1.
EMC
SourceOne eDiscovery – Kazeon
Best Practice Webinar Series
with
McCarter& English
“DOCUMENT RETENTION & EMPLOYEE
TERMINATIONS: INCREASED RISK O F ESILO SS
INTO DAY'S ECO NO MIC UNCERTAINTY”
© Copyright 2010 EMC Corporation. All rights reserved.

2.
Presented by:Presented by:
Alitia Faccone, Esq.Alitia Faccone, Esq. PartnerPartner
Gina Trimarco, Esq.Gina Trimarco, Esq. AssociateAssociate
James D. Shook, Esq.James D. Shook, Esq. Director, E-Discovery andDirector, E-Discovery and
Compliance Legal GroupCompliance Legal Group
(973) 848-5376(973) 848-5376 (678) 261-7703(678) 261-7703 (973) 848-5328(973) 848-5328
afaccone@mccarter.comafaccone@mccarter.com shook_jim@emc.corpshook_jim@emc.corp gtrimarco@mccarter.comgtrimarco@mccarter.com
INCREASED RISK OF ESI LOSS IN
TODAY'S ECONOMIC UNCERTAINTY
DOCUMENT RETENTION & EMPLOYEE TERMINATIONS:
McCarter & English, LLP
EMC Corp.

3.
3
IT’S
DO
Desk Set ©
YOUKNOW WHEREYOUR IS?
DATA

4.
4
TIMES HAVE CHANGED
downsizing
layoffs
term
inations
m
obility
CD
personal email
USB
drive
DVD
paper
hard files
Departing employees trigger risk of data loss

5.
5
TIMES HAVE CHANGED
Generations X & Y
 Seek highest pay and best working conditions
 Seek meaning and purpose
 Career aspirations vs. family & personal
interests
 Seek highest pay and best working conditions
 Seek meaning and purpose
 Career aspirations vs. family & personal
interests
 “Company people” who created the 60-hour
work week
 Individuals born between ‘57 & ‘64 held an
average of 10.8 jobs between the ages of 18
and 42
 “Company people” who created the 60-hour
work week
 Individuals born between ‘57 & ‘64 held an
average of 10.8 jobs between the ages of 18
and 42
Baby Boomers
Silent Generation
 60% of the workforce was unskilled
 “Organization Man”
 Security/Risk adverse
 60% of the workforce was unskilled
 “Organization Man”
 Security/Risk adverse
Employee mobility vs. Loyalty

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6
 Good news? Nation’s unemployment rate fell to
9.7% in May from 9.9% in June.
 Underlying numbers show:
– Decrease reflected 322,000 people dropping
out of the labor force.
– Almost all new job growth was attributed to
411,000 temporary census workers hired by
the federal government.
– Long term unemployed (out of work for 27 or
more weeks) remains at its highest level
since the 1940s.
TIMES HAVE CHANGED
Current economic recession has resulted in high unemployment created by
both reductions in force and performance based terminations
Job market
U.S. Labor Department Monthly Report

7.
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TIMES HAVE CHANGED
Job market

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8
EMPLOYEE TERMINATIONS
 Why worry about ESI at termination:
1. Departing Employee Litigation
2. Employee Data Theft (Proprietary Information, Trade Secrets, Customer
Data, etc.)
3. ESI Subject to Litigation Hold (i.e., other than the employee case)
4. Employee Data Subject to Retention (Compliance / Regulatory)
What are the risks?

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EMPLOYEE TERMINATIONS
Termination increases risk of destruction
 Departing employees could mean departing data
 Reallocation of hardware
 Deletion of departing employee docs - email,
server & ESI storage accounts
 Consideration of data on home or personal storage devices
 One week – Three cases
– Goldman Sachs – data theft and client theft
– Sergey Aleynikov & Credit Suisse
– Morgan Stanley Smith Barney LLC v. Steven Ayer et al.

