Quirky Question # 29, Maintaining Electronic Records
Quirky Question # 29:
Our company has offices in California. This year we want to improve our document retention practices. We’ve decided to maintain electronic records of personnel files. Can we do this in California? We were told that California law requires the records to be available at the job site. If this is true, can we switch to an electronic database in California?
[Readers: Today we post another one of our California-specific analyses. The analysis below was prepared by Mandana Massoumi and Gabrielle Wirth of our firm's Irvine, California office. Gabrielle is a 1982 graduate of the University of California, Davis, School of Law, and Mandana is a 1987 graduate of the University of San Francisco School of Law. Their resumes are available on our firm's website at www.dorsey.com.]
Mandana’s and Gabrielle’s Analysis:
The California Labor Code, § 1198.5, specifically addresses the subject of your question. Under the Labor Code, a California employer is permitted to retain personnel files electronically. That right, however, is circumscribed somewhat, to ensure that employees are permitted access to their personnel files.
In short, you can switch to an electronic database. But, you have to make sure the records can be downloaded, stored on a disk, and maintained at your California location. California Labor Code Section § 1198.5 requires employers to permit an employee to inspect his or her personnel records. Inspection pursuant to this section must be allowed at “reasonable intervals and reasonable times.” (L.C. § 1198.5(b).)
Section 1198.5( c) requires the employer do one of the following:
(1) Keep a copy of each employee’s personnel records at the place where the employee reports to work.
(2) Make the employee’s personnel records, available at the place where the employee reports to work within a reasonable period of time following an employee’s request.
(3) Permit the employee to inspect the personnel records at the location where the employer stores the personnel records, with no loss of compensation to the employee.
L.C. § 1198.5(c) (emphasis added). Therefore, § 1198.5 permits the employer to keep the original personnel records at a location other than that were the employee reports to work, so long as a copy is available at the location where the employee works and can be made available for inspection upon request.
Subject to the provision in section (2) above, the employer is not required to make personnel records available immediately upon request. The California Department of Labor Relations, Division of Labor Standards Enforcement (“DLSE”) offered some guidance in its August 27, 1998 opinion letter on how soon such personnel records should be provided to an employee for inspection. (See Wage-Hour Opinion Letter No. 1998.08.27 (1998).)That letter reiterated the employers’ obligation to make records available to an employee within a “reasonable” time. The August 27, 1998 opinion explained that while reasonable attempts at a timely response must be made, there was no per se rule and would be subject to a “case by case” evaluation. The DLSE stated as follows:
“The Division has historically taken the position that the flexibility demanded by the clear language of this statute means that reasonableness can only be determined on a case by case basis. …
Other difficulties in setting any hard and fast rule on access to an employee’s personnel file would allow, for example, an out of state employee who maintains their personnel files in an out of state location, or one who has statewide operation and employee, but maintain their personnel files at a central location, to provide access to these files within a “reasonable period of time” after a request is made to inspect them by the employee. On the other hand, it would not be unreasonable to expect fairly immediate access to an employee’s personnel file maintained at the place where the employee works as required by statute, absent compelling reasons or unusual circumstances that the employer would have the burden of establishing.
In the event your constituent is denied access to their personnel files outside of these time parameters, or altogether, he or she may file a complaint with the nearest office of the Division of Labor Standards Enforcement.” (Emphasis added.)
In sum, the regulations permit employers to keep electronic copies of the personnel files. However, employers must ensure a copy (electronic or hard copy) is maintained and retrievable (to be printed in hard copy format upon request), at the location where the employee works in California.
A separate issue is what materials you wish to include in the electronic personnel records. When maintaining electronic copies of personnel files, we recommend that you consider segregating certain types of materials to ensure that they are not inadvertently produced when the personnel file materials are made available to the employee. For example, business records, confidential data, and privileged communications should be scrutinized carefully to assess whether any of this data belongs in the personnel file. Consideration also should be given to the retention periods that govern different types of documents. While certain types of documents have mandated retention periods, other materials (e.g., emails and other routine communications) do not and may be destroyed after a reasonable period of time. One potential problem with maintaining materials electronically is that you may find yourself retaining documents that could be (and should be) disposed of. Therefore, if you elect to maintain electronic personnel files, you may want to conduct periodic file reviews to cull information that no longer needs to be retained.
Performance Evaluation, Quirky Question # 6
Quirky Question # 6:
Our company operates a call center. One of our supervisors (Employee X) demonstrated two significant performance problems. First, he was verbally abusive to the employees he supervised. Second, he appeared to have a disproportionate number of “dropped” calls. Our suspicion is that he put the callers on “hold,” and left them on “hold” until they hung up and called back, at which point the calls would roll over to someone else. Since he was a long-term employee, we did not fire him. Instead, we provided him a probationary letter, demoted him, and increased our supervision of his performance. In the two months since we made these changes, he has performed quite well. Coincidentally, at the end of the two-month period, X’s annual performance evaluation occurred.
