In the post-Enron/WorldCom/Global Crossing world, business owners must confront a new reality - the proper retention of digital data. A recent employment discrimination case in the federal district court in Manhattan, Zubulake v. UBS Warburg LLC, illustrates the potentially high cost of just how much and which data should be retained. In that case, a securities trader, Laura Zubulake, charged UBS Warburg ("UBS"), her former employer, with gender discrimination and retaliation. Zubulake requested, in discovery, the production of all communications, including e-mail, relating to her that were sent or received by five specified employees over a two and one-half year period. UBS estimated the cost of restoring and searching backup tapes potentially containing responsive e-mail at $166,000 and the cost for attorney and paralegal review of all retrieved e-mail at $107,000. Responding to just one discovery request would cost UBS more than one-quarter of a million dollars. In light of Zubulake, businesses should consider the following in crafting their Data/Document Retention Policies:
1. List All Document Retention Periods Established by Statute or Regulation.
2. Establish Additional Retention Periods. Categories of information not subject to a statutory or regulatory retention period should be subjected to a specified retention period consistent with business imperatives.
3. Provide For the Routine Destruction of Documents and Data. Data and documents should be routinely destroyed upon expiration of a statutory or regulatory retention period or expiration of the period mandated by the policy. Backup tapes should be recycled on a regular schedule.
4. Encompass All Storage Media. Potentially discoverable data may reside on any form of storage medium - including network server, local hard drive, laptops, hand-held devices, optical disk storage, and backup tape. The policy should expressly apply to all of these media and specify variations in retention periods, if any, based upon the type of storage medium.
5. Suspend Routine Destruction to the Extent Necessary When Litigation is on the Horizon. Once notified of actual or anticipated litigation, a business should identify all records related to the "key players" and all other categories of records most likely to be discoverable in the litigation. These documents should be preserved in accessible form to avoid the cost of restoration and retrieval from backup tapes.
Remember, there is no requirement that one write everything down. If there's no document or e-mail, there's nothing to retain.
Matthew J. McDonough brings a strong legal background to the firm. Mr. McDonough practices in the areas of litigation, employment, personal injury, immigration and the representation of businesses.
