Connecticut Employment Law Blog : Connecticut Employment Lawyer & Attorney : Daniel Schwartz : Stamford, Hartford New Haven, CT

As I've noted before, the appellate courts in Connecticut release their decisions in advance of an "official" publication date for various reasons. I've now read over the Appellate Court's upcoming decision in Paylan v. St. Mary's Hospital Corp. a few times  trying to discern the big lesson for employers to take from this employment discrimination case in advance of its release.

And while the case won't be "officially" released for another week, the lessons from the case really surround evidentiary issues and provide yet another cautionary tale about the need to preserve electronic data (and the need to have a court involved to protect such data if necessary as well.)

In this case, a fourth-year resident sued her employer claiming discrimination based on her gender. The hospital claimed that she was terminated for poor performance. The hospital produced a poor employee evaluation report and the employee claimed it had been altered to be back dated before she filed a complaint with management.

She sought and obtained a court order that the hard drive be preserved and sought the meta data on the creation of the document. When that did not resolve the issue she sought permission to examine the hard drive but in the interim there had been a computer glitch and the computer system was reformatted during the repairs and the data was no longer available.

After a verdict for the employer after a trial, the employee appealed the trial court's denial of the request to introduce into evidence the court preservation order and obtain jury instruction that specifically references the destruction of evidence (termed a "spoliation" charge).

On appeal, the Appellate Court held that in order to obtain such a charge the employee must show: the information was relevant; the company was on notice that the evidence should be preserved; and the company intentionally destroyed the evidence. Here whatever errors made by the trial court were "harmless" because the employee failed to show that the reformatting of the hard drive was intentional.

In essence, the employer avoided an inference that it destroyed evidence because the employee failed to preserve this issue at trial by introducing evidence that the employer intentionally destoyed such evidence.  For employers, however, this is hardly a license to destroy electronic data.

Indeed, despite the ultimate result in the case, employers should tread extremely cautiously when getting new claims of discrimination in. The trend in federal courts is  towards requiring employers to preserve electronic evidence upon notice of a claim and, given the low cost of computer storage now, arguments that the hard drive was "reformatted" may fall on deaf ears in future cases.

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You're an employer in Connecticut. You've just been sued.   Besides contacting a lawyer (and you ARE contacting a lawyer, right?), what else are you doing about the new case? 

A new case in Connecticut suggests that preserving electronic data should be a top priority.  Why? Because under new court rules, failure to do so could lead to sanctions or inferences that a party destroyed evidence that would've been harmful to its case.  Indeed, the case suggests, in fact, that the duty to preserve evidence may arise even before the lawsuit is filed. 

In, Doe v. Norwalk Community College, 2007 WL 2066497 (D. Conn., July 2007), the court granted a motion for sanctions against a party who had failed to preserve electronic evidence.

Under the new safe harbor provision of Federal Rule of Civil Procedure 37(f), data management must be maintained through a routine system; moreover, the company must take some affirmative action (such as a letter to key potential witnesses and IT consultants within the company) to prevent that everyday system from destroying or altering information once the party becomes aware of the case.

In this case, the party (Norwalk Community College) did not do so.  It did not preserve the hard drives of key witnesses. Indeed, and even more damaging, those hard drives had been cleaned of data.  Indeed, the expert for the other side -- who inspected the  computers, concluded that there were inconsistencies in the PST or Outlook e-mail files. 

Because the company did not suspend the routine document destruction policy and "put a litigation hold in place," the court rejected any safe harbor arguments under Rule 37(f). Instead, the court granted the plaintiff request for sanctions and imposed an adverse inference jury instruction regarding the destroyed evidence (along with attorneys fees, costs and expert fees).

So, does this mean that an employer can wait to be sued before preserving evidence?  This decision clearly says no.  It found that the obligation to preserve evidence arises even before the lawsuit is filed.  Following other precedent, the court held that the duty to preserve electronic data arises at the time when litigation is "reasonably anticipated". 

While some employers and companies prefer to handle pre-litigation matters by themselves, the case serves a reminder that little actions (or inactions) at the start of a case can have much larger consequences down the road.  Issuing litigation holds and suspending routine document retention policies upon notice of a complaint may be one way to avoid these larger consequences down the road.

(Hat tip: Delaware Corporate and Commercial Litigation Blog)

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