Former Employee’s Attempt to Hide Confidential Documents Thwarted by E-Discovery

By Vance Knapp

In the case of Hallmark Cards, Inc. v. Janet Murley, Case No. 11-2855 (8th Cir. Filed Jan. 15, 2013), the Eighth Circuit Court of Appeals affirmed a $735,000 jury verdict against a former executive who breached the confidentiality provisions contained in her separation agreement. Discovery included review of a computer hard drive that the executive had used. At trial, the employer’s computer expert testified that sixty-seven documents had been deleted from the hard drive, eight of them, plus an entire folder, related to the former employer. The trial court judge, over several objections from the opposing counsel, gave the jury an adverse inference (spoliation) instruction. Essentially, because the files were deleted, the jury could infer that the former executive had used the documents. The issue in the Court of Appeals concerned whether the trial court was explicit in its findings of bad faith and prejudice before issuing the adverse inference instruction, but the Court of Appeals called the failure to make explicit findings harmless error. The record still had ample evidence of the former executive’s bad faith and the prejudice that the employer would have suffered as a result of not having the destroyed documents to use as evidence.

Modern litigation involves discovery of electronic data (“e-discovery”). Everyone should expect it.

Leave a Reply

Your email address will not be published. Required fields are marked *