Employers Penalized for Destroying Documents

When employers are put on notice of potential litigation, they have a legal obligation to preserve all evidence relevant to the matter, whether in paper or electronic form. Many employers have record retention and destruction policies that purge records after a certain period of time. When a “trigger event” occurs, these policies need to be overridden. As the cases below illustrate, there are consequences for employers for destruction or “spoliation” of evidence. 

In EEOC v. JP Morgan Chase Bank, N.A., a group of female employees claimed they were discriminated against based on their gender since they were unable to work with the bank’s most influential clients. (S.D. Oh. 2013) Records showing the employees’ qualifications were requested as part of the investigation. The bank was asked to produce records covering a three-year period, and while the scope of time was being debated, 10 months of data were destroyed per routine document destruction policies. Even though a formal document request had not been made before the data were deleted, the bank had received several notices of the pending litigation. These notices constituted a “trigger event” that should have caused the bank to preserve those records. As a result, the court imposed sanctions.

In another case, a male applicant filed a gender discrimination charge with the Equal Employment Opportunity Commission (EEOC) for the employer’s initial refusal to hire him and then again after his termination. EEOC v. Ventura Corp. (D.P.R. 2013). The EEOC issued warnings to the employer to preserve information relevant to the case. During the investigation, it was discovered that relevant documents were taken from HR and either shredded or taken to an offsite warehouse. The employer also destroyed email accounts that contained relevant information to the employee’s claim. The EEOC sought sanctions against the employer for hindering its ability to pursue the claim. Due to the destruction of records, the plaintiff could not adequately challenge the employer’s testimony that he was terminated for poor performance. The court ultimately disallowed certain testimonial evidence offered by the employer and instructed the jury to assume the contents of the emails the employer destroyed would have shown gender discrimination.  

Key lessons learned:

1.  Be sure to have adequate preservation safeguards in place for your company records.

2.  Remember your obligation to preserve documentation when requested by another party.

3.  Pay attention to “trigger events” to preserve data and make sure controls are in place to prevent data from being destroyed through routine record management process.