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Posting anonymously obviously...this is a very sticky situation.

So I manage a sales team and an intern on my team often takes clients out, both during and after working hours. I just got an expense report for $700 from our company credit card at a notorious strip club. It's the same night my intern was with a client, and I'm quite sure my intern took the client there. So I'm very concerned because:

  1. It's an expense over $500, that means my boss has to sign off on it too.
  2. My boss is very conservative.
  3. Even without my boss I don't think I can justify that expense.
  4. This client is relatively important, the only reason he was with our intern is that they had previously hit it off and my intern has acted responsibly to date. We're talking 7 figure deal.
  5. The client is religious, not the type I would expect to be seen at that sort of establishment. And surely he doesn't want word to get out.

Anyway, I was kinda caught off guard by this whole situation. Any ideas?


Update:

Talked to intern, it happened. Reviewed expense policy, no official policy on this. Talked to boss, intern fired, I'm on probation, no interns entertaining clients after hours, boss now approves all venues in advance. Boss will salvage deal personally, thinks we can use this as leverage.

closed as off-topic by Mister Positive, Draken, Chris E, gnat, scaaahu Aug 17 '17 at 14:35

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  • 20
    After your update: Look for a new job, your boss is an idiot. Seriously. He may not like it, but sans proper policy the whole firing is way out of line. Even with policy firing the intern is the most idiotic thing to do - he was put into a ridiculous situation and now gets the blame for handlingto his best ability. You work in a ridiculous out of common sensep lace. – TomTom Aug 17 '17 at 18:00
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    This is like that company a few months back that fired a new hire because he deleted a huge part of their database and it was irrecoverable. This is 100% managements fault for giving an intern this much influence. And without explicit guidelines on what kind of establishments to patronize, the intern doesn't even appear to have broken any rules. He just made a bad call. – mwbl Aug 17 '17 at 20:38
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    Update - "Boss will salvage deal"..... what, exactly, put the deal at risk? Or is boss just making it even more dramatic because boss is pissed off? You guys popped for $700 in singles and booze for the client at the strip club. I'd think that deal was in good shape. – PoloHoleSet Aug 18 '17 at 15:00
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    Update seems about right. You put way too much trust in an intern. interns should ALWAYS be supervised, that's part of the deal. It is common sense you do NOT conduct business at strip clubs, and you do NOT use corporate cards there. – Bill Leeper Aug 21 '17 at 19:50
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    "use this as leverage".. so your boss intends to blackmail the client?! – ThiefMaster Aug 26 '17 at 9:29
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Since it's on the company credit card, there's exactly zero chance of "sweeping it under the rug".

Step 1: Talk to the intern and confirm the facts. Did the intern actually incur that expense?

Step 2: Talk to the boss - he's going to find out anyway, so it's in your best interest to bring it up before he discovers it. For a 7 figure deal he may find a way to overlook a "one time mistake"

Step 3: Review your expense policies to make sure there is no ambiguity - either that sort of thing is permitted or it isn't (some companies consider that a normal cost of business, while others won't).

As for the client, make darn sure that word of this doesn't get out. Try to avoid using his name even internally when discussing this matter. If word does get out and he is embarrassed, you're pretty much guaranteed you'll lose his business. It's very hard to get new clients, but frighteningly easy to lose them.

