In today’s business landscape, business records are, in large part, stored electronically. Businesses of many different shapes and sizes keep all kinds of records on various forms of electronic media. When businesses are involved in lawsuits, electronic records and data may serve as evidence. In some cases, however, electronic data or records are unable to be obtained because they have not been preserved. This failure to preserve evidence is called “spoliation.”
In cases where evidence is unable to be obtained because it has intentionally been made unavailable through destruction or concealment, the judge may issue an instruction to the jury regarding spoliation. A recent Texas Supreme Court decision, Brookshire Brothers, Ltd. v. Aldridge, No. 10-0846, S.W. 3d (2014), sets out clearer standards for what constitutes spoliation of evidence under Texas law, as well as clearer guidelines for when trial court judges may impose a remedy in cases where spoliation has been found to have occurred.
Businesses must be diligent in retaining their electronic records. If the business ends up involved in a lawsuit and records have not been preserved appropriately, the court can impose sanctions. There is, of course a risk that the failure to preserve records could prove fatal to their case. Perhaps even more importantly, there is the possibility that the business may need to pay damages to the other party if the court finds that the party who had a duty to preserve the evidence intentionally or negligently breached that duty.
In the Brookshire Brothers case, the Court reversed the lower court’s decision to award damages to the plaintiffs based upon a claim of spoliation of part of the store’s security camera footage. The segment of video which showed the accident in question occurring had not been lost, but the portion of the video which followed the accident had been deleted and rerecorded with subsequent days’ security videos, according to company policy. The Court found that there had been no intentional or negligent wrongdoing because there had been no efforts to conceal or destroy the video footage. In fact, footage of the accident had been preserved, because store management felt that it was important to keep documentation of the accident.
Although the recent Supreme Court decision clarified the rules regarding when spoliation remedies can be used, the Court did not set forth a specific length of time for which businesses must retain electronic records and data. Businesses cannot keep all of their records and data indefinitely, so this is an important issue in the eyes of business owners, who would like to have clearer guidelines that would specify exactly how long a business should keep each different type of business record.
While there is no specific length of time that electronic business records and data must be kept, each business should put some thought and effort into implementing a policy for storing, organizing, and maintaining its electronic records. Absent such a policy, your business’s electronic information is at risk of being deleted too soon, which could leave the business open to accusations of spoliation.
If your business stores records and generates data electronically, management and employees who work with the electronic information must know how to handle it properly. The Texas Business Litigation Attorneys at The Law Office of Alex Martinez can help you to create a data management policy that will help you to avoid accusations of spoliation. At The Law Office of Alex Martinez, we do our best to limit our clients’ exposure to liabilities and resolve legal situations effectively and efficiently. Our attorneys have the experience to protect your business and its assets. Call us at (866)ALEX MTZ or (956) 540 2255 to learn more about what we can do for your small business.