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The Legal Risk of Poorly
Managed Personnel Files
Real life examples of how mismanaged personnel files
can lead to legal liability for you.
Bret YawAssociate,
Ford and Harrison, LLP
Questions
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Questions will be answered
at the end of the webinar
Outline
• Overall Mentality Regarding Personnel Files
• Access to Personnel Files
• What’s In a Personnel File?– What Should Be Included?
• Discipline
• Evaluations
– What Should be Excluded?
• The “New” Landscape: Electronic Records– What Constitutes an Electronic Record?
– ESI Obligations
Overall Mentality Regarding Personnel Files
• A properly kept personnel file can be a useful defense in a lawsuit by an employee– Cannot overstate this
– Usually the first thing reviewed in litigation
– Keeping personnel files updated and accurate is very important
– Incomplete, sloppy or incorrect records can destroy an employer's defense to common employment law claims
• Think of a properly maintained personnel file as a “shield” against claims
Employee Access to Personnel Files
• Varies from State-to-State
– Numerous states, such as California, require
employers to provide employees with access to their
personnel file
– Many of these statutes allow employees to review
and copy their file at reasonable intervals
• Florida
– No right to access
What’s In a Personnel File?
• Documents include– Hiring documentation
– Jobs held, job descriptions, and pay
– Benefits elections
– Evaluations and disciplinary information
– Requests for time off (including FMLA)
– Notes from ADA interactive discussions
– Perks and other benefits
– Any notifications required (such as COBRA)
– Signature pages for policies
What’s In a Personnel File - Evaluations
• Employee Evaluations
– Scheduled evaluations
– Should be given by closest supervisor over employee
– Use forms for all evaluations
– Train supervisors to be honest and clear
What’s in a Personnel File - Discipline
• Discipline– Among most important documents
– Have policy on maintenance of reprimands or notes
– Keep with supervisor’s files or in centralized file
– Train supervisors on how to maintain information and communicate information to HR or other supervisors
What’s In a Personnel File – Discipline
• Why so important?
– If you don’t make a record of counseling or discipline
– your employee WILL deny it happened
• Gives rise to material factual dispute which
prevents resolution with SUMMARY JUDGMENT
– Employees should know when something goes in
their personnel file
What’s in a Personnel File – Discipline
• What/How to Document
• Produce contemporaneously with conduct
• Include:
• Date of document
• Name of employee and supervisor
• Name(s) of those present at meeting
• Type of discipline
What’s In a Personnel File – Discipline
• What/How to Document– Any prior disciplinary measures taken
– Reason(s) for discipline
• State facts, not conclusions or assumptions
• Provide specific examples
• Include dates, times, location, witnesses
– Describe impact
– Cite any applicable policy or rule
What’s In a Personnel File – Discipline
• What/How to Document
– Any progress, or the lack of progress since last
disciplinary action
– Expectation(s)
• Be specific; indicate required outcomes by specific
dates if appropriate
– Periodic meetings
What’s in a Personnel File – Discipline
• What/How to Document
– Any training or assistance that can be offered
• ADA Concerns?
– Any training or assistance that was provided
What’s in a Personnel File – Discipline
• What/How to Document
– Any corrective action taken
– Possible consequence if not corrected
• Very important
– Employee’s response or comments
– Signature of employee
• Provide signed copy to HR file and employee
What’s in a Personnel File – Discipline
• Best Practices• Document
• Document
• Document
• Be objective
• Whole truth and nothing but the truth
• Stick to the facts• date, time, what happened, witnesses, discussion with
employee, your response
• Review and use in decision making process for future discipline
• Review prior to evaluation
What’s in a Personnel File?
• Best Practices for Discipline/Evaluations
– Be consistent
– Be thorough
– Be objective
– Use plain English
– Be specific
– Maintain your focus on the job
– Be timely
– Be honest
– Be prudent
– Document your employees reaction AFTER YOU meet with
them- get them to sign document
What Does Not Belong in a Personnel File?
• Medical Records
• I-9 forms
• Garnishment orders
• Communications from counsel
• Other confidential communication
Welcome to the Electronic Age!
