‘Delete’ Will Not Save You in Court

Employers Have A Duty To Preserve Email Evidence

A salesperson filed a sexual harassment lawsuit against her former employer in violation of Michigan’s Elliott-Larsen Civil Rights Act. She alleged that her supervisor was demanding sexual favors and that he terminated her after she refused. The employer denied the allegations and asserted that she was terminated as a result of her own misconduct.

In discovery, the salesperson requested that the company produce all emails between her and the supervisor. Afraid that the supervisor’s communications with the salesperson could be taken out of context, they deleted all of the requested emails and said they no longer had them. The salesperson filed a motion requesting sanctions for the company’s failure to preserve relevant evidence or spoliation.

In an instant, the employer’s attempt to divert attention away from the supervisor’s emails actually elevated them into the spotlight, making them a central issue in the case. If only they had understood their duty to preserve evidence, the focus could have been on defending the underlying claim instead of using its resources to avoid sanctions related to its failure to preserve evidence.

The Duty

The law does not require employers to preserve every single employment-related document or communication ever created, sent, or received. However, when an employer becomes a party to litigation or should reasonably foresee litigation in the future, the employer has a duty to preserve all evidence in existence at that time that it knows or reasonably should know is relevant to the anticipated action.

The duty to preserve evidence applies to legal disputes under federal and Michigan law. While the Federal Rules of Evidence specifically address this duty and its requirements, the Michigan rules are more general. Further, Michigan courts have not been clear regarding exactly when litigation becomes “reasonably foreseeable.” However, there is no dispute that employers are under a duty to preserve evidence by the time they are served with a complaint initiating a lawsuit, receive correspondence threatening litigation, or get notice of an administrative charge filed by an employee.

In the example above, the employer had a duty to preserve existing evidence as soon as it was served with the lawsuit. In fact, the duty may have applied before then if, for instance, the salesperson, when leaving her termination meeting, said that she was going to sue for harassment.

The Sanctions

Spoliation of evidence refers to the destruction or material alteration of evidence, or the failure to preserve evidence for another’s use in pending or reasonably foreseeable litigation. Spoliation can be intentional or unintentional, ranging from mere negligence in failing to turn off auto-delete to smashing a computer hard-drive with a hammer. When spoliation of relevant evidence occurs, a trial court has the inherent authority to sanction the culpable party to preserve the fairness and integrity of the judicial system.

In Michigan, with respect to spoliation by an employer, sanctions can range from fines to adverse inference or presumptions, dismissal or summary judgment when the spoliation is willful and intentional. The Federal Rules of Evidence expressly limit the court’s ability to impose sanctions only to the extent necessary to correct any prejudice, with more severe sanctions being awarded only upon a finding of the intent to deprive the other party of the evidence.

As the company intentionally deleted the emails to keep them from the salesperson, a court could instruct the jury to presume that the missing emails were adverse to the employer. Even though the emails might be benign, the jury would have to presume that the missing emails established the sexual harassment alleged by the salesperson. Accordingly, the company’s deletion of the emails effectively proved the salesperson’s case and guaranteed its own defeat.

The Preservation

To avoid sanctions, employers should take action to identify the universe of potentially relevant documents that need to be preserved as soon as litigation becomes reasonably foreseeable. First, employers should identify the key individuals or custodians who would have created/have access to relevant hard copy or electronic documents. Next, employers should determine where the documents are located, including whether they are on a server, in a shared network folder or drive, on the custodian’s device, in a mailbox, or elsewhere. Finally, employers should use that information to notify employees of their duty to preserve, institute a litigation hold that would remove relevant information from the automatic overwriting or deletion processes, and collect and preserve relevant data for future use and analysis, if appropriate.

Given the potential impact of spoliation, employers should consult employment counsel regarding the preservation of relevant evidence as soon as litigation becomes reasonably foreseeable. Employers and their counsel can work together to ensure that the process is sufficiently executed and documented on the front end in order to reduce the risk of any subsequent spoliation-related issues. Further, counsel can prepare data retention procedures and work with electronic discovery vendors as needed. Indeed, the company mentioned above surely would have benefited from such counsel and advice.

Lindsay Raymond specializes in employment law, represents employers in all aspects of employment-related matters, and defends employers in employment litigation matters. She can be reached at (231) 714-0161 or lraymond@darlawyers.com.

This article was featured in the December 2017 issue of the Traverse City Business News.