I've written before about the high risks companies face
from wage and hour class/collective lawsuits (here's one example). Here's another factor to consider: the
exorbitant costs imposed by e-discovery and employers' obligations to preserve
Workplace Prof Blog brings us the story of Pippins v.
KPMG, a wage and hour collective action alleging that the accounting firm
deprived its Audit Associates of overtime wages. Before the class was even
certified, the court imposed upon KPGM the obligation to preserve the potential
class members' more-than 2,500 laptop hard drives. Following certification,
KPMG argued that instead of preserving all of the hard drives-at an astounding
cost of more than $1.5 million-it should only be required to keep a representative
sample comprised of the named plaintiffs.
The court disagreed:
Based on Plaintiff's recollections regarding their former
hard drives, I agree with [Magistrate] Judge Cott that the hard drives are
likely to contain relevant information. The information on the hard drives will
likely demonstrate when the Audit Associates were working (hours) and what they
did while at work (duties). This information is obviously relevant in a case
asserting violations of the FLSA ... since Plaintiffs need to establish what type
of work they performed in order to prevail on the merits, and how many hours a
week they worked in order to collect damages....
I gather that KPMG takes the position that the only Audit
Associates who are presently "parties" are the named plaintiffs, and so only
the named plaintiffs' hard drives really need to be preserved. But that is
nonsense.... [T]he duty to preserve all relevant information for "key players" is
triggered when a party "reasonably anticipates litigation." At the present
moment, KPMG should "reasonably anticipate" that every Audit Associate who will
be receiving opt-in notice is a potential plaintiff in this action.
What are the lessons for employers?
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