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No more hide-and-seek: new duty to retain electronic data

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in Discrimination and Harassment,Employment Law,HR Management,Human Resources

When it comes to evidence presented to win or defend against civil lawsuits, employers no longer can play a game of hide-and-seek. The new game in town is 1-2-3 Show M’e-discovery.

That’s because new amendments to the Federal Rules of Civil Procedure, governing the exchange of electronic information in litigation, create a coherent set of rules for cases pending in federal courts. (The rules took effect on Dec. 1.) Individual states will likely follow suit. Electronic discovery, or e-discovery, refers to how the legal world of litigation searches, collects, processes and produces paperless electronically stored information (ESI).

Is this really something new? No and yes. These federal discovery rules addressed electronic data and records as far back as 1970 and again in 1993. But the new changes address specific issues relating to the unique nature and special needs of e-mail and electronic discovery.

These rules place a substantial burden on employers to address not only storage policies and practices, but retrieval ones, all in reasonable anticipation of litigation. The purpose is to set out an early structure, predictability and standardization to keep litigation costs down.

What’s fair game? The new rules force organizations to look broadly at local and global communication strategies, including networks, databases, servers, laptops, archives, disks, CDs, memory sticks, backup tapes, recovery systems, retired hardware, obsolete software, BlackBerrys and even mobile phones and pagers.

Americans will send at least 7 billion e-mail messages by 2008, yet a new survey says more than half of U.S. employees have no idea that personal e-mail, instant messages and Web searches created on work computers can became “discoverable” in court.

Adding to the risk: E-mail messages (unlike paper memos) include more casual, off-the-cuff remarks. And because they’re encoded with “metadata” detailing who created, accessed and modified the document, e-mail can create trails.

The lifespan of paper documents and e-mail can be different, as well. When you shred a letter or document, it’s gone. But, when you think you’ve deleted an e-mail from your computer, it can live on forever in a computer’s hard drive, in backup tapes and on servers.

HR’s new risks. HR departments and professionals must play by the new rules or the consequences can be devastating. Inadvertent loss or destruction of e-mail or e-data could result in high fines, damages, attorneys’ fees and costs, as well as powerful sanctions, such as striking your organization’s defense. The jury may also be allowed to infer that the missing information would have negatively affected your case or helped your adversary. Not good.

Some companies already wish they could hit “delete” on the consequences key. Some recent examples to learn from:

  • A court sanctioned a tobacco company $2.75 million after 11 key employees failed to preserve e-mail as ordered by the court.
  • An investment bank paid a $15 million penalty for failing to turn over thousands of e-mails related to a case.
  • A court ordered a large software company to pay $25 million for e-mail-related misconduct on top of a verdict on separate charges.

To comply with the new e-discovery regulations, follow the best practices described below (see box). You can read the new rules at www.uscourts.gov/rules/congress0406.html.


Mindy Chapman is an attorney and President of Mindy Chapman & Associates LLC, which conducts interactive Workplace Training that Clicks and Sticks.SM Ms. Chapman is a master trainer, course designer and co-author of the ABA book, Case Dismissed! Taking Your Harassment Prevention Training to Trial.  

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