Is your company prepared for a ‘litigation hold’?
Q. Sarah, vice president of human resources, receives a letter from counsel by a former employee detailing allegations of sexual harassment against two co-workers and a supervisor who had knowledge of the harassment. The allegations include jokes and lewd pictures being sent to the former employee by these co-workers as well as sexually suggestive remarks in front of the supervisor. At the end of the letter, the counsel advises the company to put a “litigation hold” on all relevant information and to preserve all electronic data, including all e-mails and texts, of these co-workers, the supervisor, the former employee and others. What are the company’s obligations?A. The destruction of evidence by a litigant, whether the destruction was intentional or accidental, may lead to court sanctions, such as fines or the loss of a lawsuit. A company can fall into a trap if it is not aware of its preservation duties and fails to have effective procedures in place to ensure that its responsibilities are satisfied.Spoliation – the destruction or significant alteration of evidence – also encompasses the failure to preserve evidence in pending or reasonably foreseeable litigation. To avoid spoliation, a company must know when it has an obligation to preserve information and what information it must preserve.The obligation to preserve evidence arises when a party has notice that the information is relevant to litigation or when a party should have known that the information may be relevant to future litigation. In other words, evidence must be preserved when litigation is “reasonably anticipated.” The usual circumstances kick-starting this duty might be a lawyer’s letter, notice of a complaint with a federal or state agency or notice of a lawsuit, or even when an employee makes internal complaints to managers and human resources people where they anticipate the possibility of litigation.A company should be mindful of the duty to preserve because it will fall squarely on the shoulders of the business managers and human resources people who address the issue before counsel may become involved. To meet this burden, managers and HR professionals must understand the “reasonable anticipation” standard, including specific instances that give rise to the duty in the employment context, and they must be able to assess what evidence must be preserved and what steps to take to ensure preservation.Determination about what information must be preserved depends on two variables – who is involved and what documents such people have.When a reasonable anticipation of litigation arises, a company should assess who the key players are – that is, which employees are likely to have relevant information and what documents each person may have. That includes documents in various electronic forms and media.The scope may expand as the company learns more about a potential dispute.The obligation to secure evidence can require a company to take a number of different actions:• Determining the scope of the litigation hold (including subject matter and issues, key players, location of data and relevant time periods) and promptly stop automatic destruction processes until the proper scope can be determined.• Issuing litigation hold notices to key players and other corporate employees, such at IT people.• Interviewing key players and determining any required expansion of the scope of the hold.• Gathering all backup tapes and other electronic storage media that contain electronic documents and placing them in a secure location and ensuring that routine data destruction measures are appropriately stopped according to the hold.• Making electronic forensic images of the hard drives and other electronic devices of the key players at the time litigation is reasonably anticipated.• Routinely reissuing litigation hold notices so key players are reminded of the preservation obligation, so that people newly identified as key players are given the notices, and so that new employees get the notices.Jennifer L. Parent, a director in the Litigation Department and Chair of the Employment Law Practice Group of McLane, Graf, Raulerson & Middleton, P.A., can be reached at 603-628-1360 or firstname.lastname@example.org.