Showing posts with label e-discovery. Show all posts
Showing posts with label e-discovery. Show all posts

Wednesday, September 1, 2021

Shredding documents during litigation is a bad, bad idea (a “Worst Employer" nominee update)


Activision Blizzard was my 11th nominee for the Worst Employer of 2021. Among the alleged sins that earned its nomination — a key software developer named the hotel suite he'd use to groom female subordinates "The Cosby Suite."

The hits for this employer just keep on coming. The State of California's Department of Fair Employment and Housing, which is actively investigating Activision Blizzard for having a pervasive culture of harassment and abuse toward its female employees, now accuses the company of shredding documents relevant to the investigation.

Thursday, March 28, 2013

A cautionary tale on what happens when you botch a litigation hold


All the way back in October 2010, I provided 10 tips for issuing an effective litigation hold. What happens, however, if your litigation hold is not effective, or, worse yet, not issued in the first place? EEOC v. JP Morgan Chase Bank (S.D. Ohio 2/28/13) should be required reading for any company on the serious consequences that can occur from a botched litigation hold.

In this Title VII litigation, the EEOC claimed that the bank removed female employees from a mortgage call center queue and instead directed the more lucrative calls to male employees. In support of this claim, the EEOC sought the production of certain records that would show which calls an employee should have received based on their level of skill. According to the EEOC, a statistical analysis of that data would show sex discrimination. When the bank refused to produce the records, the EEOC filed a motion to compel, which the court granted for a limited period. The bank, however, could not produce certain of the records, as it had already destroyed them as the result of its routine purging of electronic records.

The court concluded that the bank’s admitted destruction of evidence was inexcusable:

Plaintiff provided Defendant with notice on numerous occasions of the need to retain the destroyed data…; these notices came immediately prior to the destruction of relevant data from the three years prior. This data likely would inform Plaintiff’s claims and Defendant’s defense….

Defendant’s failure to establish a litigation hold is inexcusable. The multiple notices that should have triggered a hold and Defendant's dubious failure if not outright refusal to recognize or accept the scope of this litigation and that the relevant data reaches beyond the statutory period present exceptional circumstances….

Defendant’s destruction of evidence under the auspices of routine purging has hampered the ease of if not the ability to uncover exactly what if anything impermissible has transpired here.

As a sanction, the court denied the bank’s motion for summary judgment and provided the EEOC with an instruction that the jury could draw an inference adverse against the bank based on its document destruction.

The importance of this lesson cannot be overstated. As soon as you reasonably anticipate litigation, you have an absolute duty to implement a written litigation hold that both instructs employees to preserve paper and electronic records relevant to the case, and suspends any automated processes that otherwise might result in the destruction of such records. If your lawyer is not having this conversation with you, it’s time to find a new lawyer. As JP Morgan Chase illustrates, the penalties for non-compliance can devastate your case.

Wednesday, February 8, 2012

Another consideration in the high cost of wage and hour litigation: e-discovery


I’ve written before about the high risks companies face from wage and hour class/collective lawsuits (here’s one example). Here’s another factor to consider: the exorbitant costs imposed by e-discovery and employers’ obligations to preserve electronic records.

Workplace Prof Blog brings us the story of Pippins v. KPMG, a wage and hour collective action alleging that the accounting firm deprived its Audit Associates of overtime wages. Before the class was even certified, the court imposed upon KPGM the obligation to preserve the potential class members’ more-than 2,500 laptop hard drives. Following certification, KPMG argued that instead of preserving all of the hard drives—at an astounding cost of more than $1.5 million—it should only be required to keep a representative sample comprised of the named plaintiffs.

The court disagreed:

Based on Plaintiff’s recollections regarding their former hard drives, I agree with [Magistrate] Judge Cott that the hard drives are likely to contain relevant information. The information on the hard drives will likely demonstrate when the Audit Associates were working (hours) and what they did while at work (duties). This information is obviously relevant in a case asserting violations of the FLSA … since Plaintiffs need to establish what type of work they performed in order to prevail on the merits, and how many hours a week they worked in order to collect damages….

I gather that KPMG takes the position that the only Audit Associates who are presently “parties” are the named plaintiffs, and so only the named plaintiffs’ hard drives really need to be preserved. But that is nonsense…. [T]he duty to preserve all relevant information for “key players” is triggered when a party “reasonably anticipates litigation.” At the present moment, KPMG should “reasonably anticipate” that every Audit Associate who will be receiving opt-in notice is a potential plaintiff in this action.

What are the lessons for employers?

  1. When considering the goofy costs (and risks) of wage and hour non-compliance, you not only have to factor in unpaid wages, liquidated damages, your legal fees, and the employees’ legal fees, but also the costs of preserving all of the electronic information the plaintiffs will seek in discovery. Like most employment cases, there exists a palpable disparity in the ownership of information. Employers possess most of the relevant information, and therefore carry most of the costs in the retention and production of documents. 
  2. To guard against these goofy costs, audit your wage and hour practices. ’Tis better to spend a few thousand dollars up front to gain knowledge of which of the myriad wage and hour laws your company might be violating, than to spend a few hundred thousand (or a few million!) dollars later to defend against, or pay out on, a wage and hour class action. (Not that employers can't win these cases).

