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Richard J. Morgan, Editor
McNair Law Firm, P.A.
Vol. 16, No. 2
November 2007
ELECTRONIC WORKPLACE
Managing electronic discovery in employment litigation
D. Michael Henthorne
Electronic discovery, or e-discovery, is a topic that has garnered significant attention in both the legal and business communities of late. It's the process by which a party to a lawsuit requests information from the opposing party that is created,
stored, maintained, or searchable in an electronic format. Although many perceive e-mail as the primary focus of e- discovery, its scope is significantly broader and is equally applicable to text, images, calendar files, databases, spreadsheets,
audio files, animation, websites, computer programs, and even voice mail for telephone systems.
Recent decisions from courts nationwide have made it clear that any misstep in the e-discovery process that results in the loss of electronically stored information (ESI) can lead to serious consequences, especially when the loss could have been
prevented. Accordingly, you and your counsel must understand not only how to protect and preserve ESI but also how to conduct and respond to electronic discovery appropriately.
What's going to work? Teamwork!
To respond to the challenge, employers are increasingly relying on discovery teams, which are composed of members who will necessarily be involved in the e- discovery process. These individuals should be notified as soon as possible of any
anticipated or pending investigation or litigation:
- Legal member. This member addresses the legal issues that are involved with e-discovery and the matter in question. Principally, this member oversees the entire e-discovery process for the employer, not just for the issue at hand but for
all production issues.
- IT member. This individual has to have capabilities to identify, collect, and preserve ESI as requested by the legal member. Once the discovery team identifies any and all potentially relevant ESI, this individual is in
charge of actually preserving the it.
- Retained attorney. If the permanent legal member isn't actually representing the employer in the matter itself, this member will help with identifying the subject matter of the issue in question as well as
what electronic information may be needed.
- Records member. This member assists the discovery team with paper records and records stored in physical format off-site.
- Subject matter member. This member is the point of contact for the issue in
question and should have knowledge of the underlying facts of the dispute. This member helps with identifying what information and individuals were involved with the circumstances or transactions that led to the dispute.
Responsibility and
accountability
Each employment-related investigation, claim, or litigation matter may very well require the preservation of ESI and therefore may ultimately result in e- discovery. Fortunately, through your discovery team, you can take some definite actions to
balance the need to preserve evidence, confront the limitations of your computer data systems concerning ESI, and minimize any disruption of your day-to-day operations:
- Identify team members. The first step is to identify the appropriate discovery team for the investigation or litigation matter. Once it's formed, an initial meeting should be held to discuss the following points.
- Identify subject
matter. The legal member, the retained attorney, or both should initially determine the subject matter of the litigation or investigation. The claims of the litigation or investigation as well as any potential defenses, counterclaims, and third-party
claims should be carefully considered. Moreover, the likelihood of additional parties to the lawsuit should be reviewed. Those steps will assist the discovery team with determining the location of potentially relevant electronic information as well
as paper documents.
- Identify persons involved. When the subject matter has been identified, the team should identify the individuals with the knowledge of facts and circumstances that led to the investigation, claim, or litigation. In doing so,
the discovery team should include not only employees but also nonemployees, such as independent contractors and other third parties who could be regarded as agents of the employer.
- Prepare and distribute the litigation hold notice. The legal
member or retained attorney should prepare a "litigation hold" memo, which should be distributed to senior management, IT, and any key employees concerned with the investigation, claim, or litigation. This memo should be in writing and should
adequately describe the kinds of information that must be preserved so the appropriate individuals can segregate and preserve identified files and data. In that regard, the retained attorney has a duty to continue to monitor the litigation hold to
ensure that the key individuals and the employer are complying with it.
- Identify documents to be preserved. The legal member, retained attorney, and IT should identify any and all documents that may be relevant for the issue in question. In
doing so, each member of the discovery team must consider what is readily accessible and what isn't. Further, the discovery team should begin its initial inquiry and research into the projected costs of production and the anticipated time necessary
to make the production, if necessary.
- Store and protect the documents. The discovery team should then ensure that the appropriate documents are secured in a specific location for storage and preservation. An "e-hold system," a mirror image of
the relevant documents that are anticipated to be needed for the litigation or investigation, should be created so the rest of your computer system can operate without disruption.
Importance of a document-retention policy
Failure to properly preserve ESI may result in a variety of sanctions. Therefore, you should recognize that you'll sometimes have to suspend ordinary retention and disposition of records and should include procedures designed to implement such
suspensions. Unless a party has reason to anticipate an investigation, a claim, or litigation, the destruction of documents in compliance with a reasonable document-retention policy ordinarily won't be considered sanctionable conduct. In fact, when
the destruction occurs in compliance with your established document-retention policy, it may be considered sufficient evidence of your good faith.
The scope of potential consequences for improper destruction of relevant information is broad. In cases of egregious conduct, the sanctions may be severe. A court may assess attorneys' fees and other costs associated with related motions as a
sanction. Courts also may draw an adverse inference against the party responsible for the destruction, usually on a finding of willfulness, bad faith, or unquestionable culpability.
Your preservation obligation doesn't necessarily require the absolute security of all electronic documents and data at any cost. Nevertheless, courts have made it clear that employers and other litigants must take reasonable steps to preserve
electronic documents for litigation, whether pending or reasonably anticipated. Accordingly, an established document-retention policy is necessary to ensure that you can comply with the rules regarding preservation and prevent the loss of ESI in the
face of potential litigation by ensuring that all relevant documents have been preserved.
In preparing the document-retention policy, consider applicable legal and regulatory requirements concerning the appropriate time periods to keep documents and what types of documents to be retained. Typically, consultation with employees and outside
consultants, including legal counsel, accountants, tax advisers, and IT consultants, will be necessary. Moreover, once the document-retention policy has been created, you should ensure that it is followed and enforced.
I gratefully acknowledge the substantial and material contributions of Doug Kim and Amber B. Martella, both of McNair Law Firm, P.A., to this article.
Copyright 2007 M. Lee Smith Publishers LLC
SOUTH CAROLINA EMPLOYMENT LAW LETTER is not intended to provide legal advice, which can be given only after consideration of the facts of a specific situation.
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