Human Resources and E-Discovery Law: New Challenges in Museum Administration
Prepared for the Association of Midwest Museums Journal
November 30, 2009
Timothy Chester, Daniel Estrada, and Star Swift
In the not-so-distant past, handling employment disputes was simple: museums could hire a
third-party arbitrator to handle disputes. The arbitrator would collect some paper records,
interview the people involved, and make a decision, and the total cost may have been $7,000 to
$10,000. But changes in technology and the law have turned that paradigm upside down.
In December 2006, changes to federal law1 created new litigation requirements: any organization
involved in a federal lawsuit is now required to consider electronic evidence. Museums must
now turn over e-mail, voicemail, text messages, electronic documents, databases, and any other
“electronically stored information” (ESI) that may be relevant to the dispute. This process is
called electronic discovery.
Most state courts have also updated their rules to include e-discovery. All of these changes
affect the way organizations handle internal investigations and dispute resolution (such as
arbitration and mediation).2, 3
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The problem with e-discovery is that it’s very expensive, especially when you’re not prepared.
Organizations now generate an immense amount of ESI, and a lot of it is relevant to employment
matters. Even as early as 2002, only 0.01% of new information originated on paper. Today, the
vast majority of information about any dispute is stored electronically and never printed.
E-discovery creates several requirements:

Preservation. Museums are required to stop modifying and deleting any potentially
relevant records as soon as they should have known (as determined by a court) that they
were going to be involved in a law suit. The challenge here is that IT systems delete,
modify, and overwrite data automatically. Even when they know about this destruction
of evidence, many museums don’t have a process in place to stop it. If you fail to meet
1
Called the Federal Rules of Civil Procedure (http://www.dcestrada.com/downloads/FRCP-2006-e-discoveryamendments.pdf)
2
As a general rule, courts have held that discovery must be reasonable. Therefore, organizations are wise to
include e-discovery provisions in their current and future contracts with employees and vendors. These provisions
can address the scope of discovery (what is reasonable or necessary), who pays, and whether the prevailing
party’s costs will be reimbursed. If these e-discovery issues are adequately addressed in written arbitration or
mediation procedures that are included either in the contract or incorporated by reference, the parties should be
able to avoid expensive and time-consuming litigation.
3
In disputes with union employees, the Collective Bargaining Agreement (CBA) will determine the limits of
discovery, not federal or state court rules. Most CBAs are governed by the laws of the National Labor Relations
Board (NLRA), the Railway Labor Act (RLA), or various state and federal acts that affect public-sector
employees.
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your preservation obligations, a court may issue sanctions, including fines and other
judgments against the museum. These sanctions are often a death sentence for the case.

Collection. Once e-discovery (or an investigation) has started, museums must identify
and collect all potentially relevant records. This sounds easy, but it may involve
expensive data forensics. At best, it will take an IT person or team many hours to
manually search and copy data. Because information is stored in many different places
and in many different formats, you can’t just “drag and drop” files onto a disc. More
expensive forensic collection of data may also be necessary.

Processing. After data has been collected, it must be culled and searched to separate
relevant records. This process may be partially automated with software tools, but it
often involves expensive and painfully manual processes.

Review. Once relevant records have been identified, they are provided to an outside
attorney or legal team for review. In this step, an attorney reads through all of the records
to make a final decision about their relevance. Privileged attorney-client communication
is also separated out. Review is typically the most expensive phase of discovery, because
you have to pay an outside attorney hundreds of dollars per hour to read through all your
documents.
Because of the high cost of e-discovery, many organizations (including museums) have been
settling lawsuits because they’re too expensive to litigate. This creates a hefty and unnecessary
risk, because employees can bully a museum into paying out settlements, regardless of whether
you did anything wrong.
***
So how do you manage these new requirements? Many museums are part of a larger
organization, such as a government body or university. As a consequence, many of them don’t
get good advice from their appointed legal counsel about preparing for e-discovery. But being
prepared is the best way to control costs and preserve your precious funding. Here are some
recommendations:
Prepare an adequate legal hold process. A well-planned and executed legal hold ensures that
relevant material is not being modified or destroyed when your obligation to preserve ESI is
triggered.
Know where and how data is stored. Work with IT folks to generate a “data map” or similar
documentation that shows how data is organized on your systems. Quickly identifying sources
of potentially-relevant ESI will put you one step ahead during discovery.
Plan for collection and analysis. Make sure your museum has an e-discovery plan that covers
the collection, processing, and review of ESI. There are several elements to this:
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
Address the storage and retrieval of e-mail, file shares (“network drives”), databases, and
any other electronic information (i.e. voicemail, text messages, etc.).

