Must an employer preserve business-related text messages between employees using their personal cell phones? Can a judge punish an employer for failing to do so? According to a federal judge in Texas, the answer to the first question is - it depends on the circumstances. The answer to the second question is - “YES.” And depending on those pesky circumstances, the punishment can be severe.

In Miramontes v. Peraton, Inc., the plaintiff claimed that he was selected for a reduction in force because of his age. The facts are straightforward. Shortly after Peraton acquired the company at which the plaintiff had been employed for 27 years, it began a series of terminations internally referred to as “Project Falcon.” (Note to self: Avoid using secret agent code names for RIFs.)

The plaintiff was selected in the first round. When notified of his termination, he claims that his “supervisor unilaterally brought up his age, telling him twice, without prompting, that he was not being terminated because of his age.” (Note to self: Do not deny something when no one has accused you of it.)

Before filing suit, the plaintiff’s attorney sent the company a demand letter seeking $500,000 and instructing the company to preserve all documents regarding the plaintiff’s claims, including “texts.” The company issued a litigation hold letter which, regrettably, did not refer to text messages.

When one of the managers who selected the plaintiff for termination was deposed, he admitted having read the part of the demand letter asking for money, but not the part about preserving text messages. He also admitted that “immediately” after receiving the demand letter he sent “one or two” text messages to the other manager allegedly involved in selecting the plaintiff. He recalled that one of the texts asked, “Have you seen this?” He generally recalled the objectives of the texts to be “I got this [letter],” and to make sure the Chief Legal Officer saw it. But he could not produce the texts because no one at the company told him to save text messages and he regularly deletes them within 48 hours.

The company filed a motion for summary judgment, claiming that the reason for the reduction in force was not a pretext for discrimination. The plaintiff responded with a motion for sanctions, claiming that that the company failed to preserve relevant text messages between the managers who selected him. The plaintiff argued that the failure to preserve texts warranted entry of judgment in his favor and against the company. In other words, according to the plaintiff, the only thing left to be decided would be how much money he should get.

In deciding whether to award sanctions the judge considered the following:

  • Whether the company controlled the texts and had a duty to preserve them.
  • Whether the texts were intentionally destroyed.
  • Whether the company acted in bad faith.
  • Whether the company’s failure to preserve the texts caused the plaintiff to suffer injury or prejudice.

If the answer to these questions was “yes,” the judge concluded that she had discretion to impose just about any sanction she deemed appropriate, including entry of judgment for the plaintiff. (Note to self: Do not mess with a federal judge.)

The company argued that it did not control the text messages because it did not provide the managers with their cell phones, the texts were on their personal devices, and no policy signed by the managers gave the company the right to obtain the messages. Nonetheless, the judge found that because “employees regularly conducted business on their cell phones … [the company] had control over the text messages.”

It was all downhill from there for the company. The destruction clearly was intentional, since the manager admitted he deleted them. As for bad faith, the judge found that the company’s “failure to preserve [potentially relevant] text messages, despite receiving a litigation hold letter specifically asking that they be preserved, demonstrates bad faith.”

As for prejudice, the judge recognized that the texts (1) were sent “immediately” after receipt of the demand letter, (2) they were between the managers who “could” have made the decision to select the plaintiff for termination, and (3) the manager who deleted the texts admitted reading part of the demand letter, but not the part about preserving texts. As a result, the judge found that the texts “could” have supported the plaintiff’s claims, and that he was prejudiced by their deletion.

As sanctions, the company’s motion for summary judgment was denied. Ouch! The judge also allowed the plaintiff additional discovery and set a short trial date. Ouch! Ouch!

All of that because missing texts “could” have supported the plaintiff’s claims. They could have been innocuous. But because they had been intentionally deleted, nefarious motives could be ascribed to the company.

Do your employees regularly use their personal devices to conduct business? Do your policies address the retention of business-related information on those devices? Do your litigation practices include requesting relevant text messages from “key players” and following up on those requests to get them? If not, there may be a sanction waiting for you somewhere out there in the wacky world of employment litigation.

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