FEBRUARY 2011 NEWSLETTER

Employers: Beware the Protection of Electronically Stored Information in the New Technological Age

Pre‐Trial Litigation Discovery of Electronically Stored Information
Similar to how many employees may place themselves in unintended jeopardy from their reckless use of Facebook, Twitter, and other social media sites, employers should take heed to watch what their employees, voluntarily and involuntarily, transfer electronically. It is important for
employers to take certain steps to protect themselves from highly sensitive, confidential and/or embarrassing information unintentionally ending up in the hands of a counterparty or competitor.

ESI and Metadata
Courts have historically allowed and required the handing over of tangible paper files with respect to litigation discovery (a formal pre‐trial judicial proceeding of gathering information about a counterparty).  However, today as data retention has evolved from a paper‐oriented process to one that is dependent on computers, electronically stored information (“ESI”) is now allowable pre‐trial litigation discovery.  ESI is expansive and includes all electronic data such as email, digital voicemails, instant message conversations (Gchat, AIM, etc…), websites, browsing history, word documents, etc. including a subset of information called metadata which is “data about data.” Metadata loosely defined is information used to catalogue the content and context of information similar to a card catalogue in a library; however, it is more extensive and describes the characteristics, origins, usage and validating of other electronic evidence. It sheds light on the origins, context, authenticity, reliability and distribution of electronic evidence, as well as providing clues to human behavior.  It is the electronic equivalent of DNA, ballistics and fingerprint evidence, with a comparable power to exonerate and incriminate. Metadata is discoverable evidence that employers are obligated to preserve and produce.  More importantly, because metadata is the most fragile electronic evidence around, it is a short trip from mishandled metadata to spoliation sanctions. Thus, by this newsletter this office wants to emphasize to employers how expansive ESI is and that it may be used against them in litigation. Not only is there the direct electronic communication of email, instant messages, voice mails, etc…, but in today’s electronic age even more information can be found indirectly. A simple example would be a collection of simple Google search inquiries discovered in a misrepresentation/fraud case arising from the sale of worthless securities.  A search inquiry of “How to sell worthless securities?” gives evidence collaborating the misrepresentation/fraud. Many individuals tend to treat this type of direct and indirect communication as private; however, during litigation these searches may be subject to pre‐trial litigation discovery.

United States Supreme Court Approval of ESI
The Federal Courts have addressed electronic discovery in a 2006 amendment to the Federal Rules of Civil Procedure. This amendment recognized that ESI is discoverable material and allows parties to request and search ESI as part of pre‐trial litigation discovery provided the request is made with reasonable particularity. Pennsylvania has yet to have such a steadfast legislative rule of procedure, but the trend is
towards adoption of formal ESI discovery.   A Pennsylvania Court recently opined in favor of an ESI discovery request, but placed limitations on the requests as to the scope, sensitivity/private nature, the nature of the parties/case, and the cost. In addition, similar to other such discoverable material, employers have a legal duty to identify and preserve ESI. Similar to how Enron was not able to shred documents, employers cannot
delete and destroy databases if there is a pending case or even a future lawsuit reasonably anticipated or threatened.   Otherwise, the employer could be faced with heavy judicial sanctions. Employers must be cognizant that ESI is harder to destroy than simply pressing the delete button.
Many times, even though the information is deleted and the hard drive is destroyed, information can still be retrieved. Further, metadata should advise the other party whether or not you deleted whole stores of discoverable evidence violating the duty to preserve and produce.

How to Protect Oneself
There are a number of steps, while far from foolproof, that an employee can take to protect oneself from disclosing sensitive information to counterparties as a part of discovery:
• Evaluate your communication methods: Look at what communication systems you use (email, instant messaging, snail mail, phone, and face to face conversation). Evaluate what types of information are recorded for each communication medium and determine when it is optimal
to use each medium.
• Become aware of information recorded: Look at and be aware of any other type of tracking systems such as Google search inquiry recorders, website trackers, sniffers that record keystrokes, etc.
• Communicate with this awareness in mind: Since it is impossible to survive in today’s world without communicating electronically, be aware that certain communications are not in fact private and use the proper formality and awareness as one would in public or in court.
• Separate work from personal life: Keep separate email, cell phones, computers, etc… for business and personal purposes. This is so if your email, cellphone, or computer is seized in connection to a work lawsuit, there is a greater chance your personal communication, files,
and information will not need to be handed over and cause potential personal embarrassment.
• Speak in person if plausible: If plausible, speaking in person has the luxury of not being recorded. While people may be cross examined in a court as to the conversation, there is no word for word transcription as with electronic communications.

Conclusion
As the world moves faster and faster, there is a need for computer communication and recording that enable more fluid communication and enhanced information flow. Sometimes, enhanced information flow can be a drawback; however, any disadvantages can be minimized by
learning how to effectively navigate through the new computer inundated world.