In Knickerbocker v. Corinthian Colleges, a trial court in Washington state sanctioned an employer because it failed to preserve evidence and issued an insufficient litigation hold after the employer received notice of EEOC charges filed by three former employees. The decision provides a tough lesson for employers and counsel alike on the importance of a properly issued litigation hold.
When litigation appears reasonably likely, organizations must inform personnel of the need to preserve all forms of relevant information—especially electronic evidence given its sometimes fleeting nature—and then make sure that this information is actually preserved to avoid potential sanctions should litigation occur. Courts often sanction litigants that fail to preserve evidence with an order to pay a fine, attorneys’ fees, or with a jury instruction that the lost evidence would have hurt that party’s case. The employer in Corinthian failed to issue a litigation hold after notice of the EEOC charges and allowed the email accounts of the three former employees to automatically delete 30 days after the termination of their employment.
The court imposed a $25,000 fine against the employer, and $10,000 fine against its counsel, in part due to the employer’s failure to preserve the former employees’ email accounts. The court also ordered the employer to pay all costs and attorneys’ fees incurred by the employees’ counsel related to the discovery dispute.
The case serves as a powerful reminder for employers—particularly those that handle EEOC charges in-house—that the duty to preserve evidence is triggered the moment an EEOC charge arrives. This requires, at a minimum, that the employer notify employees of the litigation hold and ensure that they actually preserve documents and electronic information. The information technology director or similar employee should always receive notice of the litigation hold to disengage any auto-delete features for email and other electronically stored information.