Employers in two recent EEOC cases were sanctioned by federal courts for destroying employee records. These rulings illustrate the need for employers to develop and implement document retention procedures to avoid costly sanctions like fines, adverse evidentiary rulings and worst of all, significantly reduced chances to defeat employment claims. Importantly, the rulings may affect all employers as both courts applied uniform rules pertaining to document retention requirements.
Employers can avoid court penalties and sanctions by implementing document retention programs to maintain and safeguard important records, both in hard copy and electronic format. These programs will include litigation hold procedures, alerting the employees responsible for document retention to protect or preserve specific documents that may be relevant to a lawsuit.
In EEOC v. JP Morgan Chase Bank, N.A., +2013 U.S. Dist. LEXIS 27499 (S.D.Oh. 2013), a group of female employees alleged gender discrimination in lead distribution and compensation schemes. The female employees demanded data pertaining to their qualifications, arguing that the data would demonstrate no discernible difference between them and male employees who were provided with preferential leads and compensation. The employer argued that it had destroyed the data as part of its regularly-scheduled document destruction practices.
The court sanctioned the employer because it had been notified of the lawsuit before it completed destroying the documents, which the court considered "spoliation" or destruction of evidence.
In EEOC v. Ventura Corp., +2013 U.S. Dist. LEXIS 19662 (D.P.R. 2013), a prospective male employee alleged gender discrimination in the employer's initial refusal to hire him and ultimately, his termination after he made multiple complaints of gender discrimination. During the investigation, the court found that relevant documents were taken from HR and either shredded or transported to a warehouse. Further, the employer destroyed email accounts that contained relevant information to the employee's claims of gender discrimination.
The court found that the employer committed sanctionable spoliation because the plaintiff could not adequately challenge the employer's testimony that he was terminated due to poor performance. The court ultimately disallowed all testimonial evidence offered by the employer regarding applications and qualifications. The court also ordered that the jury be instructed to assume that the contents of the destroyed emails would demonstrate gender discrimination. This so-called "adverse inference" ruling may severely undermine the employer's ability to defend the discrimination claims.
Document Retention Policy
Federal Record Retention Requirements - Chart
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