- When good isn’t good enough. A defensible and robust eReadiness program cannot be merely good; it has to satisfy the requirements of an inquisitive court.
- Procure buy-in. Get senior leadership on board to give you the support and authority you need, as well as staff in all ranks of your organization to ensure compliance.
- Ditch the cascades. Many organizations have failed in their retention duties by trusting middle managers to pass on executive mandates, so consider all-employee communications.
- Get your tape measures out. While data is mainly electronic, actual measurements — weight of paper shredded or gigabytes sequestered — are useful in tracking company-wide benchmarks.
When good is not good enough, how do you establish a consistent, measurable, and defensible global document retention program with high accountability from senior leadership down the chain of command, without adding legal staff, hiring an army of consultants, or buying expensive technologies?
Before In Re Prudential Ins. Co. of America Sales Litigation, more in-house lawyers probably felt pretty good about their document retention programs. In that case, plaintiffs sued Prudential over allegedly improper sales practices. Over the course of the litigation, Prudential’s document retention practices came to light and were heavily criticized by the court. What should be unsettling is the fact that many of its shortcomings are similar to document retention practices commonly found in many companies. For example:
- While Prudential’s senior leaders (chief executive officer, executive vice president, chief financial officer, and general counsel) all recognized the importance of the litigation and Prudential’s responsibility to preserve documents, they were not actively involved in formulating, implementing, communicating, or conducting the document retention policy. They all relied on others to perform these tasks;
- The CEO delegated the document retention program to the legal department. He testified he would be “extremely dissatisfied” if it were true that every Prudential agent deposed or interviewed claimed ignorance of the communications concerning document retention;
- The GC delegated the document retention program to two in-house lawyers but was not personally involved;
- The CFO had never seen the company’s document retention policy;
- When Prudential rolled out its document destruction program, instructions were distributed via email, but Prudential did not implement any training program;
- Email instructions were not followed up by paper notices and many employees admitted to ignoring emails due to high volumes;
- Prudential’s insurance organization was divided into three businesses and notices containing inconsistent information regarding document retention were communicated by different management-level personnel;
- The GC testified that the company relied upon employees receiving the emails to share information with those that did not have email access, but this didn’t happen;
- The court found deficiencies in the substance of the document preservation emails circulated by Prudential;
- The Prudential field managers did not certify compliance with the document retention program during pending litigation;
- While there was a document destruction program and preservation instructions were issued, the court found no evidence that Prudential had a “clear and unequivocal document preservation policy capable of retention by Prudential employees and available for easy reference.”
The court found that while Prudential had not intentionally thwarted discovery through purposeful document destruction, its haphazard, ineffective, and uncoordinated approach to document retention resulted in improper document destruction. Prudential was fined US$1 million plus plaintiffs’ fees and costs associated with the sanctions motion.
If any of these problems are disturbing (perhaps because you didn’t think they were problems before now), the good news is you can create a more robust and defensible program.
At my former employer, we developed a program I christened eReadiness, defined as the process of assessing/improving policies and practices for storing, maintaining, and retrieving data to increase preparedness for litigation, and reducing compliance costs and the risk of sanctions for noncompliance. eReadiness involved these 11 steps:
- Define the scope of the program;
- Get senior leadership support and use that to drive the program and compliance;
- Establish an eReadiness team;
- Join critical functions at the seams;
- Develop a business case for employees;
- Keep and toss the right stuff;
- Develop and disseminate training and communication tools;
- Get all the troops on board;
- Have designees on standby during the cleanup periods.
- Measure volumes of discarded documents on and offline.
- Celebrate progress towards increasing compliance with the business.
1. Define the scope
Even if you are a multinational company with a large global footprint, begin with a pilot consisting of a number of offices small enough to manage, yet large enough to expose shortcomings in your approach. With offices in over 30 countries, our initial pilot focused on 12 sites in the United States and Canada.
