key is to provide visibility into the problems.

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We are pleased to feature this guest blog by Eric White from Wren Solutions.  Eric has over 20 years of experience in our industry and currently serves director of retail strategy for Wren.  White maintains his regular blog at http://www.wrensolutions.com/LPXtra_blog/ and can be reached via email at eric.white@wrensolutions.com.