Friday, February 7, 2014

When Do I Have to Turn Over My Devices?

Defendants in competition cases quickly realize that the discovery battlefield often sits in the land of electronic information. Devices such as smart-phones, laptops, tablets, thumb drives, and cloud storage programs potentially contain relevant information that may bear upon both liability and damages issues. Many times in these types of disputes, an employee's retention of actual paper is minimal, so that discovery may not appear at first blush to be that much of a burden on the employee and its counsel.

However, when an employer requests access to devices, the landscape changes. Employers - often rightly so - are suspicious that an employee has kept information electronically and may not have the digital footprint to track data to a particular device. An employee often reacts viscerally and may be surprised that such a request is even proper.

So under what circumstances will courts order the inspection of devices?

There are some important groundrules and principles to consider. Let's start with the basics, which tend to favor (at least initially) an employee's resistance to turning over devices for inspection:

(1) Many courts find that imaging and production of devices is an exercise that should be undertaken sparingly.

(2) Courts will deny requests for inspections where the request is too broad.

(3) If the employer does not make a connection between the device and the factual underpinning of the claim, then a court will be hesitant to order imaging of the device and inspection.

(4) Courts will frequently put in place protocols to ensure an employee's personal records are kept private and not otherwise exposed (for instance, to protect disclosure of personal photos, financial information, or tax records).

(5) Absent bad faith, employers bear the cost of the imaging.

So with that general landscape in mind, under what circumstances will a court likely order some production of devices for inspection?

(1) There is specific evidence tying a misappropriation of records to the particular device. An employer may, for instance, learn through an examination of a work computer that an employee inserted an external hard-drive the day she left. This would likely justify an inspection of the device by a third-party expert.

(2) An employee has destroyed information in violation of a court order or a duty to preserve evidence. For instance, if an employee admits tossing out a stolen customer list after receiving a summons, a court likely won't have much sympathy for any objection to a device inspection request. The Court would seem to have the inherent authority to order the inspection to see if other vestiges of the list remain somewhere.

(3) An employee's document production has been inadequate. If an employee obfuscates during discovery, then an employer legitimately could claim that the only way to ensure a complete production is to inspect devices to see if the employee has sent information elsewhere that he has failed to account for.

Having considered these general principles, what are the best practices for an employer to obtain an inspection of devices?

(1) Try to learn specific facts tying the claim to a device.

(2) Propose a fair, even-handed protocol for inspection that accounts for an employee's privacy concerns. Attach a draft protocol and order to a motion seeking such an inspection.

(3) Follow the discovery rules. A request for inspection is nothing more than a discovery request. Don't short-circuit the process by filing a motion. Understand - and follow - procedures for resolving discovery disputes (including meet-and-confer efforts with opposing counsel).

(4) Keep the request narrow. Don't ask for all devices kept within the employee's control or possession. A court won't order the production of a 12 year-old's iPod.

(5) Learn other facts first. Often times, the best approach is to take an employee's deposition first to lock him or her into testimony about how a particular device may have been used or what it may contain. At that point, the employer will be on stronger factual footing to request an inspection with specific admissions and testimony backing up the reasonableness of the request.

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