Data Retention Policy Saves Defendant from Spoliation Sanctions

Goodale v. Elavon, Inc.

S.D. Ohio 12/22/22 8:00

Why This Case Is Important

As data volumes grow, it’s critical for companies to turn their attention to information governance activities like implementing data retention policies to reduce the risk of sanctions.

Overview

In this wrongful termination case, the court addressed the Defendant’s duty to preserve certain documents pertaining to the Plaintiff’s employment and subsequent termination. The Plaintiff argued that her call to an ethics and compliance hotline after her termination should have triggered the preservation of performance documentation.

The Defendant, a credit card processing company, employed the Plaintiff as a customer account manager. After a brief internal investigation, the Defendant found that four customer account managers, including the Plaintiff, dialed an American Express automated phone number on multiple occasions, which could have inflated their scores on a metric used to measure employee performance.

After termination, the Plaintiff called a U.S. Bank ethics and compliance hotline, stating that she had been “singled out,” that she “would like information regarding her unfair termination reviewed,” and that she “would like her job back.”

The Plaintiff then filed an initial charge of discrimination with the Equal Employment Opportunity Commission (EEOC) alleging the Defendant terminated her because of her age and “in retaliation for making an internal complaint.”

Ruling

• Motion for Spoliation Sanctions Denied. The court denied the Plaintiff’s motion for spoliation sanctions, noting they had failed to establish that the Defendant had an obligation to preserve the two items of “critical evidence” at issue in her motion due to the Defendant’s 90- day data retention policy.
• No Obligation to Preserve. The Plaintiff did not demonstrate that Defendant had an obligation to preserve the documents beyond its 90-day retention policy because Plaintiff’s call to ethics and compliance hotline was not a “triggering event” that would have placed Defendant “on notice” to retain the weekly reports or summaries for potential future age discrimination litigation
• Understanding Duty to Preserve. The court stated that a duty to preserve evidence arises where a party “has notice that the evidence is relevant to litigation or should have known that the evidence may be relevant to future litigation,” and that such triggering events “are typically limited to demand letters, preservation requests, threats of litigation, or a party’s decision to pursue a claim.

Legal Analysis

By, Hon. Andrew Peck (Ret.), Sr. Counsel, DLA Piper

Employee complaints about workplace conditions that do not assert discrimination or the like, and do not mention litigation, are not enough to constitute “reasonable anticipation of litigation” so as to require a litigation hold.