  • 4
    And do step 1 without prejudging. You put the intern in a very difficult position. I known a salesperson for who it was normal to be asked to go to stripclubs or even hookers (in certain regions). For all you know the client came with the idea. Him being religious does not mean he will not go to a stripclub, more religious people done far worse. He is the one paying for the deal, he would have refused to go if he disliked the idea of going to a stripclub. The intern might have found this disgusting, but what was he to do? Risk a 1.000.000 + deal? – Jeroen Aug 17 '17 at 14:01
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    @Jeroen I'll tell you what he was to do. "You want to go to a stripclub? I don't know, let me call max really quick and see what he has to say about it." – Chris E Aug 17 '17 at 14:10
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    @ChristopherEstep Sure that he was suppose to do, but is it really that easy to think of it when you are an intern, out with a client who will spend more then you most likely earn in your whole life? Age might also come into play as being yough make you more impressionable. The client might have told it was normal and he always does this. Just warning it ain't as black and white. In fact depending on the situation he company might actually have to apologise to the intern for putting him in the situation. – Jeroen Aug 17 '17 at 14:21
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    @Jeroen I wouldn't be surprised if the client saw him as a rube and just took advantage of him, which goes to my comment under the question about not letting interns entertain clients alone. That's doing a disservice to the intern as well because he can't learn the right way to entertain clients without being taught. That's why they're interns. They're to learn. – Chris E Aug 17 '17 at 15:00
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    IMO, Step 3 maybe ought to come first. You may be best served by making sure you know company policy in detail before having conversations with both the intern and your boss. – djohnson10 Aug 17 '17 at 17:06
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If there's no current policy against this, then whoever did it is not in the wrong if they were entertaining a client.

CHANGE THE POLICY ASAP

Yes, I know that's acting after the fact, but nothing can be done.

Then, find out who did it and who accompanied him. Don't accuse anyone of anything until you know.

Do NOT talk to the client.

Speak to all company parties involved to understand what went on.

Then, finally go to the manager who needs to approve and express that your company will want to change the policy.

Impress upon your manager that you don't want to embarrass a big client by causing any sort of stir.

  • Yes, good point. Like I said in an other comment. Depending on region (and maybe branch) the stripclub is not that uncommon to go to with a client (from what a sales person told me at least). – Jeroen Aug 17 '17 at 14:26
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First, the intern likely is unaware that such things are problematic. You should first sit him down and explain that you see this charge and why it might be a problem and get his side of the story. Since you saw this from the credit card company, it is possible someone else had the charge or he did not know he was not supposed to use it for such purposes (if indeed that is the case in your company.) He might not even know he should check with you concerning any expenses over a certain limit before he makes them. (I personally wouldn't let an intern have a company charge card unless they had to travel.)

Now you will need to tell your boss about this because the charge will need to be paid. You will likely have to tell him that you are at fault because you didn't make the guidelines clear enough for the intern.

You also need to plan who will pay it if the boss doesn't approve it as seems likely from what you wrote. Given this is an intern who likely did not know that this was something unlikely to be approved, I think the burden of paying this should fall on you as the person who gave him a credit card without making sure he knew what his limits were.

Now if the intern said, that he knew he shouldn't be there and that those were his personal expenses and not client entertainment, then he should have the cost deducted from his pay. But if he had no idea that this was something he shouldn't do, then this is YOUR mistake not his.

If he did take the client to a strip club, then you need to find out whose idea it was. If it was the client's idea, then tell the intern he should check with you before spending that kind of money or going to that sort of place.

If it was the intern's idea, you may need to call the client yourself and make sure he is still happy with your company (you need not mention the strip club, just do a follow up and find out if he is feeling happy or needs something more). In any event, you need to make it crystal clear to the intern that this is something he should not discuss with any work colleagues or anyone outside the office. He can damage a client's reputation and lose the contract.

  • You will never know for certain whose idea it was to go to the strip club. Or what went on there. I guarantee you it wasn't $700 for Diet Cokes and hot wings. You can't ask the client, and the intern, as soon as you ask, will blame the client. And why is anyone giving a company credit card to an intern? – Nolo Problemo Aug 17 '17 at 15:43
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    Some interns are naive enough to tell the truth. However, all you can do is ask. If they say the client asked for that, then you have to act as if that is true unless you hear differently from the client. – HLGEM Aug 17 '17 at 17:51
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    I personally disagree that you should pay for company expenses. Even if he is responsible for the mistake. The benifit of being employed instead of being an employer is that you are not putting in your own personal money, only your time. If I wanted to risk my own money, I would start my own business. The boss decided to take this risk. – Jeroen Aug 18 '17 at 8:01
  • Someone has to pay the bill if the company denies it. The supervisor is more at fault than the intern because he did not make the guidelines clear. He therefore owes the bill if the company does not pay it. – HLGEM Aug 18 '17 at 12:57

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