If you groaned when you saw the words “litigation hold,” then you are in good company.
I have been enjoying the reemergence of Bloom County by Berkeley Breathed, so maybe this is why this image is fresh in my mind. When I hear litigation hold, I now immediately think of Binkley’s anxiety closet and images of the Giant Purple Snorklewacker mixed with sanctions orders. (If you do not have the slightest idea to what I am referring, check out Bloom County on Facebook).
We spend a lot of time on this blog trying to provide employers with information to avoid litigation and liability, but sometimes litigation happens. When it does, or when it is threatened, employers need to start the process of gathering information to defend against the claims. One of the first steps in the process should be identifying where relevant information might be stored. Increasingly, the answer to that question is in some electronic form, which may be subject to automatic deletion policies and disappear if steps are not taken.
When involved in a litigation or having received a demand letter or agency charge, the parties have a duty to preserve relevant information. As lawyers, what this means is that we often issue litigation hold letters to clients that need to be disseminated to the individuals who may have that relevant information and to put a stop on the automatic deletion of electronic information. However, litigation hold letters can strike fear in the hearts of employees. I have often had to explain to someone that the mere fact that we are issuing a litigation hold letter does not mean that there is a problem or that there will ultimately be liability in the case.
If you are tempted to skip having the litigation hold letter signed simply to keep the peace — don’t. Litigations are typically not short affairs and may drag on for years. Even if you were diligent and searched for all relevant evidence and took steps to preserve it, the fact is that something might have been missed or that there is an allegation that material was destroyed and you later face a sanctions motion. Now, years after your initial search, you need to explain to a court that you took all reasonable steps to preserve the information.
Not even Opus from Bloom County may be able to calm you down when faced with a spoliation motion seeking sanctions because some information relevant to a lawsuit was accidentally destroyed. However, signed litigation hold letters can be key evidence in such cases, especially as the employees who originally preserved the data may no longer work for you and are not available to testify that they conducted a search.
Generally, a discussion with your IT department is a great place to start to first figure out what your electronic storage policy is, whether a hold needs to be put in place, and which people may have electronic information that needs to be preserved. You also need to make attempts to preserve documentary evidence such as hard copies of personnel files, notes on performance reviews, calendars, etc. What you do not have to do to comply with your obligations is issue a blanket order that no one in the company may destroy any documents until the litigation is concluded. Instead, the litigation hold should be limited to those people with documents that could be relevant to the litigation.
Deciding just who should be issued a litigation hold letter can be tricky and you should consult with your counsel as to what might be reasonable in each particular case.