Document Retention and Destruction

Patrick Kelly
Patrick Kelly

A businesses’ ability to manage its operations and liability exposure often relies upon effective record keeping and document destruction procedures. Effective record keeping helps a business provide good service. However, effective record keeping may also help protect the business from potential liability.

The first step in implementing and auditing business retention records involves identifying both the type of documentation required for businesses operations and the type of documentation actually created. These two types of information are often very different. For example, electronic correspondences commenting upon clients, co-workers or business opportunities are commonly created by employees; however, these documents are not necessary for business operations. This does not mean that such informal communication should be prohibited; however, an awareness of these types of interactions and the existence of protocols for the preservation of these records in separate files may help streamline operations and minimize liability exposure.

It is also important for a businesses to know the types and kinds of documents that they are required to retain. For example, personnel records typically should include proof of work authorization, work schedule, wage rate, benefits, leave documentation and pension records. How long these records must be kept varies. Detailing the retention period for all personnel records is beyond the scope of this article; however, both the Virginia and the United States Departments of Labor maintain websites which provide helpful guidance to employers.

It is also important for employers to retain personnel records in separate, safe and secure locations. Special care should be taken with the retention of confidential information including social security numbers and medical records.

Business records typically should be retained throughout the life of the relevant business relationship. However, client records should also be saved for several years after the end of the client relationship. While the length of time that records should be kept varies; typically, records should be maintained for at least three to five years after the end of a client relationship. Like certain personnel records, client records containing confidential information should be maintained in a secure manner.

Document destruction is as important as document retention. Every business should have a destruction protocol and schedule. It is therefore important to retain all records in a manner that will allow for their easy identification and designation for destruction. Every business should also have a protocol for segregating and preserving records that relate to matters likely to result in litigation. This obligation becomes heightened when notice of litigation or a threat of litigation is received.

Notwithstanding a businesses’ obligation to preserve records when litigation is either ongoing or eminent it is important for employers to regularly comply with prepared document destruction protocols. Put another way, businesses should timely and routinely destroy all records which they no longer need. Businesses should ensure that destruction policies are comprehensive including protocols for the destruction of paper documents, electronic records, records retained on portable devices, as well as electronic records retained on employee computers and electronic accounts.

Businesses should also ensure that destroyed documents are disposed of in a manner that will protect against the release of confidential or private information. For example, documents should be shredded and electronic records should be destroyed using software which thoroughly and completely destroys all versions of the targeted files. Additionally, when disposing of hardware (including copiers) businesses should make sure that all data drives and recording devices have been completely erased.

By gaining knowledge of the types of records maintained, the types of records that should be retained and the manner in which relevant records will be retained and or destroyed, a business owner is able to ensure both the satisfaction of client needs and the reduction of potential liability.

Patrick Kelly is an attorney with Glenn Feldmann Darby & Goodlatte – visit www.gfdg.com to learn more.

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