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 WHO - 59% of departing employees steal confidential data from their
employers; 79% of those employees understood their employer did not
permit them to leave with company data
 WHAT - 61% took information in the form of paper documents or hard
files; 53% downloaded information onto a CD or DVD; 42% downloaded
information to a USB drive; 38% sent attachments to a personal email
account
 HOW - 82% said their employers did not conduct a review of their paper
or ESI in connection with their departure
Why employers should be concerned
Ponemon Institute Survey “Data Loss Risks During Downsizing, As Employees Exit,
so does Corporate Data” (February 23, 2009)
Data loss is not uncommon:
EMPLOYEE TERMINATIONS

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11
Source: “Trends in Electronic Discovery”, Electronic Strategy
Group (B. Babineau), Nov. 2009
WHY EMPLOYERS SHOULD BE
CONCERNED: 2010 e-Discovery trends
78%
53%
46%
84%
87%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Lawsuits
Increased In
2009
Expecting
20%+
Increase in
2010
More
Regulatory
Inquiries
Active
e-Discovery
Project 2010
Tech
Budget for
e-Discovery

12.
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When do retention obligations arise: During Internal Investigation?
Prior to Litigation? At the Outset of Litigation?
Retention obligations
RISK OF DESTRUCTION
 Scope of a Party’s Preservation Obligation - Once a party reasonably
anticipates litigation, it must suspend its routine document retention /
destruction policy and put in place a litigation hold to ensure the preservation
of relevant documents
 Credible Threat - In general, the duty to preserve documents
arises when a party has reasonable notice of a potential or
actual litigation, examination, or investigation, also identified
as a “credible threat” of litigation

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Serious stuff
 In-house counsel personally
sanctioned and adverse inference
ordered for not doing enough
(Swofford v. Eslinger)
 Adverse inferences and “black letter”
requirements (Pension Committee)
 Slightly more lenient standard - but
result still adverse inference (Rimkus)
 Reversal of significant verdict for email
spoliation (Lockheed v. L-3
Communications)
 Requiring “violation” of Malaysian law
to comply with US Litigation (Gucci v.
Curveal; Cf. AccessData v. ALSTE)
 Dismissal for spoliation (Bray &
Gillespie v. Lexington)
 Having custodians “click through
emails” does not meet discovery
burden (Mirbeau v. City of Lake
Geneva)
10x
Costs
To Outsource
$1.5M
Avg Cost
Per Incident
$34M
Avg Annual
Legal Costs
89%
Companies
Face Litigation
$18M+
Review
1 TB of Info
RISK OF DESTRUCTION

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Internal Investigations: Advance warning
of potential risk
Internal Investigations Can be Tricky:
 Legal problems
 Morale Reputation
 Data loss
Consider Scope of Investigation:
 Need to know basis
 Key - to decide what to retain upon
the conclusion of the investigation
Are Ordinary Retention Policies Sufficient?
12
RISK OF DESTRUCTION

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RISK OF DESTRUCTION = RISK OF SANCTIONS
Judge Scheindlin’s concept framework:
1. The level of culpability
2. The interplay between the duty to preserve and the spoliation of evidence
3. Which party has the burden of proving that evidence was lost and the
resulting consequences of the loss, and
4. The appropriate remedy for the harm caused by the loss
The Pension Committee v. Banc of America
Securities (S.D.N.Y. Jan. 15, 2010)
Latest and greatest –

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Judge Rosenthal – Dueling Opinions?
1. Generally agreed with Pension Committee
2. Distinguished the level of culpability necessary to merit an adverse inference
instruction
3. Took a different approach on how to give such instructions
4. Cautions courts to avoid overuse of e-discovery sanctions, which can divert
focus from the more important facts and merits of the case
5. Addressed allegations of intentional spoliation, unlike the gross negligence at
issue in Pension Committee
Rimkus Consulting Group v. Cammarata, 2010
U.S. Dist. LEXIS 14573 (S.D. Tex. Feb. 19,
2010)
Latest and greatest –
RISK OF DESTRUCTION = RISK OF SANCTIONS

