When Does An Employer’s Obligation To Preserve Electronic Information Begin?

By: Leslie A. Mariotti , Shelly R. Pagac

Complaints filed with the Equal Employment Opportunity Commission (“EEOC”) by current and former employees are at a record high – 99,947 in fiscal year 2011.  Electronic information is now the number one piece of evidence in employment discrimination cases.  With so many discrimination cases being filed, an employer may wonder when its obligation to preserve electronic information begins.  It begins when a party “reasonably anticipates” litigation, which in no event is later than when a charge of discrimination is received.  The obligation to preserve electronic information may arise even earlier than when a charge is filed, but this article is simply a reminder that in no event does that obligation arise later than when the charge of discrimination if filed.

It has long been understood that the duty to preserve evidence arises when a party reasonably anticipates litigation. The United States District Court for the Middle District of Pennsylvania recently held that, in the employment context, the duty to preserve evidence, including electronically stored information (ESI), arises when an employee files a formal complaint with the EEOC.

The plaintiff in Culler v. Shinseki, 2011 WL 3795009 (M.D.Pa. Aug. 26, 2011), filed an age discrimination and retaliation complaint in federal court in 2009.  In July of 2011, the plaintiff filed a motion for sanctions contending that the defendant had failed to properly preserve, search and produce ESI responsive to his claims. The plaintiff asserted that the defendant’s duty to preserve ESI was triggered in 2004, when he filed his first formal complaint with the EEOC. He argued that he was prejudiced by the defendant’s failure to institute a litigation hold mandating that all relevant evidence be preserved as of that date.  The defendant responded that its duty to preserve relevant documentation did not arise until it was served with the federal complaint in 2009.

The duty to preserve evidence begins when litigation is pending or “reasonably foreseeable.” Once the duty to preserve arises, the litigant is expected to suspend its routine document and retention/destruction policy and to put in place a “litigation hold” to preserve the relevant ESI or other information pertaining to the litigation.

The Court found that litigation was reasonably foreseeable, and the defendant had a duty to preserve relevant ESI, as of the date the plaintiff filed his formal complaint with the EEOC in 2004. The court reasoned that the defendant was aware that federal anti-discrimination laws require a party to complete the administrative process prior to filing federal litigation and that filing a formal EEOC complaint was an indication that federal litigation might follow.

This decision reminds employers that the obligation to preserve relevant information, including electronic information, begins no later than when the employer receives the charge of discrimination.  Instituting an appropriate “litigation hold” will ensure that evidence the employer needs to defend its case will be there when needed.

Employers should be aware that the Court’s conclusion in this case might also be applied when  complaints are filed with state administrative agencies such as the Pennsylvania Human Relations Commission and local human relations investigative agencies. Prudent employers, when served with notice of the filing of a complaint or charge of discrimination at any level, should take the necessary steps to preserve documents and electronically stored information with the issuance of a Litigation Hold letter sent to all custodians of documents relating to the employee and to the company’s information technology department.  A properly worded and timely Litigation Hold letter can effectively preserve evidence of available defenses to the claims made as well as  avoid the problems faced by the employer in this case.

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