Tuesday, October 12, 2010

Do you know? Ten tips for effective litigation holds


The purpose of a litigation hold is to stop the destruction of potentially relevant or discoverable documents and information pursuant to a retention policy or otherwise. With the advent of electronic discovery, it is incumbent upon litigants to employ litigation holds as soon as claim or potential claim is reasonably clear. Otherwise, relevant documents might be destroyed, leading to sanctions such as adverse inferences, dismissal of claims, or default judgments. In other words, failing to implement a litigation hold is a quick way focus your case away from the law and the facts and on to discovery issues.

The following is a list of 10 practical tips for implementing a meaningful litigation hold during active or pending litigation:

  1. Describe the pending claim.

  2. Identify the recipient of the hold letter as someone who may have personal knowledge regarding the matter, or who may be in possession of or have access to information or documents potentially relevant to the matter.

  3. Order the suspension of any deletion, overwriting, or any other destruction of electronic information relevant to the matter that is under the recipient’s control. This task will be much more daunting for an IT manager than an individual employee’s work station.

  4. Broadly define the scope of covered information to include all documents, records or data of every kind residing or recorded (intentionally or unintentionally) in any medium or location other than within a person’s memory: paper, magnetic tape, photographs, maps, diagrams, applications, databases, microfilm, microfiche, emails, intranet, instant messages, blogs, voicemails, metadata, and any other electronic means of communication that are created, stored or received on the company’s computers or network systems or any other devices (phones, PDAs, applications or storage devices) or systems capable of storing electronic information.

  5. Instruct that the recipient search all information for anything relevant or potentially relevant to the claim. Emails and other electronic information should be segregated in a PC or Outlook folder, and all paper documents in a hard file.

  6. Hoarding is not a bad thing. Tell recipients to err on the side of over-saving.

  7. Designate one company employee as the point person for any questions about the litigation hold and employees’ duties to preserve information and documents.

  8. Alert recipients about the to the risk to the company and its employee for failing to heed the litigation hold request.

  9. Ensure that the recipient signs a verification signifying the receipt the litigation hold.

  10. Periodically recalculate the litigation hold to ensure continuing compliance.

Friday, July 13, 2007

Sedona Conference publishes the Second Edition of its Sedona Principles Addressing Electronic Document Production


For those interested in e-discovery, the Sedona Conference, one of the country's preeminent legal think tanks in the areas of antitrust law, intellectual property, and complex litigation, has published The Sedona Principles (Second Edition): Best Practices Recommendations and Principles for Addressing Electronic Document Production, available for download from the Sedona Conference here. The First Edition, published prior to the recent amendments to the Federal Rules of Civil Procedure, is widely considered to be the bible of best practices for e-discovery. The Second Edition reflects the new language found in the amended Federal Rules, and updates the language and commentary on metadata and the imposition of sanctions.

Wednesday, May 16, 2007

E-discovery provides a potential weapon against litigating employees


After Target Stores terminated Judith Teague's employment, she claimed gender discrimination and filed a charge of discrimination with the EEOC and a subsequent lawsuit in federal court. During discovery in the lawsuit, Target learned that Teague owned a home computer on which she conducted a comprehensive on-line job search and exchanged e-mails about her termination and the discrimination claim. Target asked for the computer in discovery in support of its defenses to her back pay and discrimination claims. Teague claimed, however, that in August 2004 the computer "crashed" and she disposed of it. Because of her spoliation of relevant evidence, the District Court granted Target an adverse inference instruction -- that is, at trial the jury would be permitted to infer from Teague's destruction of evidence that any such evidence that would have been found on the computer would have favored Target. In so ruling, the Court relied on several facts. First, Teague had an obligation to preserve her computer because it contained electronic evidence relating to her claim against Target and her efforts to mitigate her damages. Secondly, because at the time of disposal she had already filed her EEOC charge and hired an attorney to pursue litigation, she discarded the computer with a culpable state of mind.

Thus, the Court announced that it would sanction Teague by giving an adverse inference instruction to the jury at trial. Not surprisingly, within two weeks of that Order, the case was settled and dismissed on terms that one can only assume were very favorable to Target.

Employers have been fearful that the recent e-discovery amendments to the Federal Rules of Civil Procedure would prove to be expensive and burdensome in managing myriad e-mails, documents, and information stored daily on corporate servers. Teague v. Target Corporation shows that e-discovery also is a potential trap for unwary employees and a potential weapon for employers to add to their arsenal of litigation tools. Companies should considering asking in discovery for e-mail addresses and computer information from all plaintiff-employees. As Target found out, you never know what you will find. As Teague v. Target Corporation points out, it's often what you do not find that proves the most helpful.