To define your new or updated program, consider standards from organizations such as the Sedona Conference®, an authoritative think tank that developed guidelines for electronic document retention and whose principles were cited in the Advisory Committee on Civil Rules Discovery Subcommittee Report on Electronic Discovery.
2. Get senior leadership buy-in
The Prudential court criticized the company’s top brass for paying lip service to the importance of document retention without taking “an active role in formulating, implementing, communicating, or conducting a document retention policy.” The court also stated “when senior management fails to establish and distribute a comprehensive document retention policy, it cannot shield itself from responsibility because of field office actions. The obligation to preserve documents that are potentially discoverable materials is an affirmative one that rests squarely on the shoulders of senior corporate officers. …”
For the GC and other senior leaders to simply delegate management of the document retention program to underlings is insufficient. In designing my company’s eReadiness program, our senior leaders were expected to:
- Support the program;
- Instruct their direct reports to do the same;
- Comply with the policies and procedures themselves;
- Issue communications as and when requested by the legal department (we drafted all the communications for them); and,
- Enforce the policies and support disciplinary measures.
3. Establish the eReadiness team
In Prudential, the judge ordered each field manager to certify that his or her office complied with the document retention manual during the pendency of the litigation. We took this a step further — it needed to be an ongoing practice and we wanted certification by each business unit and at each site.
Rather than relying on individual employees, we wanted the leadership within each department at every site to certify compliance.
A core component of the eReadiness program was a document “cleanup period” for which the company’s leadership would be held accountable. With no room to add headcount, we needed feet on the street to provide guidance and oversight at all company sites during the cleanup period. Thus we established the following eReadiness team:
While we chose the labels above, you can certainly select titles better suited to your organization. It is important to note that below the CEO and SVPs, the selection of the eReadiness team is not mechanical nor is it based on existing job titles or responsibilities; the art is in selecting the person most likely to buy into the program with the least resistance, and who has sufficient leadership clout to engage his or her team and maximize the likelihood of compliance.
With our pilot eReadiness team, our human resources grew from a small team of three (the GC, associate general counsel — litigation, and litigation paralegal) to 153: the CEO, his 10 SVPs (representing each function within the company), 10 function leads, 12 field managers (one per pilot location), and 120 site leads (12 sites x 10 departments). It was easier to secure buy-in from the rest of the eReadiness team because the SVPs and function leads had hand-picked their best leaders.
4. Join critical functions at the seams
Some of your sites or departments may have standard operating procedures (SOPs) or other controlled documents containing retention periods that conflict with your global document retention policy, or with SOPs within the same department at other sites. The SOPs typically delve into more detail in identifying documents specific to each department, but in some cases there is overlap; for example two sites may have different retention periods for employee HR files and neither is consistent with the retention period in your global policy.
There’s no easy way to address this challenge but it can be done. We assembled document control managers across the company and commissioned a global harmonization project to identify all SOPs across the company, then determine a single retention standard for every document identified in each SOP by each department. This project took more than a year to complete, but could then fold the results into a “clear and unequivocal document preservation policy capable of retention by employees and available for easy reference.”
The eReadiness program could not wait for harmonization perfection, however. So in the meantime, employees were instructed first to comply with the global document retention policy, then SOPs or other departmental standards. If these documents conflicted, they were to take the most conservative approach and comply with the longest retention period for any specific document.
Human resources and information technology
A critical area requiring attention is preserving custodians’ data when employees leave the company. To prevent data loss, we corralled HR and IT into a litigation response team. HR added a step in the employee exit process where every HR manager would determine whether the departing employee was a custodian whose data was subject to a litigation hold. If so, HR would notify my paralegal and IT, triggering steps to preserve the data and request the custodian’s post-employment cooperation in the litigation if needed. These changes required negotiation and agreement with the senior executives of both departments. Without their cooperation the legal department has to do its best to secure employee-level compliance but obviously this is not ideal.
