By Gerald L. Maatman Jr., Howard M. Wexler, and Nadia Bandukda

In a case we previously blogged about (here and here), EEOC v. Womble Carlyle Sandridge & Rice, LLP, 13-CV-46 (E.D.N.C. Mar. 24, 2014), Magistrate Judge L. Patrick Auld held the EEOC liable for spoliation sanctions based on the “negligence, if not gross negligence” exhibited by the charging party it brought suit on behalf of – one Ms. Charlesetta Jennings (“Ms. Jennings”). On March 24, 2014 Magistrate Judge Auld ordered the EEOC responsible for $22,900 as the reasonable costs incurred by Womble Carlyle that the EEOC must pay. On April 29, 2014, Judge Eagles of the U.S. District Court for the Middle District of North Carolina issued an order affirming Judge Auld’s sanction award and rejecting the EEOC’s contention that the amount was too high.

Background

The EEOC filed suit on behalf of Ms. Jennings in 2013 alleging that Womble Carlyle failed to accommodate her disability and subsequently terminated her employment because of the disability in violation of the Americans With Disabilities Act (“ADA”). As the EEOC sought back pay on behalf of Ms. Jennings, Womble Carlyle served document demands and interrogatories designed to determine whether she properly mitigated her damages by seeking alternative employment. While being deposed in September 2013, Ms. Jennings testified that she had previously maintained a detailed log chronicling her efforts to obtain alternative employment while she was receiving unemployment insurance benefits; however, once these benefits ended in February 2013, she shredded the log. Further, she testified that she discarded additional material regarding her efforts to obtain employment in June of 2013 – which was after the EEOC had already filed its lawsuit on behalf of Ms. Jennings in January 2013.

Based on Ms. Jennings’ destruction of these documents, Womble Carlyle sought sanctions for spoliation of evidence, which the Magistrate Judge granted and ordered the EEOC to reimburse Womble Carlyle its costs and fees associated with having to bring the spoliation motion.  As a result, Womble Carlyle submitted a Statement of Expenses totaling $29,651.00. On March 24, 2014, Magistrate Judge Auld ordered the EEOC to pay Womble Carlyle $22,900 in sanctions. The EEOC timely filed Rule 72 objections to Judge Auld’s Report and Recommendation as to the money awarded to Womble Carlyle.

The Court’s Decision

In her two page Order, Judge Eagles noted that she reviewed Magistrate Judge Auld’s Report and Recommendation de novo and determined that “the amount awarded by the Magistrate Judge is appropriate.” Id. at 1. As such, Judge Eagles affirmed and adopted the sanction award and ordered the EEOC to pay Womble Carlyle the full $22,900 amount within 120 days “to reimburse the defendant for its reasonable expenses incurred in attempting to conduct additional discovery regarding mitigation of damages and in bringing its motion for sanctions.” Id. at 2.

Implications For Employers

As this case demonstrates, decisions made regarding the preservation of evidence issues at the beginning of, and even leading up to, litigation can have very serious implications, whether in the form of sanctions, an adverse inference at trial or even outright dismissal. This decision (and Magistrate Judge Auld’s prior Report and Recommendation) should be added to employers’ defense toolkits, as the preservation of documents and information is a two-way street that employees (and the EEOC) must also follow once litigation is reasonably foreseeable – or proceed at their own peril.

Readers can also find this post on our Workplace Class Action blog here.