Evaluate technical systems such as e-mail archiving appliances and document
management systems. Ideally, these systems will be equipped to handle automated legal
holds.

Select software tools and vendors to collect and process your electronic evidence.
Depending on the size and complexity of the museum (or its parent organization), it may
be more cost-effective to purchase in-house tools than to contract a vendor.

Develop a comprehensive review strategy. This may include hiring contract attorneys or
other legal support staff to keep costs down.
Build a good-faith showing. Courts require that organizations demonstrate “good faith” in their
management of electronic records. If you can show that reasonable steps were taken to preserve
and collect evidence, a judge will be much more lenient if your process wasn’t perfect.
Therefore, it’s critical to demonstrate that the company has control over its data. The only way
to establish good faith is to craft excellent policies that are well-implemented, properly enforced,
and consistently followed.
Effective policies are clear and concise, and they avoid legalese as much as possible. But every
organization is different: IT policies should be tailored to fit your museum’s culture and business
practices. Policies may address acceptable use, employee privacy, internal and external
communication, and security practices.
Keep only what you need. Retaining unnecessary records significantly increases the cost of
litigation, because there’s more data you have to search, collect, and process. Retaining less data
also decreases your museum’s storage costs and increases efficiency.
TIP: There are only 3 reasons to retain an electronic record:
1. there is an ongoing business need to use it;
2. a regulatory compliance obligation exists (like HIPAA4); or
3. there is (or should be) a legal hold on the record.
Corporate policies should also be reviewed annually or semi-annually to ensure that they
adequately address your museum’s current risks. Effective policies are communicated to
employees, reviewed and discussed regularly, and updated as a matter of habit. New employee
orientation should always include a discussion about organization’s IT and legal policies.
Litigation preparedness is not easy. Unless you have an e-discovery expert on staff who has
gone through this process with other organizations, relying on your internal team to address these
risks is bad idea. Find an e-discovery expert who can help you plan and implement good
processes, policies, and technical mechanisms to comply with your e-discovery obligations.
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Health Insurance Portability and Accountability Act, a federal law that regulates the use of “protected health
information” that organizations store
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***
In this electronic age, museum administrators cannot ignore the risks and challenges introduced
by new technology. This is especially important as more museums embrace everything from
sophisticated security systems to portable devices. The right e-discovery strategy will make
investigations and legal disputes cheaper, easier, and less painful for everyone involved. But it’s
vital that you work with skilled technologists who have experience addressing e-discovery
proactively. With the right team, taking a proactive approach ensures the best possible outcome.
***
Timothy Chester is the former Director of the Grand Rapids Public Museum and is now a global
consultant in various aspects of museum administration and exhibition.
Daniel Estrada is a legal technology expert and President of D.C. Estrada, an e-discovery
consulting firm that helps successful litigators and corporate clients implement smart, defensible
e-discovery strategies.
Star Swift is a professor who teaches labor and employment law at Grand Valley State
University in Grand Rapids, Michigan. Prior to teaching Ms. Swift was the chair of the Michigan
Employment Relations Commission (MERC) which is the state’s version of the National Labor
Relations Board. Her area of research is primarily arbitration and collective bargaining.
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