April 2006
Volume 2, Number 3
Table of Contents

Document Spoliation: How To Lose Your Case Before You Get To Court

- In every sport, there are rules designed to ensure that the game proceeds fairly. In many respects, the same need for fairness applies to the parties in a contested employment matter. Read on to learn about the duties both you and your legal counsel have to avoid destruction of relevant documents before a case is resolved.

What is document spoliation?

Document spoliation is simply the improper destruction or loss of documents potentially relevant to litigation before trial and before the opposing party has had an opportunity to review the requested information. Seems simple enough, doesn't it? Hidden beneath that simple concept, however, are several issues that govern your duties and those of your legal counsel to ensure that document spoliation doesn't take place. Understanding and complying with those legal obligations isn't as simple as the basic rule prohibiting spoliation.

Initially, in every employment case, the duty to preserve relevant records or documentation arises even before the opposing party has made a request for particular documents. For example, under federal and state civil rights regulations, the filing of a discrimination charge against an employer triggers the employer's obligation to preserve any documentation deemed relevant during the agency's processing of the charge. Rules in the state or federal courts also demand retention of pertinent documentation during any subsequent litigation on the claim.

So what's relevant documentation? The term "relevant" generally includes information that tends to support or prove a significant issue in the case. Obviously, the factual circumstances of any given case will control what's relevant to that particular claim. If you're hit with a civil rights claim, however, you should consult with your counsel immediately to identify the potential categories of documents that might be deemed relevant to the charge. It's wise to err on the side of caution by preserving any information that might arguably need to be examined in processing the charge or the litigation, including personnel files of the complaining employee and similarly situated employees.

So what are considered records or documentation? Think broadly because the question encompasses far more than information on paper. Obviously, hard-copy documents, often clearly identifiable and segregated in files, are subject to preservation and potential discovery (pretrial exchange of evidence) if they're relevant to the claims and defenses asserted. On an increasing basis, however, employment litigation also entails the discovery of electronically stored information, including company e-mails and other electronic records, such as backup files or archival tapes generated by your computer system.

As our society has grown more computer-dependent, businesses, both small and large, increasingly use computers not only to store important business-related information but also as a communication tool used even more prevalently than the telephone. E-mail, of course, produces a record that can later be recovered and used in employment litigation. As a consequence, employers today are required to recognize that network servers, laptop computers, e-mails, instant messaging, and use of the Internet for their business communications and transactions may create litigation challenges and costs during the course of an employment dispute.

Document preservation sanctions

Under cases rendered by the federal courts, you clearly have a duty to preserve information that may become evidence in employment litigation. If you fail to do so, you're subject to sanctions ranging from court-ordered relief prohibiting the removal or destruction of files to the imposition of penalties and costs, including exclusion of relevant evidence and even the dismissal of defenses that might be available to you had you not deleted or destroyed information deemed potentially relevant to the litigation. In an action involving Phillip Morris in Washington, D.C., a district court found that the corporation had failed to abide by a court order designed to ensure preservation of computer e-mails. The court imposed sanctions that precluded the company from calling a key employee at trial, and it ordered the corporation to pay spoliation costs and over $2 million in monetary sanctions.

How do you avoid such harsh spoliation penalties? Immediately after you become aware of an employment charge, work with your legal counsel to assess the scope of information retained by the company that might be implicated in the employment dispute. Issue an e-mail alert to all document custodians to preserve information, and provide a broad description listing the specific types of records to be preserved. To ensure that your alert has been "heard," consider face-to-face meetings with those responsible for electronic document retention. Stress the critical need to retain all identified files, including backup and archival tapes that arguably could be relevant to the litigation.

Employers with automatic destruction policies often fail to clearly inform the appropriate department personnel that normal company procedures mandating periodic destruction of computer files must give way to the employer's obligation to avoid spoliation of electronic documents that could be subject to production in litigation. Many of the reported decisions in which sanctions are imposed against employers are cases involving negligent destruction of electronic information as opposed to willful or malicious spoliation of evidence. As a consequence, you should create litigation policies and procedures designed to protect not only hard-copy information but also electronic data.

Costs of electronic production

The courts have recognized that the costs associated with accessing, analyzing, and using computer data in employment litigation can be substantial. For example, it's common for an employer to receive broad requests such as "Produce all documents, including electronic documents, concerning any communication by or between company employees concerning the complaining employee." Obviously, retaining and producing archival records responsive to such a request could be burdensome. In response, one of the leading cases concerning the costs associated with computer record production has identified a seven-factor test addressing cost-sharing for electronic production:

- the extent to which the request is specifically tailored to discover relevant information;

- the availability of such information from other sources;

- the total cost of production compared to the amount in controversy (at stake in the litigation);

- the total cost of production compared to the resources available to each party;

- the relative ability of each party to control costs and its incentive to do so;

- the importance of the issue at stake in the litigation; and

- the relative benefits to the parties of obtaining the information.

After assessing those factors, the court will determine how the parties should share the cost of producing and analyzing the electronic data sought by the employee in the litigation. Often, computer experts for both the employer and the employee must become involved in the production process not only to assess what requests are appropriate but also to analyze the data preserved and produced.

Bottom line

Document spoliation is a serious issue in employment litigation. Further, the importance of the rule of fairness has expanded with the growth of computer-generated records. Be aware of your organization's duty to preserve key documents and take steps to ensure that your document custodians thoroughly understand the legal obligation to avoid spoliation of evidence.


Copr. (C) 2006 West, a Thomson business. No claim to orig. U.S. govt. works. This article is reprinted with permission from West, a primary sponsor of the General Practice, Solo and Small Firm Division.

This article first appeared in Iowa Employment Law Letter, July 2005

Copyright © 2005 M. Lee Smith Publishers LLC; Whitfield, Eddy, P.L.C.


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