Document Retention and Electronic Discovery
In today’s business environment, organizations need to respond to an increasing number of document requests, from regulatory compliance issues to internal investigations to full-scale litigation. Much of this information is available electronically. Despite the prevalence of such document requests most organizations remain reactive rather than proactive when it comes to dealing with the issue of electronic discovery.
In reality, electronic discovery of documents has been around for several years. But late last year, the federal courts amended its rules regarding electronic discovery. Organizations can no longer afford to be reactive when it comes to the discovery of electronically stored information (ESI). Organizations not prepared for electronic discovery could face fines and/or sanctions if they are sued in federal court. (FYI: It is also expected that Iowa will soon amend its state civil rules regarding electronic discovery making it imperative that all businesses in Iowa should prepare for discovery of ESI).
One way to prepare your organization for the new federal electronic discovery rules is to have a solid document and email retention policy. If don’t have such a policy you need one but even organizations that have a policy should review their policy to make sure it covers issues that may come up under the new federal rules. Some important issues to cover include, but are not limited to:
- The name of the custodian for electronically stored information;
- A list of servers and back-up tapes used by the organization;
- The different ways employees save information in the organization;
- How to implement a litigation hold including email back-up.
It is important to have your IT staff involved in the process. Many organizations will write a policy but fail to take into account the various ways the organization actually stores information. ESI is present, not only on office computers, but also laptops, BlackBerrys, iPhones, other PDAs, and even cell phones.
Fortunately the new federal rules provide a “safe harbor” provision for those organizations that inadvertently destroy ESI during the routine, good faith operation of an electronic information system. How do you qualify for this safe harbor? The best way is through the implementation of an ESI management system that is actively enforced and audited. Investing in an ESI management system is likely to pay big dividends down the road if you are ever involved in litigation and is critically important under the new federal rules regarding electronic discovery.
For more information regarding the new federal electronic discovery rules, document retention policies and ESI management, you may want to check out my podcast with Brett Trout on electronic discovery issues. Another great resource is the Electronic Discovery Law Blog which I highly recommend.
Electronic records pose both business and legal considerations which are sometime incompatible. Lawyers forget that businesses have legitimate needs to save electronic data. So, much to the litigator's dismay, everything cannot be destroyed ASAP under an record retention policy. Business people usually ignore the fact that, if sued, they will need to "produce" marginally relevant data to be examined by the other side. This is expensive, inconvenient, and potentially embarrassing. It is a difficult balancing act.
One interesting effect that document retention policies may have on litigation is the impression that a juror may have when told that documents don't exist because they were "destroyed' pursuant to a business's policy. Particularly in employment discrimination cases, it may make sense to keep certain records longer than one might first think prudent. Very often an employer is forced to prove the negative. For example, a former employee may allege that she received a particularly salacious and sexually oriented e-mail from her boss two years ago. The employer who kept the e-mails can prove that no such e-mail exists. The employer that destroys old e-mails "pursuant to its record retention policy" is left with the inference that the e-mail may have existed and, even worse, it was destroyed in order to keep the truth from coming out.