By its nature, Electronically stored information ("ESI") has a tendency to become voluminous and can had a profound impact on the cost of litigation and the issues and obligations faced by litigants. Federal Rule of Civil Procedure 37(e) is intended to provide a safe harbor from sanctions for the loss of ESI resulting from "the routine, good-faith operation of an electronic information system." Since the rule was put in place in 2006, courts have applied very different analytical frameworks and standards when considering requests for sanctions for lost ESI. Because of the problems created by the inconsistency and uncertainty of the rule's application, including concerns that parties would be held to a standard that required the over-preservation of ESI, the old rule has been scrapped and a revised version of Rule 37(e) goes into effect on December 1, 2015.
A recent Appeals Court decision should serve as a warning to employers about the importance of clarity in communications with employees concerning policies on overtime pay and timekeeping.