The person responsible for X’s review is one of his close friends, both at work and outside the workplace . He based his review of X’s performance on the last 60 days, which he justified to us as designed to “encourage” rather than “discourage” X. The review was very positive and ignored the problems that were exhibited through the vast majority of the review period (10 months of the year). The manager provided the review to X and had him sign it. When the manager who conducted the review asked his own supervisor to sign off on the review document, the crap hit the fan.
The senior manager insisted that we re-write the review, which we have done. The review now reflects the full year’s performance, including the serious problems that were identified before X was placed on probation and demoted. We provided the new review to X, informing him that the earlier document was not reflective of his entire year and would not be placed in his personnel file. I have the original review (there are no copies). Now, X is telling me he wants a copy of this review as it is his “legal right” since he signed it. Do I have to give him a copy of the first review?
Roy’s Analysis:
Your inquiry raises several issues in addition to the specific question you posed about whether your company is obligated to provide the employee the original performance review document.
First, as your question reflects, performance evaluations are difficult. While most would agree that the purpose of a performance evaluation is to provide candid, objective feedback regarding the employee’s performance in the time period encompassed by the review, this goal is more easily stated than achieved. Managers preparing performance evaluations struggle to find the appropriate balance between candor and criticism. Performance reviews often are either overwhelmingly enthusiastic or harshly condemnatory. Neither approach helps the employee being reviewed.
Second, a problem implicit in your question is the close personal relationship between the manager and the employee. Given this close friendship, I wonder whether the goal of an objective evaluation is realistic. Both as a general proposition and in this specific situation, your company may want to consider disqualifying an evaluator with a close personal relationship with the employee being evaluated. These types of relationships have the potential for distorting the evaluation, as appears to have happened here.
Third, situations where a close friend is evaluating a subordinate employee create an appearance (legitimate or not) of favoritism to other employees. If your firm does not have the flexibility to substitute another evaluator (I don’t have any sense of the size of your business), you might at least consider having a second person participate in the evaluation when close personal relationships are involved.
Fourth, as you noted, the review does not cover the entire performance period. Typically, I see the opposite problem. Individuals include in their assessments criticisms from a period long preceding the “review period.” Thus, an employee who believes that he or she has adequately addressed and resolved a prior performance problem continues to see criticisms based on that problem, perhaps from years earlier. Here, of course, you have a review based on just one-sixth of the year. This abbreviated period did not accurately reflect the employee’s year-long performance, which clearly was deficient for most of the year. An objective and fair review could have pointed out that the employee had exhibited serious problems throughout the year, but that since the demotion and with the additional supervision, his performance had improved significantly.
Fifth, the specific question you pose is preceded by your observation: “there are no copies.” Although I recognize that there may not be any identical, signed copies of the review, I am skeptical that there truly are no copies. The document probably was created on a computer and likely has been saved on a hard drive or network server. Drafts may have been retained. Photocopies may have been made. In our world of electronic data, it is hard to have confidence that all other copies have been destroyed.
Even if you had the only copy, however, my advice to you would not change. Give the employee a copy of the earlier review. I make that recommendation not because you necessarily have a legal obligation to do so, but because withholding the document is more problematic than producing it. Your company has a very straightforward and legitimate explanation for why the review was revised: it was prepared by a biased reviewer, who admitted that he based the assessment on just two months out of twelve, and who acknowledged that he ignored the other prior serious problems that had been identified (all of which had been documented and which led to the employee’s prior demotion).
Don’t run from these facts; they are helpful. If the employee in question later initiated litigation against the company, you will be able to explain easily why the evaluation was modified. It would be much harder for the company to explain why it refused to provide the employee a copy of the original review, or even worse, why the document had been destroyed. (Don’t destroy it!) In my opinion, refusing to provide the ill-conceived review elevates its significance. You might want to write “Withdrawn” or “Void” on the document before providing a copy to the employee, but even this step may be unnecessary.
Finally, like so much of employment law, there are two statutory schemes that affect the rights and responsibilities of employers and employees alike — federal and state. While I am not familiar with any federal requirement that you produce the document to the employee, you need to evaluate whether there are any statutes or regulations in your jurisdiction that require you to produce the signed document to the employee. As the reader who responded to this question pointed out, in California there apparently is such a requirement. You should check to determine whether there is a parallel provision in your state’s employment law statutes.
Readers’ Responses to QQ # 6:
Response # 1
At least in California, an employee has a right to copy any document she signed relating to employment. In this case, even if the company is no longer going to view the original review as “official”, because it was presented to and signed by employee X, under California law I would think X does have a right to a copy.
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