Records Retention And Recovery – Corporate Norms And Issues

In 1995 I was asked to participate in a litigation matter between a corporation and its insurance carriers concerning insurance coverage for remedial costs at a large, environmentally contaminated closed-down former industrial facility. One of the buildings on this site became known to the lawyers representing the company as “the infamous Building 8”. This building housed millions of documents retrieved from various locations at the facility while it was being shut down. It became apparent that the facility management had no document destruction policy, and thus Building 8 contained internal memoranda, notes, copies of correspondence, permits, operating records, inventory records, and the like from fifty years of operation. Needless to say, some of these documents, all of which were subject to discovery by the insurance companies in the litigation, contained material that was less than helpful to the company’s case. Of course, there were also a few helpful documents, but the overall usefulness of these records was outweighed by the negative impact they had on the conduct of the litigation. A second example involves e-mail. Several years ago, acting on an anonymous complaint that we later discovered was made by a disgruntled former employee who had been fired, a small army of federal environmental investigators descended on a client’s operating facility and, armed with a search warrant, literally commandeered the facility’s EH&S department. The investigators impounded the computers of the EH&S personnel and extracted all of the data from the hard drives of those PCs, as well as all EH&S related files from the hard drives of several servers used by the facility. These computers contained many years’ worth of stored e-mails, draft letters and memoranda, and other documents that provided grist for a four and one-half year criminal grand jury investigation of the facility and its EH&S staff. Both of these companies would have benefited from following a rigorous, enforceable, corporate records policy. Here is a third problem. My client had, during the 1960s, made a brief, and unprofitable foray into the nuclear fuel processing business. It ultimately sold the subsidiary, and was forced to give the purchasing company a broad indemnity against future liability. As might be expected, years later the facility was found to have considerable soil and ground water contamination both by chlorinated solvents and low-level radioactive material. Several years into the remediation program, my client discovered a tractor-trailer load of files, apparently removed from the subject facility, sitting in a parked trailer in a company-owned lot 300 miles away from the facility, where they had been for nearly thirty years. These documents were not helpful to the client, but had to be reviewed, at considerable cost, by paralegals. Moreover, several of the boxes turned out to have been mildly radioactive, setting off a chain of health and safety issues that consumed tens of thousands of dollars of legal expenses before they were resolved. Today, formal, enforceable corporate records management programs have become an extremely important element of overall corporate management. What was for most of the last century little more than a low level warehousing function is now a critical, actively managed, operating function that affects every level of corporate management. The rapid assimilation into corporate culture of electronic document management and the prevalence of e-email as the primary means of internal communication have created records management complexities the likes of which were not even conceived of fifteen years ago. Record preservation and destruction are no longer matters that can be handled on an ad-hoc decision making basis. Because of regulatory requirements affecting various classes of documents and the litigation consequences of ad hoc retention and destruction of corporate business records, and the need to have the ability to quickly retrieve documents in either a litigation or business negotiation context, a set of records management norms have evolved over time that have become the core elements of virtually every corporate records program. However, notwithstanding the existence of a set of norms (which are the basic elements of a