Did you know that your failure to retain all relevant materials after litigation is “reasonably anticipated” could result in you losing the lawsuit or being fined or sanctioned by the court?
A few months back, a Colorado federal judge blocked a meatpacking company from arguing that giving prayer breaks to Muslim workers would significantly slow production, because the company lost or destroyed documents that are vital for the US Equal Employment Opportunity Commission (EEOC) to rebut this undue hardship defense.
The judge stated that because the company failed to take “necessary steps to preserve reasonable access to the relevant records or prevent their destruction,” it cannot present evidence, testimony, or argument that the prayer breaks led to production line slowdowns or stoppages.
How do you know when “litigation is reasonably anticipated?” While there are some grey areas, the filing of a complaint unquestionably triggers the duty to preserve, as does the receipt of a “preservation” notice or letter from the opposition.
Some courts have held that the sending or receipt of a demand letter requires that materials be preserved. Even the occurrence of an event (such as a car accident, an on-the-job injury or a data breach) could trigger the need for a litigation hold.
To be prudent, any time you’re involved in a dispute, you should retain everything that you believe could be relevant to that dispute. This includes all documents, contracts, emails, voice mail messages, bills, photographs, text messages, and the like.
If the dispute relates to you as an individual, it’s usually fairly simple to retain the relevant materials, but if your dispute involves your business, there are numerous steps that must be taken.
First, you need to issue a written litigation hold notice, which should be sent to all personnel who might have relevant records, including IT personnel.
The “litigation hold” should advise employees to preserve all relevant materials and provide information that will help employees comply, such as the nature of the dispute and the relevant date range. You must then make sure that all personnel are, in fact, implementing the hold.
Remember that, at least with respect to materials relevant to the dispute, destruction pursuant to your business’s document retention policy must be suspended.
For example, if the policy provides that emails will be automatically erased after 30 days and hard copy files will be shredded after a year, you’ll have to make arrangements to stop the automatic erasure of emails as well as the document shredding.
Whether the dispute relates to you as an individual or to your business, you should also be sure to notify any third parties that might have relevant material, such as your accountant, to retain items relating to the dispute.
Please feel free to contact us if you have any questions about litigation holds or if you need
help creating a document retention policy for your business.
