When it comes to producing documents in employment litigation, the deck is usually stacked in favor of the employee. Except in those unusual circumstances when the employee is squirreling away documents in an effort to build a case against the employer or where the employee downloaded or otherwise stole documents just before resigning or being escorted out of the building, the employee normally possesses little if any documentary evidence.
The employer, on the other hand, often has a vast amount of documents that can be characterized as relevant to the claim. Courts impose the obligation on all parties to litigation to retain documents, and the consequences for failing to retain documents can be catastrophic. Court-imposed penalties for failure to retain documents have ranged from a reprimand to a monetary penalty to a negative inference jury instruction (instructing the jury to assume that any documents which have been wrongfully destroyed would have supported the employee’s case) to the ultimate penalty – a judgment for the plaintiff. The duty to maintain documents is imposed both on the party and the party’s counsel.
The courts have not provided consistent guidance as to when the obligation to retain documents arises, and in the employment context, this is a particularly thorny issue. While the duty to maintain documents certainly arises when a claim is formally filed with a court, an administrative agency, or pursuant to a grievance/arbitration process, under many circumstances it may arise before then. For example, it might arise when:
- The employer has sufficient facts to conclude that it is out of compliance with a law and inevitably employees will become aware of such non-compliance and assert a claim
- When an employee first expresses his belief that the employer violated his rights
- When a lawyer sends a demand letter
Recognizing the duty to maintain evidence relating to a claim, the tool used to communicate this requirement is known as a litigation hold letter. The litigation hold letter is a letter or memo issued by a person with authority instructing persons who maintain or have custody over relevant documents to preserve those documents. It does not require the retrieval of those documents, but rather the preservation. The litigation hold letter should be addressed to those persons who are a custodian of documents likely to be relevant to the dispute (including but not limited to the Information Technology department), should describe the dispute with sufficient clarity to permit the custodians to determine which documents might be relevant, should instruct the recipients as to potential locations of documents, should give examples of the types of documents to be preserved, and should state the contact information for the person designated to respond to questions.
Given the importance of preserving documents, the person ultimately responsible for compliance should not be satisfied that he has fulfilled the preservation obligations merely by issuing the litigation hold letter. Rather, persons with responsibility for retention of documents must also:
- Follow up with the custodians to assure that they have properly implemented the hold.
- Review periodically the substance of the hold letter. Claims change over time and the initial hold letter might not cover claims that were not then anticipated.
- Review periodically the names of the custodians who were issued the hold letter. Custodians change due to turn-over and changes in positions. Also, as claims change, the custodians often change.
- Remind custodians at regular intervals of their obligations to maintain records. Often there is a delay between the issuance of the litigation hold letter and when the claim is filed. During such a hiatus, custodians forget about the claim or assume it has been resolved and mistakenly discard relevant documents.
Considering the dire consequences of discarding or deleting documents relevant to litigation, it is important to seek advice of counsel as to when to issue the litigation hold, the persons to inform about the duty to preserve and in addition, it is important to be vigilant in assuring that documents are in fact preserved.