A recent decision by U.S. District Judge Geoffrey Frost of Columbus, Ohio, reiterates the importance of companies placing litigation holds upon receiving notice of potential employment actions. In a case filed by the EEOC (Equal Opportunity Employment Commission) against JPMorgan Chase Bank NA in 2009 (case no. 2:09- cv- 00864, U.S. District Court for the Southern District of Ohio), the agency requested that the bank produce certain data maintained in electronic records, specifically information regarding skill login records that would have been kept by the bank’s mortgage unit. The records went back to 2007, and Judge Frost found that a litigation hold on those records should have been initiated upon receipt of notices sent by the EEOC in 2008 involving potential hostile work environment claims brought by female employees who were alleging that they were discriminated against when more lucrative calls were steered towards male workers.

In responses to discovery requested by the EEOC in the lawsuit, the bank claimed that routine purging resulted in the 2007 skill login records being destroyed. Judge Frost called the bank’s failure to preserve those records “inexcusable” and in finding that sanctions against the bank were warranted, characterized the bank’s conduct “at least negligence and {reaching} for willful blindness bordering on intentionality.” The court’s decision should be instructive to companies to immediately place litigation holds on any electronic or other records that might be relevant in a subsequent employment case upon notice of potential claims, either by a governmental agency or a current or former employee. Failure to do so could result in sanctions as discussed here.