Thursday, April 12, 2007

E-discovery sanctions -- they're not just for employers

Any lawyer who represents employers knows, by now, the pitfalls of e-discovery. Spoliation sanctions are increasingly common for destruction of relevant e-mails and other electronically stored information, even when the destruction is inadvertent. However, we need to keep in mind that employees have their own computers, too.

The excellent K&L | Gates Electronic Discovery blog points out a recent ruling from the Western District of North Carolina in which the court sanctioned an employee for throwing out her home computer after it "crashed" and thereby failing to preserve relevant data.

In Teague v. Target Corp., 2007 WL 1041191 (W.D.N.C. Apr. 4, 2007) (MS Word), the defendant sought dismissal of the Plaintiff's claim for back pay due to spoliation of material evidence. The plaintiff, a former Target employee, had sued Target for gender discrimination.

During discovery in this case, it was revealed that Plaintiff owned a home computer on which she conducted her entire on-line job search after leaving Target, including researching job opportunities on the internet, submitting on-line employment applications, and exchanging emails with prospective employers. She also used the computer to send and receive emails regarding her termination from Target and her claims of gender discrimination. She discarded the computer because it "crashed" and the hard drive failed. The computer was discarded approximately one year after she had retained counsel regarding her prospective claims against Target and after she filed her charge of discrimination with the EEOC.

The Court refused to dismiss the back pay claim, but did award an adverse inference instruction. The Court noted that "utilizing a sanction of dismissal for spoliation is generally not authorized absent bad faith conduct." Cole v. Keller Industries, Inc., 132 F.3d 1044, 1047 (4th Cir.1998). However, an adverse inference instruction is appropriate even in the absence of bad faith. See Vodusek v. Bayliner Marine Co., 71 F.3d 148, 156 (4th Cir.1995). The Court applied the following three-part test:
Courts have held that three elements should be shown to warrant an adverse inference instruction for spoliation: (1) the party having control over the evidence had an obligation to preserve it when it was destroyed; (2) the destruction or loss was accompanied by a "culpable state of mind;" and (3) the evidence that was destroyed was irrelevant to the claims or defenses of the party that sought discovery of the spoliated evidence, to the extent that a reasonable factfinder could conclude that the lost evidence would have supported the claims or defenses of the party that sought it. Residential Funding Corp. v. Degeorge Financial Corp., 306 F.3d 99, 107-08 (2d Cir.2002). A "culpable state of mind" could include bad faith/knowing destruction; gross negligence; and ordinary negligence. Id. at 108.
In this case, the court found all three elements to be present. This case is a good reminder that employees often use home computers that contain information relevant to a case, and that they are under the same duty to preserve that data as the employer.

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