Business Law Update: Keep All E-mail Communications
Businesses routinely maintain copies of correspondence and memos. Far too often, however, they do not extend this practice to e-mail correspondence. Email correspondence is no different than your normal paperwork. You should keep copies of all of it to protect your business against any claim made or lawsuit brought by a former employee, customer, client or business partner.
Currently, only certain institutions like publicly traded companies, banks and broker-dealers are obliged to retain e-mail and instant messaging documents for proscribed periods of time.
Notwithstanding these laws, your custom and practice should be to maintain copies of all e-mail correspondence. E-mail is considered evidence and courts are hammering businesses that do not maintain email records. Judges are often ruling that the failure to maintain and produce email records means the business in question is hiding key evidence.
There are scores of cases where judges have ruled that the failure of a company to produce e-mail corroborating certain facts was a key factor in the issuance of an adverse ruling. If you are a smaller business it’s even more important for you to maintain your e-mail records. Larger companies may be able to absorb the financial loss from an adverse ruling, but smaller companies can be put out of business by a claim brought to a governmental agency by a former employee, breach of contract by a customer or a dispute with a business partner. Complete records of e-mail correspondence could be the difference between winning and losing.
To protect your business, you must have a procedure in place to maintain e-mail communications generated through the business. Failure to keep these records can lead to rulings in litigation that you have no proof of your argument or worse that your business willfully destroyed evidence. If this occurs, the judge may issue significant monetary sanctions, automatically find you liable or take other harsh steps that assure a victory for the other side. As if such developments are not bad enough, there exists a second risk associated with e-mail communications.
Maintaining e-mail communications can also have a downside. The problem arises, of course, when a communication contains statements that are damaging to your business. Yes, it’s the proverbial “damned if you do, damned if you don’t” situation.
To avoid such disasters, your business must develop a clear policy on e-mail communications and train all employees to comply with that policy. Employees must understand the business environment is not one in which jokes, flippant remarks or careless statements should be made in email communications. The wrong e-mail policy can have devastating effects. If you don’t have a good e-mail policy, or want to make sure the procedures you have in place will protect your business, consult a business attorney who can properly advise you. Being prepared now can save you and your company much bigger headaches later.