Responding Effectively to Third-Party Subpoenas

17 November 2014 Labor & Employment Law Perspectives Blog

It is your lucky day!! A subpoena comes in the mail and makes its way to your desk. The subpoena comes from a creditor involved in a lawsuit with one of your employees and demands that you produce copies of your employee’s payroll records, bank direct deposit information, and medical records. In this common scenario, there are several issues that you must consider, such as whether you should object or produce the documents, whether you can legally limit the documents you produce, and whether you can be subject to liability if you refuse or fail to respond to the subpoena, or alternatively, if you produce the requested documents.

A subpoena is a legal document that requires a party or a non-party to a lawsuit to produce certain documents or to appear at a hearing. Subpoenas may be used in several contexts, such as if a company is the subject of a government investigation, or if one of your employees is involved in a divorce, worker’s compensation case, or other lawsuit. In some states, subpoenas must be issued by a court or an arbitrator. In other states, a subpoena may be issued by an attorney, who acts as an officer of the court. The subpoena will provide a number of days for you to respond. It is critical that you respond on time, even if your response is an objection. Failure to respond to a lawful subpoena could result in monetary fines, legal fees, and in some cases, a judgment against the company.

Once you receive a subpoena, you must timely review its scope. What is it asking for? If the subpoena is too broad, then an objection may be appropriate. In the example above, where a creditor is seeking payroll documents and bank information for your employee, that request may be too broad if it seeks pay records for a number of years, for example. It may also require you to disclose highly confidential or privileged information, such as the employee’s bank account information or medical records. In many states, before you can produce payroll records or banking account information, you are required to notify the employee and provide a copy of the subpoena and the documents to be produced, so that he or she may object. If the subpoena requests private information concerning other employees, such as supervisors or managers, an objection may also be prudent to protect the privacy rights of those employees.

There are other implications when subpoenas request medical records. In such cases, you may need a Health Insurance Portability and Accountability Act-compliant release from the employee whose records are being sought to prevent the disclosure of protected health information subject to HIPAA. The EEOC has argued that an employer violates the Americans with Disabilities Act when it discloses confidential medical records in response to a subpoena when the employee has not authorized such disclosure. Thus, if you receive a subpoena requiring the production of medical records, it is very important that you obtain a HIPAA release from the employee or employees whose records will be produced.

Responding to subpoenas for information or documents is a risky endeavor. Employers have to respond quickly, and to consider whether responding to the subpoena violates privacy concerns of any of its employees or is too time consuming and burdensome. Because each case is different and subpoenas may be issued for various reasons, we recommend that you consult legal counsel to assess your options and determine the best way to proceed.

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