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e-Discovery best practices – minimal requirements?
Requirement
Written Litigation Hold Notification Notify formally in writing, document responses, etc.
Identify Key Custodians Determine appropriate scope – interview, review
documents, etc
Preserve Key Custodian ESI Know the repositories, have access for collection,
tools to do the work
Cease Deletion of Email Critical repository – don’t forget local caches
(PSTs/NSFs)
Preserving Former Employee ESI in “Care,
Custody, Control”
What do you do at exit? How do you find the data?
Preserve Backups when only source of key data Don’t get caught in the backup trap
Pension Committee v. Bank of America Securities, et. al.
aka “Zubulake Revisited”
RISK OF DESTRUCTION = RISK OF SANCTIONS

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PRACTICAL TIPS
GOALS
 Safeguard Data
 Don’t be Anti-Social
 Maintain Regulatory Compliance
 Obtain Strategic Litigation Advantage
 Control Costs
To evaluate and minimize risk

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 Critical Business Strategy and Preparation
for Litigation that Helps to Avoid
Sanctions/Disfavor by the court
 Have a defensible document
retention policy in place
 Ensure compliance
*An effective plan saves money
SAFEGUARD DATA
How a retention plan helps

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SAFEGUARD DATA
 NOTICE – Disclosure of monitoring and discipline to
help curtail rule-breaking. Inform that there may be
discipline (incl. firing) for personal use, such as visiting
pornographic sites).
 SIGNED CONSENT - Employees should sign
a form acknowledging an employer’s right to monitor as
required in several states.
 PROFESSIONALISM - Remind employees formally
about professionalism in email, etc.
 SOCIAL NETWORKING - Keep records of the
employees’ social media communications and have
employees sign computer use policies.
 Seek legal advice when preparing, developing and
initiating a records retention policy
Policy v. No Policy
 Companies without policies and content archiving
solutions
– experience a greater level of risk
– have a higher cost of litigation
 NOTICE - Where a company elects not to monitor
regularly, it should reserve the right to monitor
permitting the company to read messages when
necessary.
Data Retention Plans

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21
Web 2.0 soon? Too late, it’s here
IDC, Survey Shows Glimmers of Hope for Government Web 2.0, Adelaide O'Brien, 8/26/09
TIMES HAVE CHANGED
48%
33%
44%
38%
44%
28%
26%25%
13%
10%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Blogs Wikis Facebook YouTube Virtual
World
(Second
Life)
Industry
Government

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 What exactly is social media?
– Wiki says:
Social Media “supports the democratization of
knowledge and information, and transforms people from
content consumers to content producers.”
Wikipedia, Social Media, at http://en.wikipedia.org/wiki/Social_media
(last visited April 15, 2010).
DON’T BE ANTI-SOCIAL
The advent of social media

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 Social networking
– 11% of all time spent online in the U.S.
– 234 million people age 13 and older in the US used mobile devices in
December 2009
– 1 billion tweets in December 2009, 40 million tweets per day, on
Twitter
– More than 25% of U.S. internet page views occurred at top social
networking sites in December 2009 – increase of 13.8% from
previous year
INCREASING USE OF SOCIAL MEDIA
The “Attention Age”

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 Communication – blogs, micro blogging, social networking
 Collaboration – wikis, social bookmarking
 Multimedia – photo, art, video sharing, live calling
 Reviews – opinion
 Community – Q&A
SOCIAL MEDIA IN ACTION
Examples of social media
Twitter FaceBook
LinkedIn
Wikipedia
Flckr, YouTube
Skype
Answers
Yahoo