• Personnel files are not just paper records, but electronic
records as well
• Electronic records include:
– E-mails
– Attachments to e-mails
– Voicemails
• land line telephone voicemails
• cell phone voicemails
– Websites, Blogs
• employees sometimes may post disparaging remarks about
their employer on a personal website or blog.
– Instant Messaging
Welcome to the Electronic Age!
• Electronic records include
– Complaints or compliments from co-workers or
customers
• can be voicemail, e-mail
• can be e-mail from co-worker or customer OR
• can be e-mail from supervisor to himself
documenting a conversation with a co-worker or
customer
– “Employee Joe’s absences are putting a burden on the
rest of the department employees and they cannot get
their work done. Can you please talk to him?”
Welcome to the Electronic Age!
• Electronic records include
– E-mails from employees to supervisors
• asking for time off
• complaints
• responses to supervisor e-mails
Electronic Records – Caution!
• Remember that even separate files kept by a supervisor about a particular employee are considered part of an employee’s personnel file. – Example
• a supervisor’s file containing e-mails to himself documenting verbal counseling or conversations with an employee are part of the employee’s personnel file.
• Training is important– Train supervisors to use all electronic communications,
especially e-mails, regarding employees as if the employee will see it.
– People often write information in e-mails that they wouldn’t necessarily say out loud or write down on paper.
Obligations Regarding ESI
• Amendments to the Federal Rules of Civil
Procedure apply to every person or business
involved in federal court litigation
– New rules address the discovery of “electronically
stored information” (ESI)
– This includes ESI relating to or contained in an
employee’s personnel file
Obligations Regarding ESI
• The definition of ESI is vague. Most computer-based
information will be included in the category of ESI
• Therefore, the types of emails previously mentioned,
including those between supervisors and employees,
emails between supervisors regarding an employee’s
performance, and emails between an employee’s co-
worker and a supervisor regarding an employee all fall
into the category of ESI.
• Additionally, voicemail, websites, and instant messaging
should be considered ES
Obligations Regarding ESI
• In a lawsuit, ESI is the equivalent of a document
– Therefore, during the discovery period of a lawsuit, all
requests for documents include ESI
• Employers have a duty to preserve ESI just as
they would paper documents if litigation is
reasonably anticipated
– In other words, an employer must not destroy, alter or
fail to preserve ESI if litigation is reasonably
anticipated
Obligations Regarding ESI
• Don’t delete e-mails, voicemails, or other
electronic records from, to, or regarding an
employee
– Remember that these types of electronic records can
be part of the personnel file
Obligations Regarding ESI
• Adverse inference jury instruction
– Zubulake v. UBS Warburg (S.D.N.Y.)
– In an employment discrimination case, USB not only
failed to preserve important e-mails and lost various
others, several USB employees deleted relevant e-
mails against the advice of counsel.
– Court gave an adverse instruction, resulting in a jury
verdict of $29.3 million, including $20.3 million in
punitive damages.
Obligations Regarding ESI
• Monetary Sanctions
– Turner v. Hudson Transit Lines, Inc. (S.D.N.Y)
– Court imposed thousands of dollars in
monetary sanctions when the defendant
destroyed documents when it was on notice
of plaintiff’s lawsuit
Obligations Regarding ESI
• Dismissal of Claims or Defenses
– Computer Associates International, Inc. v. American
Fundware, Inc. (D. Colo.)
When the court found that the defendant deleted
electronic records after being put on notice of a
pending lawsuit, the court granted default judgment in
favor of the plaintiff
• Inability to Prove Defenses
ESI – How to Manage Obligations
• Have a document retention policy
• Train employees to comply with the policy
– Make sure supervisors are aware of what electronic
records (e-mails, etc.) are part of the personnel file
– Is your document retention policy being effectively
communicated to employees?
– Do your employees understand the policy?
– Enforce and monitor compliance – a policy is only
good if it is effectively implemented.
ESI – How to Manage Obligations
• “Litigation holds” are internal directives (or
directives from counsel) to preserve
documents that may be required for
litigation or government investigations
ESI - When to Implement a “Hold”
• Request for a file
– From a current or former employee?
– From employee or their counsel?
– Was the employee involuntarily terminated?
– Was there a threat of litigation from the employee?
• Demand letter from an attorney
• Receipt of EEOC charge
• Formal lawsuit complaint