The case of Equal Employment Opportunity Commission (EEOC) and Alicia Farran v. Formel D USA, Inc. underscores the importance of information governance for organizations in a world increasingly entrenched in data. The opinion reminds businesses that courts do not accept a lack of a retention policy as a defense for deleting data that organizations had the duty to preserve. The case involves allegations of sexual harassment and retaliation against defendant Formel D USA, Inc. by plaintiff Alicia Farran. The EEOC filed a motion for spoliation sanctions due to Defendant's failure to preserve electronic evidence, including emails and data from work cellphones of two of Farran’s supervisors, the most important custodians in the case. The EEOC alleged Defendant’s failure to preserve this electronic stored information prejudiced the Plaintiffs.

The Court ruled that defendant had a duty to preserve relevant data as early as August 28, 2018, but failed to take reasonable steps to do so, particularly regarding the cellular data of the two supervisors involved in the alleged harassment. The EEOC argued that the loss of this evidence prejudiced their case, as it hampered their ability to establish claims related to Farran's allegations of retaliation. Defendant argued that it did not preserve the cellular data of the employees because it had no retention policy for cellular data. The court granted the EEOC’s motion for spoliation sanctions related to the lost cellular data and rejected Defendant’s argument that it did not preserve evidence that it had the duty to preserve because it lacked a valid retention policy. To that end, the Court opined “Defendant’s lack of a policy to preserve cellular telephone data does not absolve it of responsibility to preserve ESI under the federal rules.” The court emphasized the importance of the duty to preserve electronically stored information (ESI) when litigation is reasonably foreseeable. If Defendant had deleted cellular data pursuant to a valid data retention policy prior to the duty to preserve relevant data, the court likely have denied the EEOC’s motion for spoliation sanctions because such data would have been deleted in a defensible manner.

If your organization is seeking support with eDiscovery, our team has solutions to address all phases of the discovery process. At CODISCOVR, we deliver client-focused, defensible, and scalable solutions using advanced technology and intelligent review practices to meet eDiscovery, document review, and information governance needs in a manner that reduces the risks and costs associated with electronically stored information. Reach out to Nicholas Berenato, Associate Attorney, CODISCOVR. Nick focuses his practice on information governance and electronic discovery in the construction, higher education, financial services, antitrust, government investigations, white-collar, insurance defense, and health care and life sciences industries.