Finance News & Insights

Digital recordkeeping: Would your process hold up in court?

Digital documentation is more critical than ever. So now’s a good time to huddle with HR to make sure your electronic recordkeeping processes are in order.

Even the judicial system, often slow to react, has recognized that electronic storage of records is now the norm and not the exception, and changes to the Rules of Civil Procedure have been in effect since 2006.

What does the increasing prevalence of electronic records mean to HR professionals as they try and protect their employers against employment law liabilities?

Much more information is potentially available – studies indicate than more than 70% of corporate records are now stored electronically and 30% are never printed. That embarrassment of informational riches can cut both ways.

Emails lurking in your systems can be a nightmarish smoking gun.

But being able to retrieve all kinds of files from plaintiffs and complainants can also work for you — by casting doubt on the seriousness of any allegations.

Step One: The overall plan

First step: Get your administrative ducks in order. Here’s a checklist from Forbes:

  • Remember, less is more – All companies should develop and enforce a record retention policy outlining what types of data should be kept and for how long. The goal should be to only hang on to what’s necessary, which will make the discovery process easier. It also helps with security and data center efficiency.
  • Collaborate – For e-discovery to go smoothly, IT, Legal, HR and other departments must work together to develop policies and procedures.
  • Communicate – One key part of all e-discovery procedures should be a plan for how all necessary parties will be informed that a lawsuit is pending. That includes setting a plan to notify IT of impending legal action so tech staff can begin saving relevant information.
  • Stay organized – Keeping information logically organized, in easily searchable formats and without redundancies can go a long way toward reducing e-discovery costs.
  • Use quality assurance – It’s not enough to just put policies and procedures in place — you also have to make sure they’re being followed. That means periodically checking in on preserved data to make sure you’re not keeping too much or too little.

Step Two: Down to the details

This is the technical part.

Here’s a multi-point plan to ensure you meet your Locate, Preserve, Produce and prevent Sanctions for Spoliation (LPPS) obligations relating to Electronically Stored Information (ESI), courtesy of attorney Paul Prather of the employment law firm Littler Mendelson:

  • Develop and enforce records retention and destruction programs. Once you know litigation is coming, routine document retention/destruction polices need to be suspended.
  • Draft defensible litigation hold instructions. It’s a good idea to form an e-discovery response team including someone from IT to identify all possible custodians of relevant ESI, and identify all systems where it may be stored.
  • Commit to an evidence preservation program. Clearly describe the subject matter of the hold to all ESI custodians and emphasize that the hold is “mandatory.”
  • Monitor and enforce custodian preservation and data collection. Designate a contact person for the litigation hold; provide detailed instructions how ESI is to be preserved.
  • Ensure a comprehensive search methodology. When you meet with the attorney(s) for the other side, you’ll be asked to identify the types of different IT systems in use and the scope of the electronic records sought, and whether they will be submitted in searchable format or in images only.
  • Don’t leave real data loss undetected. If data was lost in a “grossly negligent” manner, inferences will be drawn against you – and you may have just lost your case.
  • Hire a forensic computer specialist. You have to show that you know what you’re talking about.
  • Take reasonable steps to protect privilege. You don’t have to hand over any document prepared with attorneys in preparation for litigation.

Need a lesson for managers who don’t take “all this digital stuff” seriously? Tell managers about the exec who wrote: “If [it’s] destroyed in the course of normal policy and litigation is filed the next day, that’s great. We followed our own policy and whatever there was that might have been of interest to somebody is gone and irretrievable.”

That was intentional destruction of evidence. The manager was held in contempt of court and the company lost the case.

This story initially ran on our affiliated site, HR Morning.

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