Spoliation by Oversight
The National Law Journal, November 12, 2001

By Michael Starr and Jordan Lippner

The issue of spoliation-the culpable destruction or alteration of evidence-has particular resonance in the field of employment discrimination law, where the law not only bans certain acts but affirmatively requires employers to maintain the evidence of possible wrongdoing.

All litigants are subject to the general rule that "the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation" may result in an adverse inference. See, e.g., West v. Goodyear Tire & Rubber Co., 167 F.3d 776, 779 (2d Cir. 1999). But federal employment laws add a new twist by creating an obligation to retain documents even before litigation is a foreseeable prospect. See, e.g., 29 C.F.R. 1602.14; 29 C.F.R. 1627.3; 29 C.F.R. 516.5, 6 (implementing record-keeping requirements under Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act (ADA), the Age Discrimination in Employment Act (ADEA) and the Fair Labor Standards Act (FSLA)).

While the equities have always rightly tilted against those who destroy evidence in the face of a litigation, the same cannot be said for those companies who have been ill-informed or slow to implement proper document-retention policies for employment-related activities. As recent cases illustrate, the harsh penalties that apply to traditional spoliation are no less severe for what may be called spoliation by oversight.

Repercussions may go beyond adverse inference

The vast majority of jurisdictions in the United States have long followed the common law rule that "the trier of fact may draw an inference from the intentional spoliation of evidence that the destroyed evidence would have been unfavorable to the party that destroyed it." Beers v. Bayliner Marine Corp, 236 Conn. 769, 775 (1996). Or, put another way by the Connecticut Supreme Court: "omnia praesumuntur contra spoliatorem" - all things are presumed against a despoiler.

The drawing of an adverse inference, however, may be the least of a spoliator's problems. As no general counsel will soon forget, the destruction of documents in an ongoing race-discrimination suit subjected Texaco Inc. to a public relations nightmare and some of its senior executives to criminal penalties for obstruction of justice. In U.S. v. Lundwall and Ulrich, 1 F. Supp.2d 249 (S.D.N.Y. 1998), the government prosecuted Texaco executives who ordered the destruction of documents in the face of a race discrimination suit brought by the Equal Employment Opportunity Commission (EEOC) on behalf of a class of black employees. While the facts of Lundwall were quite egregious-the defendants having been caught on tape ordering the destruction of documents that were specifically requested in discovery-the prospect of prosecution for less egregious acts is not something to be taken lightly.

Of course, even in the absence of a criminal prosecution, courts have and will continue to punish a spoliator, not simply by drawing an adverse inference against him, but, in certain circumstances, by striking the spoliator's pleading altogether. See, e.g., New York Central Mutual Life Insurance Co. v. Turnerson's Elec., Inc., 721 N.Y.S.2d 92 (2d Dep't 2001). And while a spoliator may be tempted to defend his actions on the grounds that the lost evidence is not relevant and, thus, not discoverable in the first place, courts have turned a deaf ear to such pleas.

Such was the case in Sage Realty Corp. v. Proskauer Rose LLP, 713 N.Y.S.2d 155 (1st Dep't 2000), in which the court disposed of such argument by stating: "The sheer effrontery of this claim . . . is amazing. . . . Although plaintiffs now complain that relevance cannot be established in the absence of the tapes, it is the very peculiarity of many spoliation cases that the very destruction of the evidence diminishes the ability of the deprived party to prove relevance directly . . . ."

The alphabet soup that is employment law-ADEA, ADA, FLSA and OSHA, to name a few-has complicated companies' document-retention polices. Each of these statutes, either directly or through its respective regulations, mandates that employment records, time sheets, wage-and-hour data and other information be retained anywhere from one to six years. In fact, on the extreme end of the spectrum, the Occupational Safety and Health Act (OSHA) requires that documents concerning an employee's exposure to toxic substances be retained for 30 years.

