Technology Company Sanctioned for Failure to Preserve Former Employee Data; Higher Expectation of Competence for Technology Companies in Managing ESI
14 October 2010
Mayer Brown Legal Update
A technology company was held to a higher standard of competence in implementing its preservation obligations by the District Court of the Southern District of New York, which imposed sanctions on the company for discovery violations in its defense of a lawsuit filed by two former employees. The Court’s order is a reminder that the departure of an employee is a situation fraught with potential electronic discovery challenges, that in-house counsel has a continuing responsibility to monitor the implementation of legal holds, and that any misrepresentations of discovery efforts (even if not intentional) can have negative consequences.