5. Develop a business case for employees
While it’s clear why any legal department wants to improve document retention practices, these interests don’t translate into compelling reasons for the business. Many in-house teams have learned (through hard knocks) that employees do not simply comply because “the legal team said so.” Most employees already feel they have too much to do with too few resources and have no interest in implementing another shiny new initiative unless it provides significant benefits for them. Thus developing a business case for compliance with input from the eReadiness team is critical to winning employees’ hearts and minds.
Potential components of a value proposition that can be communicated during training include:
- Fewer interruptions from the legal department requesting litigation documents (certifications confirmed compliance with the document retention schedules, negating the legal department’s need to conduct fishing expeditions);
- Reduced cost of retaining too much data;
- Avoidance of civil and criminal court sanctions for failure to properly preserve documents;
- Sufficient notice, direction, and opportunity to clean up documents;
- Improved operational excellence and compliance with company policies; and
- Overall, fewer calls from Legal and less ad hoc work.
A surprising criticism from the SVPs was that a one-day cleanup period was insufficient to accommodate business activity; no one was setting aside important plans to clean up. Many companies have a one-day cleanup period, but anyone who is out sick, on vacation, traveling, or in all-day meetings misses that window and even though those employees may certify compliance, whether they actually do a decent job of cleaning up when they return to the office is anyone’s guess. Thus we made a critical decision:
Cleanup period was extended from one day to two weeks once a year.
This seems counterintuitive for employees too busy to cleanup for a single day. No one actually spent the whole two-week period cleaning up, but the longer window gave employees greater flexibility in setting aside times during their regular work schedule in between meetings, travel etc. It also gave employees responsible for cleanup in common areas (e.g., document control areas, warehouses etc.) more time to do an adequate job.
After consulting with the site, function leads, and field managers to determine what periods would be least disruptive to the business, we published a schedule designating every site’s two-week period and the final completion date by which all cleanup was to be completed. We avoided year-end, financial reporting periods, audit periods, and other times when the business was focused on other critical activities.
6. Keep and toss the right stuff
At a single Prudential site in Cambridge, Massachusetts, approximately 9,000 client files were improperly cleansed and 80 document folders destroyed. Despite the email instructions for document preservation, documents were destroyed in offices in three other states. Documents were also “spirited” out of the Syracuse office to avoid detection by internal Prudential compliance review teams (a disciplinary issue of another shade). The absence of a document index made it impossible to determine what was destroyed so the court relied on National Association of Radiation Survivors v. Turnage to infer that the destroyed materials would have been relevant and led to proof of a claim.
Compliance with a document retention (rather than destruction) program requires employees to be discriminating when they determine what to throw away and what they keep, and this needs to be emphasized throughout the document retention program. Clear exceptions should also be articulated.
Under the eReadiness program, before employees began their cleanup, we armed them with a checklist of tools that included:
- We resent every active litigation hold memo they had received (these were sent to specific custodians for specific cases in litigation);
- The global document retention policy;
- Their department’s SOP for document storage, retention, and archiving;
- An unlisted document form; and
- The eReadiness team contact list.
The first step before purging documents was to first verify that all documents under litigation hold were preserved and separately sequestered. If your company uses a technological litigation hold solution, this will help.
7. Develop training and communication tools
In addition to criticizing the lack of a training program, Prudential’s failure to communicate in both online and offline methods and ensure that all employees received instruction, the court found these substantive defects in emails issued by the company:
- Copies of the court’s document preservation order or any directive regarding the order were never communicated;
- Emails alluding to “litigation alleging improper sales practices” were too general;
- These emails failed to warn of sanctions provided for by the Federal Rules of Civil Procedure, civil contempt for violation of an Order of the Court, or criminal contempt under 18 U.S.C. § 401(3);
- The emails failed to encourage non-management employees to report evidence of document destruction through a telephone hotline or other mechanism;
- While the emails provided names and phone numbers of contacts if employees had questions about document retention, no specific person was designated as a primary contact for document preservation.
