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THE POWER OF DOCUMENTS - If You Can't Prove It, It Doesn't Exist
Here is another example of what we try to preach to the businesses we train (see the August 1, 2001 issue of Avoiding Lawsuits): it is not enough to do the right thing; rather, you have to institute procedures that ensure your ability to prove you did the right thing. In the law, if you can't prove it, it didn't happen. And there is nothing more frustrating than knowing you are right, and not being able to prove it.
The most frequent context in which this simple truth manifests itself is the "my word against your word" battle that forms the core of so many lawsuits. In that battle, documents are the ultimate weapon. If you have documents on your side, you usually win.
It would seem to logically follow, however, that if neither side has documents, the result would be, at worst, a toss up. Unfortunately, that is not so. Repeatedly, judges and juries take the position that if you are a company that (unlike most employees) has the systems and staff to create and retain documents, and if you don't have the documents to prove you did the right thing, it will be presumed that you did the wrong thing.
Harry Dunn, an African-American, was hired by Nordstrom as a loss prevention agent. He claimed that he received a promotion to "internal loss prevention lead" but he was paid less than two white individuals who previously occupied the same position. Consequently, Dunn filed a racial discrimination charge against Nordstrom with the EEOC. Thereafter, Dunn claimed that he was demoted from internal loss prevention lead to an "internal investigator." He then filed a second complaint with the EEOC, alleging unlawful retaliation.
One of Nordstrom's prime defenses was that Dunn was not demoted but, rather, all internal loss prevention leads became "internal investigators" - essentially, Nordstrom contended that it changed the title and duties of the job throughout the company. However, Nordstrom could produce no documents to substantiate this, most likely because management undertook the action without creating the appropriate document trail along the way. Therefore, the case boiled down to a "my word against your word" battle - Dunn alleged that he was singled out for adverse treatment, and Nordstrom said that he was treated like everyone else.
Nordstrom lost that "my word against your battle." Here is the court's reasoning:
Indeed, Nordstrom's apparent inability to produce any documentary - rather than testimonial - evidence relating to the alleged across-the-board demotion of Midwest Region internal loss prevention leads is troubling because one would expect a large corporation to document the decision to demote so many employees.
Judges and juries expect a company to have documents. If the company does not have them, judges and juries question whether the company is telling the truth.
Companies frequently hire us to teach them how to create and keep the right kind of documents. We find that there is substantial resistance to the concept among the ranks of management - no one likes to go through another bureaucratic step that interferes with "doing my job." That resistance fades, however, when managers begin to understand how bad (and, even, how dishonest) they can be made to look in a litigation if they do not have the documents to back up their version of the truth, and that provides a powerful incentive to stick with a reasonable program. Examples like the Nordstrom case will help. The truth is that document creation and retention policies can be a pain, but not an inordinate pain. Modest use of entrenched technologies can help - portable dictating machines, PDA's, e-mail and so on. It takes some adjustments and some training, but the payoff is more than worth it.
Counsel Consulting Group LLC helps companies throughout the United States avoid employment and HR-related claims and liabilities. CCG assesses existing policies, procedures and problem areas; it provides customized liability-avoidance training to managers and executives; and it designs and implements business techniques that reduce employment liability risks on a long term basis. CCG also offers specialized workshops for managers and HR executives, customized consulting in focused employment-related areas, and CD-ROM and web-based training alternatives. For more information, contact us at info@powelltrachtman.com and visit our website at www.counselconsulting.com.
Powell, Trachtman, Logan, Carrle & Lombardo, P.C. is a full service law firm with offices in suburban Philadelphia, PA, Harrisburg, PA and Cherry Hill, NJ. Powell Trachtman represents a variety of commercial enterprises, entrepreneurs and business executives in respect to their litigation, litigation avoidance planning, business formation, business transactions, estate and tax planning, and other needs. We are also approved defense counsel for numerous insurance carriers in matters pertaining to professional malpractice, products liability, employment practices, directors and officers liability, and many other fields. For more information, contact us at info@powelltrachtman.com and visit our website at www.powelltrachtman.com.
