Follow ACC Docket Online:  

Reduction in Force Records Management and eDiscovery Checklist

Faced with the need to execute a reduction in force (RIF), companies naturally want to move quickly and decisively in taking these painful actions. Nevertheless, companies also need to be careful that a RIF does not also create new records management and eDiscovery risks. The obligation to preserve and protect records and other important company documents extends may require preserving certain documents and information in an employee’s or departing employee’s possession.

Documents and information in a departing employee’s possession should be preserved in three circumstances: 

  1. The departing employee may have documents or information deemed relevant to an active legal hold. Under a legal hold, it is necessary to preserve documents and information relating to litigation or regulatory matters, until the matter is resolved and/or the hold is released. 
  2. The departing employee has records in her or his possession that have not reached their full retention period. 
  3. The employee has important and high-value business content that exists exclusively on the employee’s laptop. One company reformatted a departing marketing employee’s laptop, only to find that the laptop contained the sole copies of marketing brochures. (Note that under a well-designed records retention schedule, this high-value and important information is already defined as a record.) 

Information governance personnel, human resources, legal, information technology (IT), and information security staff must collaborate to ensure records, information under legal hold, and other important company documents are properly preserved and protected.  

RIF records management checklist 

  • The departing employee’s manager should coordinate with IT and information security to properly secure the departing employee’s business email, Office365 access, and other electronically stored information so that there is no disruption in access to that information.
  • The departing employee’s manager should also secure the departing employee’s company-issued items that may contain records or other information. Items subject to collection include, but are not limited to, the following: 
    • Company-issued phones, tablets, and other devices; 
    • Laptops; 
    • External hard drives, USB drives, and other removable storage media; or 
    • Any other storage media used to transport company data.  
  • The exit procedures need to explain and reaffirm to all employees that all company information including records and other documents are the sole property of the company, and may not be retained by the employee. This should be clearly stated in severance agreements. 
  • If the departing employee used any web-based file sharing service such as Box, the manager needs to get access to these sites, and ensure this information is migrated to a company repository and/or deleted. Access to these sites must be part of the severance agreement. 
  • Where practical, the departing employee’s manager, with the assistance of the departing employee, should document where the employee has stored information. This can be recorded in a standardized form. This form should cover all locations, devices, and media where paper and electronic information may be stored by the departing employee. Common examples include, but are not limited to: 
    • Personal computer hard drives, including removable storage (e.g., portable hard drives); 
    • Computer desktop files (e.g., MP3 or image files);
    • Personal folders on network drives, SharePoint, and other collaboration locations; 
    • Email data; 
    • Filing cabinets, desk drawers, and boxes stored offsite; 
    • Smartphones, tablets, and other devices capable of storing information; or 
    • Other cloud storage.
  • The employee’s manager should determine whether the departing employee is under any type of legal hold in connection with a lawsuit, audit, regulatory investigation, or other legal matter. If the departing employee is on hold, all relevant information should be migrated from the personal computer or other location into a centralized repository. 
  • The employee’s manager or another designated individual should take steps to assign responsibility for the management, retention, and disposition of the documents of the departing employee to other employees. 

Practices to avoid 

In the rush to execute a RIF, sometimes companies take steps that create liabilities down the road: 

Preserving hard drives

Collecting and saving the hard drives of laptops and workstations. Companies sometimes collect and save hard drives as part of the employee exit process, in case they need this information later. These hard drives more often than not pose a future eDiscovery liability. It’s better to identify any records, important business information, and/or information under legal hold, and move this information to a centralized repository, then reformat the drive. Keep a log of what was collected, and when the non-records and non-relevant information were destroyed.

Letting employees keep laptops

Some companies let employees keep their laptops. As these laptops may contain both business and personal information, letting an employee keep his laptop may also give him or her access to trade secrets or other sensitive information. If you do want to let employees keep a laptop, save the important information in a repository then reformat the laptop.   

Final thoughts

The biggest risks are created when these information governance and eDiscovery actions are postponed. “We’ll address that later” thinking can come back and haunt companies.

Visit ACC's COVID-19 Resource Center for more legal best practices on the coronavirus pandemic.

The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.