A recent federal ruling in Equal Employment Opportunity Commission v. JBS USA, LLC illustrates the importance of preserving records upon notice. In JBS, the Equal Employment Opportunity Commission (EEOC) sought sanctions against the employer for failing to preserve certain records pertinent to the asserted discrimination claim. In holding that the employer had a duty to preserve those records upon notice that such records would be relevant to the claim but failed to show that the employer did so and to the EEOC’s prejudice in proving its claim, the judge imposed evidentiary sanctions against the employer.
Such evidentiary sanctions may come into play with an employer’s obligation to maintain its records pertinent to the EEO-1 reporting under 26 C.F.R. Section 1602.14. Such records broadly include all personnel and employment records for one year from the date of the record or termination for private employers and for two years for educational and state and local governments. The filing of a charge of discrimination has been filed with the EEOC and/or a civil action will extend such period until the final disposition of the charge or action, including any statutory of limitations. For example, if a charge or action is filed, an employer who fails to maintain its records for the appropriate time frame under Section 1602.13 may be limited from defending against the claim underlying the charge or action. That said, if an EEO-1 report would have supported a defense against the claim, the failure to maintain the documents supporting the EEO-1 report may prevent the employer from using the EEO-1 report as shield and/or undermine its reliability regardless of any timeframe.