We're celebrating 10 Days of Membership! Today's Gift: $20 off your professional membership with promo 10DAYS20OFF
Training, policies and tools to help HR prevent and respond to harassment claims.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Develop your HR competencies and knowledge in-person in 12 U.S. cities or virtually.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
E Is for Evidence
Stowed electronic documents can sink or save a plaintiff’s claim.
In another era, as employers drifted toward litigation, hard copy was run up the masts and largely defined the course of litigation. Today, electronically stored information (ESI) increasingly tips the balance, particularly since amendments to the Federal Rules of Civil Procedure took effect for all federal proceedings launched on or after Dec. 1, 2006.
By addressing ESI expressly, the amendments make it substantially more likely that plaintiffs’ lawyers will focus on ESI in documents’ preservation and production, which heightens the e-risk for employers.
Because the litigation rules are only amended and not brand new, there may be a tendency on the part of some human resource professionals to discount their significance. However, the litigation amendments affect HR professionals not only in litigation but also well before litigation, just as a voyage is preceded by meticulous care of the vessel, packing and charting.
For HR professionals, the new federal rules, which many state courts will look to for guidance as well, provide an ideal time to examine or re-examine their companies’ electronic document creation and preservation practices.
The right policies and practices can help employers chart their way through some of the rough seas churning from the e-discovery amendments.
New Category Of Discoverable Information
The amended rules likely to have the greatest impact on HR professionals include the following:
Even before the amendments, some judges required that ESI be disclosed pursuant to Rule 26. As a result of the amendments, all employers will need to disclose ESI sooner rather than later. In other words, defendants are now required to educate their adversaries on what ESI may benefit them.
As a result of the amendments, the parties also now must discuss “any issues relating to preserving discoverable information.” Further, the amendments also provide that the parties must confer about and address in their proposed discovery plan “any issues relating to disclosure or discovery of electronically stored information, including the form or forms in which it should be produced.”
Failure to address preservation issues early in the litigation increases uncertainty and raises a risk of disputes.
With regard to what form or forms of ESI should be produced, the Committee on Rules of Practice and Procedures, Judicial Conference of the United States, is helpful:
“Computer programs may retain draft language, editorial comments and other deleted matter (sometimes referred to as ‘embedded data’ or ‘embedded edits’) in an electronic file but not make them apparent to the reader. Information describing the history, tracking or management of an electronic file (sometimes referred to as ‘metadata’) is usually not apparent to the reader viewing a hard copy or a screen image. Whether this information should be produced may be among the topics discussed in the Rule 26(f) conference.” (For more information on metadata, see “Avoiding the Perils of Electronic Data” in the January 2007 issue of
Other amendments that affect and make more likely the discovery of ESI include Rule 33, which calls for a search of ESI in answers to interrogatories involving the review of business records, and Rule 45, which outlines conditions for non-party production of ESI.
However, the rules also recognize that producing ESI can be quite burdensome. For this reason, Rule 26(b) provides that a “party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” This “defense” is narrower than it first may appear.
As an initial matter, the burden is on the party asserting undue burden or cost to prove the undue burden or cost. Further, even if an employer establishes undue burden or cost, the court still may order its discovery for “good cause.”
But, most important, even where undue burden or cost is a defense to production, it may not be a defense to preservation.
However, just as with the undue burden or cost defense, the safe harbor is also much narrower than it first may appear.
The safe harbor from sanctions under Rule 37(f) appears to apply only if the employer has made affirmative efforts to protect ESI from what would have been its destruction in the ordinary course of business. From this perspective, the safe harbor is hardly a safe harbor at all.
Further, the protection provided by Rule 37(f) applies only to sanctions “under these rules.” It does not affect other sources of authority to impose sanctions or rules of professional responsibility, discussed in more detail below. ›
The best way to avoid having e-mails and other electronic communications used against the organization is not to create the evidence in the first place. In most organizations, there are too many electronic conversations and debates that reflect emotional impulses that later may be used against the organization in legal proceedings.
Take the following example. An employee has complained about harassment on numerous occasions. Her complaints, while made in good faith, are without legal merit. In response to but another complaint, the manager e-mails HR: “Jane has made another outrageous complaint. When can I fire her?”
If Jane ultimately is fired by the manager, the e-mail is strong evidence of a retaliatory intent, even if the employee actually is let go for nonretaliatory reasons.
HR needs to make clear to managers that, when they are addressing issues of legal significance, they should minimize the use of electronic communications and consult with HR the old-fashioned way—by picking up the phone. Where e-mail is used, managers should be instructed to report just the facts and to avoid editorial whenever possible.
Returning to the prior example, the e-mail would look something like: “Jane has raised another complaint which I need to discuss with you.”
The caution on e-mail also applies to instant messages (IMs). In some organizations, the IMs are backed up. Even if they are not, the recipients may retain them, a lesson former Rep. Mark Foley infamously learned the hard way. (For more cautionary tales about personal e-mail, see “Keeping E-mail in Check”.)
Your Life Preserver
The attorney-client privilege can be a valuable life preserver in litigation. Don’t accidentally puncture it!
None of us would put advice from our attorney in an employee’s personnel file. However, many HR professionals create electronic folders for each employment matter they are handling. Sometimes, these electronic folders include e-mails to and from the employees involved in the matter as well as their attorneys.
This creates potential risks in terms of inadvertently disclosing attorney-client-privileged information. While the new rules have a procedure for addressing inadvertent disclosure of privileged information, employers are obviously better off if they avoid such disclosures in the first instance. It is generally recommended that individuals who deal with inside or outside counsel create separate and distinct electronic folders that are labeled as and contain only privileged information.
