Does My Company Need a Document Retention Policy? What is a Document Retention Policy Anyways?

What Is a Document Retention Policy?

A document retention policy is a company policy, which establishes the customary practice and guidelines regarding the retention and maintenance of company records, and sets forth a schedule for the destruction of certain documents received or created during the course of business. Both state and federal laws require each company to keep and maintain certain types of documents for a specific time period. A company must retain certain records because a company is on notice of a pending litigation or they may contain information that:

    1. •Is relevant to anticipated litigation;

 

    1. •Serves as the company’s corporate memory;

 

    1. •Has enduring business value (for example, it provides a record of a business transaction, evidences the company’s rights or obligations, protects the company’s legal interests or ensures operational continuity); and/or

 

    •Must be kept to satisfy legal, accounting, or other regulatory requirements.

A record is any type of information created, received, or transmitted in the transaction of the company’s business, regardless of physical format. Examples of where the various types of information are located include:

    1. •Appointment books and calendars;

 

    1. •Audio and video recordings;

 

    1. •Computer programs;

 

    1. •Contracts;

 

    1. •Electronic files;

 

    1. •Emails;

 

    1. •Handwritten notes;

 

    1. •Letters, invoices, and other correspondence;

 

    1. •Memory in cell phones and PDAs;

 

    1. •Online postings, such as on Facebook, Twitter, Instagram, Snapchat, Slack, Reddit, Vine, and other social media platforms and websites;

 

    1. •Performance reviews; and/or

 

    •Voicemails.

The following non-exhaustive list illustrates some of the documents and records that federal law requires to be kept and maintained:

    1. •Tax related documents for at least 8 years;

 

    1. •Legal and tax related emails must be kept permanently;

 

    1. •Federal procurement contract and related weekly payroll documents for at least 5 years from the date the contract is completed;

 

    1. •All company records, including articles of incorporation, operating agreements, and minutes, must be kept permanently;

 

    1. •Employee health and safety documents for at least 6 years following the end of the calendar year the records cover;

 

    1. •Employee retirement and pension plans must be kept permanently; and

 

    •Employment contracts for at least 5 years from their last effective date.

What Are the Advantages and Disadvantages of a Document Retention Policy?

Advantages

There are many advantages that come with a company implementing a document retention policy, including:

    1. •Reducing legal risks, discovery costs, and time spent recovering documents associated with lawsuits and anticipated lawsuits;

 

    1. •Serving as an explanation for the destruction of records if the company is accused of evidence spoliation or asked to produce such records in a discovery request;

 

    1. •Reducing time and expenses spent location documents requested in discovery;

 

    1. •Eliminating sanctions for delay in locating evidence or responding to discovery;

 

    1. •Reducing the risk of accidental destruction of physical and electronic records;

 

    1. •Minimizing expenses associated with maintaining and organizing records;

 

    1. •Freeing up valuable storage space by destroying useless documents; and/or

 

    •Potentially limit the amount of data that can be searched.

Disadvantages

Disadvantages that come with not implementing a document retention policy, such as the accidental or intentional destruction of these records during their specified retention periods, could result in the following consequences for the Company and/or its employees:

    1. •Expenses and time spent recovering important documents;

 

    1. •Litigation costs for additional discovery;

 

    1. •Fines and penalties;

 

    1. •Loss of rights;

 

    1. •Obstruction of justice charges;

 

    1. •Inference of spoliation of evidence and spoliation tort claims; and/or

 

    •Contempt of court charges.

Does My Company Need a Document Retention Policy?

Beyond state and federal law requirements, a company has discretion as to how and for how long to retain and maintain their records. In order to prevent the potential legal headaches of accidental destruction of records or claims for evidence spoliation, a company should have at the very minimum, a document retention policy which sets forth guidelines for the destruction of records which state or federal has set specific requirements. For maximum efficiency, this policy should also be explained to all company employees in order to ensure its compliance, prevent any inconsistent activities of such policy, and further reduce any potential maintenance or litigation costs.

If you have further questions regarding document retention, our experienced attorneys can help. Call us or email us to schedule an appointment at (786) 837-6787 or info@epgdlaw.com.

*Disclaimer: This blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*