You’d think contacting an employee to say you don’t have his home address would be enough to cover your tail when it comes to escheatment. But you might be wrong. In a current case, a worker sued his former employer for not doing enough to find him and notify him of the status of property it was holding on his behalf.

The employee had purchased company stock through an employee purchase plan. Even though he later moved, he maintained the home address that he used for the stock purchase.

Nearly 20 years after he purchased the stock, without having heard from him, the company assumed it no longer had his correct address and escheated the funds to the state.

Normally companies get immunity from lawsuits once they transfer the property to the state. But in this case, the employee was able to prove the firm wasn’t entitled to immunity because it had his correct home address on file the entire time.

The case is still wending its way through the courts, so it’s too soon to say how much the company could be on the hook for. But between legal costs and a potentially large reward, chances are it’ll be costly.

What better reminder that the frustrating task of trying to contact each and every owner of unclaimed property is well worth doing — and worth doing well.

Tags: Best practices, Internal controls, Legal trouble, Unclaimed property