Document preservation orders can be communicated in litigation hold notices targeted at specific custodians for each individual case. The substantive communication deficiencies can be addressed in carefully worded instructions. We used a “train the trainer” approach to cascade from the function and site leads to all employees, backed up by random spot checks to determine whether employees were receiving the message. Within our company, because “eReadiness” could only mean one thing (which would be unknown to an employee who hadn’t heard about it) it was easy to identify communication gaps.
This guidance applies to all documents or copies of files, materials, and other records maintained by X Company, whether generated internally or externally. The term “Document/s” includes the following:
- Typed or hand-written correspondence (letters, faxes, or memos), notes, communications, reports, ledgers, statements, books, pamphlets, periodicals, appointment calendars, work papers, notebooks, minutes, and calendars;
- All agreements;
- Electronically stored information (e.g., email messages, documents stored in applications, on diskettes, back-up tapes, zip drives, network drives, computer files, or hand-held devices);
- Slides, photographs, movies, tapes, and electronic or audio visual records;
- Graphs, charts, spreadsheets, pictures, microfilm, and microfiche;
- Research, development, patent, and other trade secret records;
- Case and product complaint files and investigation reports;
- Product design, testing, feasibility, production, and change records;
- Product package inserts, instruction for use, manuals for operation and safety, and product labeling information;
- Production quality control and inspection records;
- Product performance records (e.g., warranty claims, repairs, technical complaints);
- Sales and marketing records;
- Documents relating to litigation, disputes, claims, or settlements.
The eReadiness approach
The field managers posted notices on the company’s electronic and offline bulletin boards to reinforce the message and advertise upcoming stages of the program. Scrolling presentations ran on television monitors in cafeterias and public areas at each site in the two weeks leading up to and during the cleanup period. Legal developed a new eReadiness intranet site with two faces: an employee-facing site and a more expansive version exclusively for the eReadiness team containing:
- eReadiness overview — A complete presentation defining the eReadiness program, value proposition, and providing concise checklists and step by step instructions for employees, including instructions on how to suspend routine destruction upon receiving litigation holds or preservation orders, how to handle multiple document copies and versions, how to completely delete electronic data, and all the online and offline locations they should clean up.
- Site-specific cleanup schedule — The two-week period during which each site was to clean up its online and offline data. Schedules were staggered to manage the potential volume of queries to the eReadiness team, which turned out to be quite manageable.
- Document retention policy — Consider refreshing your approach with a tool such as the Record Retention and Destruction Current Best Practices, a comprehensive guide containing best practices from companies including DuPont and Kroll Ontrack, analyzing landmark cases and providing guidance on all aspects of records management. Some of these practices were incorporated into the eReadiness program. Given our employees’ low appetite for complex legal documents, we simplified the document retention policy to comply with our new five-second rule: An employee holding a document should be able to determine what to do with it in five seconds or less. To accomplish this, where possible, the legal department condensed each document classification to a single rule (e.g., five-year maximum retention period for emails and all correspondence unless otherwise stated) with a minimum number of exceptions.
- Site and department-level document retention SOPs — Listing all of them in one place provided employees easy and comprehensive access.
- eReadiness contact list — Employees were instructed to escalate issues to their site lead, then the function lead, then the legal department. The site and function leads received additional training and know when to escalate.
- Talking points — For senior leaders, function leads, site leads, and field managers. Some talking points were to enable leaders to respond to common questions, others were scripts to be disseminated in online and offline communications (including emails, company-wide announcements, on bulletin boards, and in staff and shop floor meetings).
- Unlisted document form — If, after consultation with the respective site and function lead, a document didn’t fit into any of the retention categories, employees completed this form, attached the document, and submitted to the legal department for guidance.
- Cleanup frequently asked questions — compiled from the busy employees’ perspective, these included blunt questions about why employees should comply and what if they were too busy.
- Site lead certification form — For site leads to complete after all employees in their department at their site have completed cleanup.