Often it is not overly burdensome for human resource managers to control the intake and preservation of such documents. Problems may often arise, however, when individuals who are not trained in the fine art of employment law are thrown into the mix. That is what happened in Byrnie v. Town of Cromwell Public Schools, 243 F.3d 93 (2d Cir. 2001), in which the perils of failing to retain documents in accordance with statutory mandates is well illustrated. There, the school district for Cromwell, Conn., undertook to hire a part-time art teacher for its high school. Robert F. Byrnie was one of 41 teachers who applied. At the time of his application, Byrnie was 64 years old, had earned both a bachelor's and master's degree in art education and had taught art education at the high school level for 21 years, including five years as a substitute teacher in the Cromwell district.

After the applicant pool was narrowed down to 21, a panel of teachers ranked each of those remaining on a scale of one to five, with the individuals who received the five highest scores moving on to an interview round. At the interview round, the five leading candidates were each asked the same set of questions and were then ranked based on their responses and demeanor. Only those receiving the three highest scores were, according to the established guidelines, supposed to move on to the final round.

Citing his past service, however, the district allowed Byrnie, who had received the fourth-highest score, to move on to the final round of interviews. Following that round, Byrnie was deemed to be the least qualified of the four finalists. Cromwell's panel was unanimous in its choice, hiring a 42-year-old woman with four years' experience teaching art at the district's middle school. She had a bachelor's degree in fine art, but not in art education. Byrnie, brandishing his education degrees and 21 years of teaching, sued for age and gender discrimination.

After Byrnie's suit was dismissed on summary judgment by the trial court, the 2d Circuit reversed and remanded the case for a jury trial because it held "that Cromwell's destruction of evidence" strengthened Byrnie's evidence of pretext to the point that discrimination became a reasonable conclusion. It turned out that Cromwell had destroyed numerous documents from the interview process, including application materials, the ballots on which the candidates were ranked and notes made by the interviewers. While the school district could not state precisely when these documents had been destroyed, the superintendent testified that "the destruction of personnel records . . . after an employee search was concluded was a routine process." Id. at 108.

The 2d Circuit noted that while Byrnie had "clearly superior paper credentials," they were not so vastly superior to the selected candidate's as to permit a jury to draw an inference of discriminatory pretext. There were, however, certain procedural irregularities and explanatory inconsistencies that strengthened the discriminatory inference Byrnie was seeking. The court never needed to decide whether Byrnie's "mixed bag of evidence" was sufficient on its own to defeat the school district's summary judgment motion because, when combined with the school's wrongful destruction of evidence, a dispute of material fact was created.

'Byrnie' turned on document-retention rule

As the court observed, destruction of documents later sought as evidence is not itself spoliation. There must be "an obligation to preserve [evidence] at the time it was destroyed" and also a culpable state of mind. Jurisdictions differ on what state of mind a spoliator must have before an adverse inference will attach-some require the spoliator to have acted intentionally, others look for bad faith and others draw adverse inferences based only on the spoliator having been grossly negligent. The 2d Circuit found it unnecessary to decide those matters because "the destruction of evidence in violation of a regulation that requires retention can give rise to an inference of spoliation." Id. at 108, 109.

But, even then, there is no spoliation unless the party claiming to be harmed was "a member of the general class of persons the regulatory agency sought to protect in promulgating the rule." Id. at 109. Byrnie, as a job applicant, was intended to be protected by the EEOC's document-retention regulation with respect to his claims of gender and age discrimination. Moreover, since the records were destroyed as part of Cromwell's regular practice, the destruction was intentional (as opposed to accidental) and that was enough to establish the culpable state of mind needed for spoliation. Thus, the 2d Circuit concluded that "while [Byrnie's evidence] might not have been sufficient itself to defeat summary judgment, it does when coupled with the allowable inference of spoliation." Id. at 110-11.

The lesson of Byrnie is that the routine and unthinking destruction of documents related to employment decisions may effectively deprive employers of the weapon for summary judgment when the plaintiff's circumstantial evidence of discrimination would otherwise be too weak to withstand it. For want of a nail, a kingdom was lost.

Michael Starr is a partner in the Labor and Employment Group of Hogan & Hartson, L.L.P.

A version of this article appeared in The National Law Journal. This article is reprinted with permission from the November 12, 2001 edition of The National Law Journal. �2001 NLP IP Company.