Personal use of company expense accounts or outright fraud on company expense accounts is not that uncommon and it usually results in severe consequences. Most businesses will not put up with employees who exhibit dishonesty in their basic financial dealings. Even minor inconsistencies, under circumstances where there is little or no doubt about intent, can result in immediate termination for even senior executives.
But the same general rules that apply to any employee discipline situation apply here as well. Discipline that seems unfair or that is performed in a way that casts doubt on the employer's motives can have significant blowback.
Such was the recent case of a California JP Morgan account manager who was terminated over a business expense of less than $700 for a deli tray that was ordered as part of a Super Bowl party. JP Morgan terminated the executive, a 20-year employee with major account responsibility, because the company believed he had expensed food for a private gathering for family members to his $10,000 personal corporate expense account.
The circumstances surrounding the actual party are a little unclear. The executive invited a dozen people but only two or three actually showed up. The people who did show were related to the executive, although the key guest was registered on JP Morgan's potential client list and apparently was a bona fide business contact. Given the uncertainty, you would think that a company would think carefully before terminating a two-decade, recently promoted senior manager over an expense item that was less than 10% of his annual account expense. Apparently, that didn't happen. Instead, during the internal probe of the claim, the company began assigning the executive's clients to other brokers before he was even formally interviewed about the expense issue.
The executive's wrongful termination claim went before an arbitration panel under the FINRA (Financial Industry Regulatory Authority) rules for employment disputes. The arbitrators took a dim view of the bank's actions, as evidenced by the $4.2 million award to the executive, as well as an order recommending the expungement of the bank's reason for termination and termination explanation in the official records.
JP Morgan indicates it will appeal the arbitration decision, but that will be an uphill fight. I suspect there is some serious reflection about personnel decisions based on expense accounts taking place in the bank's human resources department as a result of this decision.