- Function lead certification form — Certifying the entire department had completed cleanup once all site lead certifications had been submitted for that department.
Consider a log and hotline
While it is a difficult step, consider the feasibility of using some sort of log to track destroyed documents. Also determine whether you can provide an email and phone hotline for employees to contact if they make mistakes or learn of problems. This can be as simple as designating someone in the legal department. If your company already has one or more hotlines (e.g., an ethics hotline manned by a third party vendor with localized numbers and language in every country of operation), you may be able to use an existing vendor to add a line for document retention calls.
Toss the legalese and speak plainly
To make all documents user friendly, consider tossing the legalese and adopting an approach like the plain English standard of writing. It won’t come naturally but even your first attempt will likely generate encouraging feedback from the business when all instructions and documents are written simply.
Provide offline employee access
For employees that don’t have email or online access at work (a common reality for companies with manufacturing facilities), you may be able to leverage already existing kiosks to upload information about all things eReadiness, and employees should be allowed time to review that information. In parallel, managers can issue paper copies of the materials to employees.
Develop a communications plan
For ease of adoption and compliance, consider rolling out a communications plan to site leads and field managers for implementation. Each site can customize but the basic guidance should be consistent.
Avoid the cascading trap
Since cascading through managers failed in Prudential’s case, consider aiming all announcements and communications directly at employees, beginning with the executives down the chain of command. In rolling out our program, when field managers issued site-wide communications, the legal department received copies for verification and preservation. We took training seriously, with the GC participating in training the executives, and the associate general counsel (me) flying to our largest sites to conduct in-person training for the eReadiness teams as well as managers and groups of employees in townhall-type meetings. The balance of sites were trained through webinars and teleconferences.
8. Get all the troops on board
Enough can’t be said about getting buy-in along the entire chain of command. For a program of this magnitude, this is no easy task. When you begin peeling away layers of rhetoric to find the hard truth about document retention compliance, don’t be surprised if you find ignorance and downright resistance (and maybe even contempt) even within your senior leadership ranks. Whether you overcome these challenges by gentle persuasion or hammers from HR or the CEO (which is why you must have his/her buy-in to begin with), attaining compliance is critical because many employees will decide how seriously to take your program based on the tone and actions from the top. Before eReadiness, we had a senior vice president who publicly boasted he had retained every single email in his 20 years with the company.
The day the SVP cleaned out his email inbox per the document retention policy was the day his entire organization committed to document cleanup.
9. Be present when it happens
During the two-week cleanup period, all critical players should be ready at their posts. I walked around to each senior leader’s office, answering questions, and providing support. Senior leaders cleaned out their computers and cabinets and encouraged employees to do the same. The function leads manned their phones, answering questions, and documenting comments and complaints. The site leads roamed the halls of their respective departments making sure employees understood what to do, and addressed and escalated questions. My paralegal fielded questions from the function and site leads. Rows of recycle bins were conveniently stationed around each participating site and field managers watched the volumes of trash and recycling and coordinated removal with their third party contractors. An unexpected rush arrived towards the end of the second week as procrastinators kicked into high gear. This caused recycling and trash to overflow and field managers had to scramble for new receptacles.
The quality and clarity of your communication and training program will directly impact the effort required during the cleanup period.
All this sounds labor intensive but interestingly, when cleanup time came we received very few inquiries because employees said the instructions and chain of command were so clear they were able to resolve most queries without it escalating to the legal department.
Sample eReadiness checklist and instructions
GETTING STARTED CHECKLIST
You need these documents (your “tools”) to get started:
- These cleanup instructions
- Any litigation hold memo you received
- X Company document retention policy
- Your department’s standard operating procedure for document storage, retention, and archiving
- Unlisted document form
- eReadiness contact list
Download these documents from the legal department eReadiness intranet site at www.xcompanyereadiness.com or obtain them from your manager.
