When you suspect employees may run to the Equal Employment Opportunity Commission (EEOC), you don’t want to take a page out of this company’s playbook. 

When three former employees of Corinthian Colleges went to the EEOC with complaints that Corinthian had discriminated against them on the basis or their race, it wasn’t what Corinthian did that got the employer in trouble, it’s what it didn’t do.

The employer had a policy that all former employees’ email accounts would be deleted 30 days after the termination of their employment.

But despite knowing the EEOC would take action against it, Corinthian failed to act to prevent standard operating procedure from deleting the ex-workers’ email accounts (i.e., vital evidence in the pending EEOC case), according to a trial court in Washington state.

Heavy fines

As a result of Corinthian’s inaction, the court levied a $25,000 fine against it — as well as a $10,000 fine against its attorney for failing to preserve the former employees’ email accounts.

In addition, Corinthian must pay the attorneys’ fees incurred by the former employees bringing suit against the employer.

And Corinthian must pay those fines no matter the outcome of the discrimination case.

An important reminder

In addition to fines, courts also have the power — when they find a party has failed to preserve evidence (or has deleted evidence) — to instruct a jury to assume that the missing evidence would’ve hurt that party’s case.

So the court’s order in the case against Corinthian offers up an important reminder to employers everywhere: You must act to preserve evidence when you know — or “reasonably should know” — that the evidence may be relevant to future litigation.

This requires letting employees know that they must preserve documents and electronic information — courts call this action a “litigation hold.”

The court determined that Corinthian failed to issue a litigation hold, resulting in the deletion of the email accounts.

Here’s part of the court’s ruling:

“In sum, the court finds, by clear and convincing evidence, that Corinthian’s and Corinthian’s counsel’s lackluster search for documents, failure to implement a litigation hold, deletion of evidence … constitute bad faith or conduct tantamount to bad faith.”

Cite: Knickerbocker v. Corinthian Colleges

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