Hold On!

Legal Holds and Personnel Moves

The latest twist in keeping your company safe during the current economic crisis is the effect it will have on legal holds. In our last issue, we wrote about the steps you should take after receiving a legal hold. This month, we discuss how the current economic crisis may have a further reaching effect – a Perfect Storm of Risk as it relates to your corporate data.

Today, many corporations are dealing not only with workforce reductions, but also the resulting fallout effects. After restructuring, companies often redistribute workloads and collect documents, computers, and other electronic devices from their former employees. Some immediately wipe and reformat hard drives in order to recycle them.

These seemingly simple and innocent actions could have drastic results. This is so, especially if these personnel changes include those involved in the protocols of electronically stored information as it pertains to legal holds, especially in IT, records management, or legal.

Remember, a legal hold comes about when litigation arises and involves the records or documents relevant to the matter.  While they don’t necessarily require all information to be saved, legal holds suspend the record’s retention schedules for all relevant information. The consequences of failing to preserve data subject to a legal hold can include fines, adverse jury instructions, and even sanctions. And these may take place regardless of whether the destruction was accidental.

Here are some helpful tips to protect you and your company:

1. Inform Everyone. All employees need to be aware of their responsibilities to preserve documents and other electronic information. Consequently, all data from departing employees must not be immediately destroyed. This means that IT must not reformat and redistribute hard drives – as well as reformatting servers or deleting employee server files or email accounts – until notified that the data is no longer subject to legal holds.
   
2. Assign a Contact Person. Depending on the size of the company, one person (or a small group of people) should oversee duties of monitoring the company “shuffle.” The contact person’s duties could include making sure everyone is aware of the company’s policies and procedures and keeping abreast of departing employees and whether they are subject to existing holds. This individual could also be the point person to answer all questions, which should be many.
   
3. Update Contact Information. This one may sound like a no-brainer, but it is imperative that your contact information of departing staff is accurate. They may need to be contacted during the course of an investigation or litigation. And while you’re at it, why not make sure that current employee lists, especially those involved with the data preservation, are also accurate.
   
4. Are You in the Loop? Make sure that the new custodians of the inherited files are aware of their responsibilities and the ramifications of failing to do so. If not, you may be right back at square one.

In addition, it’s important to make sure that your legal hold procedures are reviewed regularly as your company’s needs change.