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USE OF SOCIAL MEDIA IN BUSINESS
 Consider policies where social networking is used in business context to:
– Connect with customers
– Connect with clients
– Connect with employees
– Prohibit/limit employee use
 RISKS
– leaking of proprietary information
– potential liability exposure
– potential damage from viruses or spyware
– potential drain on employee productivity
– bandwidth issues
 TIPS
– Have employees sign computer use policies
– Keep records of the employees’ social media communications
– Storage issues/preservation issues
25

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PRIVACY ISSUES IMPLICATED BY
SOCIAL MEDIA: Privacy / Personnel
 Policy-Driven Outcomes:
– Stengart v. Loving Care, No. A-16-09, 2010 WL 1189458 (Mar. 30,
2010)
– Quon v. Arch Wireless Operating Co., 529 F.3d 892 (9th Cir. June 18,
2008)
– Lake v. City of Phoenix, 218 P.3d 1004 (Ariz. 2009)
– Hays Specialist Recruitment (Holdings) Ltd. v. Ions, [2008] EWHC
745 (Ch.) Apr. 16, 2008
26

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e-DISCOVERY AND SOCIAL MEDIA
 Dynamic nature of ESI discovery issues:
– Scope of discovery as it relates to Social Media
– Preservation of Social Media content
– Collection of Social Media
27

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MAINTAIN REGULATORY COMPLIANCE
 Personnel or employment records (the Americans with Disabilities Act)
 Records containing specific employee information (the Age Discrimination in
Employment Act)
 Records of insurance premium payments of employee benefits; payroll slips;
timesheets; records relating to leave time; and employee benefits (the Fair
Labor Standards Act and the Family and Medical Leave Act, or FMLA)
 Records of exposure to hazardous materials monitoring (the Occupational
Safety and Health Act)
 Test papers completed by applicants for any position that discloses the
results of an employer-administered aptitude test (the Age Discrimination in
Employment Act).
 Pay discrimination papers (the Lilly Ledbetter Fair Pay Act)
 Also review federal employment laws for keeping documents (e.g. HIPPA,
COBRA, USERRA, OSHA, NLRA, ERISA, IRCA, EPA, FCRA)
Know what records to retain and for how long

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OBTAIN LITIGATION ADVANTAGE
By cooperating?
 The Sedona Conference Cooperation Proclamation:
– [A] coordinated effort to promote cooperation by all parties to
the discovery process to achieve the goal of a “just, speedy,
and inexpensive determination of every action.”

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OBTAIN LITIGATION ADVANTAGE
Using cooperation to your client’s
advantage
 Avoid waiver and undue delay
 Seek and provide discovery from the most relevant, convenient, least
expensive sources available
 Discuss scope of preservation
 Proportionality Doctrine
– Use analysis to limit or expand the scope and extent of
discovery; Rule 26(b)(2)
 Is the burden of the requested discovery greater than its potential
benefit to the case?
– Cost analysis
– Societal interests

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COST SAVING STRATEGIES
Negotiate scope
 Get an early handle on the key case issues – saves
money, time, sanctions, and acid reflux
– Understand your case – who is
involved, what are the issues,
what exists, where is it located
– Control the type, timing amount,
and method of electronic discovery
that will be conducted
– Determine who should be bearing
the costs of production
– Staging Discovery

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Reduce the volume of material to review
 Early case assessment
 Data sampling
 Clustering tools
 Use in privilege review
 Bringing e-discovery and electronic records management in-
house
COST SAVING STRATEGIES
New and emerging technology

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CONCLUSION
“We are drowning in nformation
and starved for knowledge.”

34.
Question and Answers
© Copyright 2010 EMC Corporation. All rights reserved.
McCarter & English www.mccarter.com
Alitia Faccone, Esq. Partner afaccone@mccarter.com
Gina Trimarco, Esq. Associate gtrimarco@mccarter.com
EMC www.emc.com - www.kazeon.com
James D. Shook, Esq. Director, E-Discovery and shook_jim@emc.corp
Compliance Legal Group