However, HR and managers need to be careful that only privileged communications go into the privileged e-folders. For example, copying an attorney on an e-mail does not make it privileged. Generally speaking, the privilege applies only with regard to requests for or the provision of legal advice.
Improperly putting unprivileged e-mails in a privileged folder puts at risk the privilege where it is appropriate. If everything is privileged, nothing may be privileged. At a very minimum, it creates dicey disputes for litigation.
Disclosure of the legal advice given also may put the privilege at risk. HR and other managers who deal with legal counsel should refrain from forwarding e-mails from counsel to others in the organization unless there is a need to know, very narrowly defined.
Duty To Preserve
As previously noted, the amendments to the new rules specifically address, among other issues, the duty to preserve ESI and other documents in litigation. The duty to preserve ESI and other documents existed prior to and independent of the amendments.
An employer has a common law (judge made) duty to preserve (without altering) evidence relevant to current or reasonably foreseeable future litigation. Some statutes, such as Section 802 of the Sarbanes-Oxley Act, impose express preservation obligations.
Failure to preserve evidence as required is what the courts call “spoliation.” As noted previously, sanctions may be awarded under Rule 37 for spoliation (although that term is not used in the rule itself). Other possible sanctions for spoliation of ESI or other documents may include (but are not limited to):
In this context, it is important to note that an employer may be subject to the above sanctions even if the employer satisfies the safe harbor requirement under Rule 37(f). However, as a practical matter, the employer’s good faith, necessary for the safe harbor to apply, should be helpful in avoiding these other possible sanctions.
In employment matters, there are at least five categories of triggers that may invoke a duty to preserve.
The first is the most obvious—the filing of a federal (or state) lawsuit. As soon as the employer receives (or otherwise becomes aware of the existence of) the complaint, the employer must begin to preserve ESI and other evidence.
However, the duty to preserve is not limited to litigation proceedings. It also applies to administrative charges.
Not surprisingly, the duty to preserve also applies to government investigations.
The duty to preserve may be triggered by a letter from opposing counsel. The question is whether litigation is reasonably foreseeable. There is no on-off switch on this issue as there is with litigation, where there is always a duty to preserve.
The duty to preserve even may be triggered in response to a complaint by an employee (or non-employee) without the involvement of an attorney.
As the above discussion hopefully makes clear, in many cases, the duty to preserve ESI and other documents may exist long before any litigation is actually filed. In consultation with inside and/or outside counsel, HR departments need to develop a protocol for determining when a duty to preserve may apply so that the appropriate “litigation holds” memo can be issued.
Little Allowed Overboard
Although this article focuses primarily on ESI, the duty to preserve is not limited to ESI (broadly defined). It also covers, for example:
With regard to ESI, however, the risks may be greatest because of the complexity of the data. For example, it is not enough for employers to save relevant e-mails by printing them out in hard copy for the paper file. As noted earlier, there may be data that the employer cannot see but that must be preserved.
Further, ESI is not limited to e-mail. It also includes, for example, backup tapes, floppy disks, and CD or DVD drives. It also would cover electronic word processing documents, spreadsheets, databases, calendars, telephone logs, software, Internet usage files and network access information. The list is virtually limitless.
The time to find out whether and how e-mails and other electronic documents are created, destroyed and backed up is not in the context of litigation. Rather, HR needs to discuss these issues with IT professionals prior to and independent of any litigation.
Once the backup policies and practices are understood, HR, in consultation with inside and/or outside counsel, may wish to revisit whether and to what degree e-mails and other electronic documents not subject to a litigation hold should be backed up and for how long. This requires a balancing of the potential legal and business benefits of retaining the data against the potential risks of not retaining it.
HR generally should define the duty to preserve broadly and leave the undue burden defense to their attorneys relative to the production. Preserving now does not result in a duty to produce later. However, failure to preserve now may result in an inability to produce later with the concomitant potential for sanctions and the other remedies for spoliation as noted above.
It is also important to emphasize that it is no defense to the failure to preserve evidence that ESI or other documents were destroyed in the ordinary course of business. A “litigation hold” means instructing those who have possession or custody of such documents that they must retain such evidence without altering it, even if they otherwise would discard or destroy the evidence in the ordinary course.
In the context of ESI, this may mean, for example, overwriting the computer program that otherwise would delete the e-mails and other ESI that the employer must retain. In some cases, it also might mean taking mirror-image copies of hard drives. These are but two of the many possible steps that may need to be taken to ensure that ESI is properly preserved. In almost all cases, this will require working with your IT professionals.
Employers need to ensure that their document retention programs cover ESI not just in the abstract but with careful consideration of all of the various types of electronic documents. If you don’t have a clear retention policy, disputes are inevitable in terms of preservation and production.
In light of the enormous obligations, procedures and policies of how to operate if and when the storm of litigation hits are imperative. They can mean the difference between quickly taking the actions needed or allowing the storm to carry your organization perilously off course.
Editors Note: This article should not be construed as legal advice or as pertaining to specific factual situations.
Jonathan A. Segal, Esq., is vice chair of WolfBlocks Employment Services Group, a member of the firms executive committee and the managing principal of the WolfInstitute, the training and educational arm of the Employment Services Group. Jonathans practice concentrates on preventive planning, counseling and training to maximize an employers legal compliance and to minimize an employers exposure to litigation and other adversarial challenges.
SHRM web page: Workplace Law Focus Area home page
SHRM articles: Revised Rules on ESI Should Prompt 'Routine Imaging' (Legal Report)
Avoiding the Perils of Electronic Data (HR Magazine)
Amended federal rules define duty to preserve work e-mails (HR News)
E-mail litigation takes employers into uncharted territory (HR News)
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 3,200 companies