Tags Archives: achieving compliance

The Value of a Cross-Indexed Storage System

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Following your Records Retention Policy (RRP) to a “T” can get you into trouble.

Once a company is involved in litigation, all relevant records must be preserved, regardless of the company’s RRP. Having a properly cross-indexed storage system provides a necessary tool to identify all relevant documents.

Case study: Trigon Insurance Co. v. United States, 204 F.R.D. 277 (E.D. Va., Richmond Dist. 2001)

Trigon Insurance Company sued the federal government for its failure to allow certain tax deductions resulting from lost contracts. To defend their case, the government hired litigation consultants, some of which were brought in as expert witnesses.

Because some of the reports entered as evidence were ghostwritten by litigation consultants, Trigon sought discovery of draft documents exchanged between the government and its consultants [by way of Fed. R., Civ. Pro 26(a)(2), which required the production of all materials reviewed by testifying experts.]

Following your RRP during litigation

Unfortunately for the government, the consultants had followed their business’ RRP and had destroyed the draft documents as they had reached their disposal dates. Trigon sought sanctions against the government for spoilation of evidence (i.e., the destruction or alteration of evidentiary materials).

The court held the government had sufficient notice that the documents were relevant to the litigation at hand and construed the document destruction as intentional destruction of evidence. As a result, a strongly prejudicial inference was allowed, which negatively colored the credibility of the expert witnesses. The court further held the government had a duty to preserve the evidence (despite its Record Retention Policy) which, by destruction, crippled the ability of Trigon to cross-examine the witnesses.

As a direct result of this decision, a subsequent case involving the same parties, Trigon Ins. Co. v. United States, 234 F. Supp 2d 592 (E.D. Va., Richmond Dist. 2002), led to a judgement of nearly $180,000 in favor of Trigon.

Cross-indexed is the key

Having a properly cross-indexed storage system would have made it much easier to identify and locate all relevant documents related to this case prior to the destruction schedule specified in the consultant’s RRP. BIS is in the business of helping you manage all aspects of your Records Retention Policy to help ensure costly errors don’t happen.

Does this sound like a records management service your company could benefit from? Call us at (513) 721-FILE. We’d love to help.

How a Records Retention Policy Can Save Your Company Money

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Let’s be honest. At some point in the future, even if you have never been sued before, it is more likely than not that your company will be involved in a lawsuit.

Knowing that’s the case, are you prepared? Having a comprehensive Records Retention Policy (RRP) covering all types of records may help you avoid losing a lawsuit and subsequently costing your company hundreds of thousands of dollars in damages.

Case in point: Hollingsworth v. Time Warner Cable, 168 Ohio App.3d 658, 2006-Ohio-4903.

Patti Hollingsworth worked as an audit coordinator for Time Warner Cable from 1989 until she was fired in 2002. In her last few months of employment, Hollingworth suffered from chronic sinusitis, entitling her to time off under the Family and Medical Leave Act (FMLA). During her leave, she became pregnant and a short time later was terminated — allegedly because of her poor job performance. Hollingsworth sued, asserting pregnancy discrimination under Title VII and discrimination and retaliation under FMLA.

No paper trail

At trial, Hollingsworth presented testimony that after the termination, Time Warner destroyed her error logs and erased her emails without reviewing them. Time Warner stated the error logs and emails were destroyed in accordance with its RRP. But testimony at the trial revealed Time Warner’s RRP contained no reference to error logs.

No choice but to pay up

Time Warner admitted that if they had this information it would have helped to prove the case one way or the other. By destroying the error logs and deleting Hollingsworth’s emails, Time Warner forced the jury to weigh the testimony of multiple witnesses in determining whether it had intentionally discriminated against Hollingsworth.

If the error logs and emails had been preserved, there would have been room for speculation. Without them, the jury believed Hollingsworth’s assertion that Time Warner had intentionally discriminated against her because she was pregnant and awarded her $576,812 in damages, legal fees, and back pay.

Plan ahead

BIS can help your company develop and implement a comprehensive Records Retention Policy. By working together with us, you can protect your company against lawsuits.

Does this sound like a records management service your company could benefit from? Call us at (513) 721-FILE.

Staying Ahead of the Curve

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Back in February, I mentioned the Lilly Ledbetter Fair Pay Act. One of the key components of this legislation requires businesses to maintain their payroll records indefinitely.

In the physical world, this requirement can become expensive and time-consuming as more and more records accumulate. In the digital world, not only is keeping the records easier, but so is maintaining them.

I predict that at some point judicial clarification of the Lilly Ledbetter Fair Pay Act will better define and enable businesses to dispose of payroll records after a specified timeframe.

Companies who act now to digitize their payroll records will be in a much better position when this clarification is handed down.

Our imaging application, called BIS4HR™, was developed specifically for HR records. With this application, making changes to disposal schedules is quick and easy. In the physical world, such changes are much more difficult because someone has to touch each box containing the physical records. In the digital world, records can be deleted with the click of a mouse.

Deleting old records is not the only thing made easier by BIS4HR™. Once records are digitized, they can also be retrieved with the click of a mouse. I know when I am writing performance reviews, I want to see what I put in previous reviews. When we had all paper personnel files, I had to physically retrieve the material I wanted to review. Now I can use BIS4HR™ to view what I want from anywhere in the world via the Internet.

Retention vs. Disposal

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Every well-managed company needs a records retention policy. That policy ultimately results in a records retention schedule.

But I prefer to focus on disposal rather than on retention.

There are only two reasons to maintain business files:

  1. For legal reasons–because you are required to do so by federal, state, or local regulations. You have no choice–you must achieve compliance.
  2. For administrative purposes–to help you run a better business. Records worth keeping can help you remember how you made decisions (the spreadsheets you used), what purchases have been made (frequency, quantities, price, etc. from purchase orders), and what employment actions you have taken (from personnel files), etc.
    These help you make good decisions in the future.

If the only reasons to retain records are to comply with regulations run a better business, isn’t it logical that all records should have defined “lifespans”?

In terms of regulated files, you should keep them only as long as you are required to do so.

You get no gold stars for keeping records beyond their mandated disposal schedule.

As for administrative purposes, what value is there in a 25-year-old purchase order (or, for that matter, even a 5-year-old purchase order)? As records age, they become less and less valuable. Think of it this way: “Old is cold.”

The sooner you dispose of unnecessary administrative files, the better off you’re likely to be–especially in the event of a lawsuit or an audit. The less stored material you have, the less there is to be used against you.

So when it comes to business records, remember: keep them only has long as you have to and dispose of them as soon as you can.

Execution Is Everything

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A recent survey showed an interesting split between attitude and action when it comes to data retention and disposition.

Apparently, most organizations don’t follow their own advice. A whopping 87% believe a formal records retention policy would allow them to delete unnecessary information. Yet fewer than half actually have a formal information retention plan in place.

I see this all the time: Having a disposal schedule is not enough. You must adhere to the policy you establish as a standard business practice. Because in the event of a lawsuit or audit, NOT following your own policy could result in a seriously negative outcome.

Simply having some sort of disposal policy will not insure a successful outcome from an audit or lawsuit. Following your policy is much more likely to produce a favorable result.

Think about the famous George Patton quote about a good plan executed today being better than a perfect plan executed at some time in the future.

It’s less important to have a perfect policy. It’s more important to execute the policy you have.

If you’d like some professional advice about writing or executing a records disposal policy, please give me a call: (513) 721-FILE.