WHAT SHOULD YOU CLEAN UP? EVERYTHING!
- Case files
- Day planners
- Sales and marketing materials
- Voicemail messages
- Other Company X documents
WHERE SHOULD YOU CLEAN UP? EVERYWHERE!
- Shared and external drives
- Other Company X personal locations
IF YOU ARE RESPONSIBLE FOR DOCUMENTS IN COMMON AREAS
- Secured cabinets/closets
- Inventory control areas
- Locally stored boxes
- Other Company X common areas
OTHER INSTRUCTIONS MAY INCLUDE
- Instructions on what and how to preserve before cleaning up the rest
- Locations in the email folders to be examined
- How to properly delete online documents
- What to shred/recycle/trash
- ow to deal with multiple document copies
10. Measure everything measurable
The true measure of success for any corporate initiative lies in its metrics. Measuring the success of our pilot required the assistance of the IT department, which measured the movement of electronic volumes, and the field managers, who measured the volumes of recycling and trash eliminated during the cleanup period. My paralegal collaborated with site and function leads to chase and monitor submission of completion certifications. While some employees started their cleanup early (and some likely continued beyond the two-week time frame), for consistency the legal department only measured volumes eliminated during the two-week cleanup period. By the end of the US pilot and ensuing rollout to a total of 28 sites in nine countries, the company boasted:
- Thirty tons of recycled or shredded paper.
- Net electronic data movement of 770 gigabytes. The metric was measured this way to account for deleted emails, documents moved from email to the company’s servers, and documents purged from those servers.
We published the pounds of waste per site and per employee to account for differences in location size. By the time eReadiness rolled out across the organization we had tossed more than 100 tons of paper we should not have had — enough to fill a train car. As we achieved compliance globally, we expected these numbers to decline as employees would have less to discard each subsequent year.
11. Celebrate your wins
Employee recognition is important for continued engagement. In our case, the CEO announced the results and thanked employees for participating. Legal awarded company sites and functions for specific achievements, including:
- The largest net electronic movement;
- The first three site leads to submit completion certifications;
- The first department to complete cleanup and submit all its site and function lead certifications; and
- Individuals and teams were recognized for outstanding support and contribution to the eReadiness effort (some departments came up with fun ideas like bringing cookies or popcorn and drinks on Jean Day Fridays, or challenged counterparts at other sites to finish first).
Be cautious about issuing awards for largest cleanup volumes since the objective is to retain and toss the right data according to the document retention policy.
We collected feedback from all members of our eReadiness team and random employees. This feedback was communicated to senior leaders and employees along with corrective actions taken where necessary. The two items employees applauded the most were:
- The checklists and training, which set clear direction and expectations; and
- The two-week cleanup period, which provided employees adequate opportunity to clean up.
While no program is bulletproof and you will undoubtedly identify other solutions in your own program, you can take significant steps to move from what you may have perceived to be a “good” document retention program that apparently wouldn’t pass muster under the Prudential standard, to a much more robust, consistent, measurable, and defensible eReadiness-type program with high engagement and accountability from senior leadership down the chain of command.
And all without adding legal staff, hiring an army of consultants, or buying expensive technologies.
eReadiness is a service mark filed by the author.
169 F.R.D. 598 (D.N.J. 1997).
Id. at 613.
Id. at 617.
169 F.R.D. at 604.
Id. at 615.
Id. at 617.
Id. at 613.
18 U.S.C. § 401(3) empowers the court to fine or imprison a party for contempt of its authority for disobedience to a lawful writ, process, order, rule, decree, or command. F.R.C.P. 16(f) and 37 provide for sanctions for failure to comply with a pretrial order, produce discovery or witnesses.
115 F.R.D. 543, 557 (N.D.Cal. 1987)
169 F.R.D. at 615.
Id. at 601.
Plain English for Lawyers, 5th Ed., Richard C. Wydick (July 30, 2005).
See e.g. 169 F.R.D.at 607.