Employer Alert: Changes to Discovery Laws May Also Increase Costs on California EmployersFeb 11, 2020
By Nicholas Grether, The Maloney Firm APC
New laws continue to increase the costs of doing business in California. 2020 brought significant changes to California’s employment laws, markedly changing the landscape for California employers. While the impact of these new laws has been the subject of extensive commentary, there are other changes in the law that also impact California employers facing employment suits, which appear outside the Labor Code.
More Costly Responses to Requests for Production
SB 370 changed parties’ obligations when producing documents in a lawsuit, substantially increasing the burden on parties producing documents. SB 370 modified Code of Civil Procedure § 2031.280 to require a party producing documents in response to discovery indicate the particular documents responsive to each document request. Previously, parties were only required to state that they would provide documents in whole or subject to some limitation, object to producing documents, or respond that the party could not provide responsive documents. Parties were also permitted to produce documents as “kept in the ordinary course of business,” an option SB 370 has eliminated. In employment matters, where the defendant employer typically has the lion’s share of the documents, SB 370 will likely increase costs to prepare discovery responses and produce documents, since employer’s counsel will have to take the extra step of matching up the documents to each request. And because employers generally produce more documents in employment lawsuits than do plaintiff employees, this new requirement will increase the discovery burdens on employers and likely will result in expensive discovery disputes concerning whether documents are responsive to a particular request. Similarly, it would not be surprising for litigants to seek rulings that documents produced may only be offered into evidence with regard to the topics embraced by the requests to which they were assigned.
Additionally, the requirement of identifying the requests to which documents were produced applies equally both to physical documents and to Electronically Stored Information (ESI). Unfortunately, the Legislature provided no guidelines on how to label or identify ESI to satisfy this new requirement. In a case with substantial ESI, counsel should meet and confer to seek agreement on how to exchange that information in order to avoid disputes and unnecessary expense. For example, a single file containing emails could contain hundreds of emails responsive to a number of typical document requests. Matching individual emails to specific requests would be a costly and time-consuming practice. Given the lack of clarity, employers should utilize efficient means of storing and reviewing ESI in order to save time and money during litigation.
Optional Use of Initial Disclosures
A new, if familiar, option in litigation is to agree to exchange initial disclosures (as is done in federal court). SB 17 added California Code of Civil Procedure § 2016.090 allow the parties to create, by agreement, reciprocal obligations to exchange information without the requirement of formal discovery requests. Both parties must agree in writing and a Judge must give the order to use initial disclosures. Within 45 days of the Judge’s order, each party would exchange the names and contact information of witnesses, documents supporting claims or defenses, and insurance information. As with federal court practice, parties would be required to supplement their initial disclosures as they obtain more information. If a party fails to make proper initial disclosures, an order compelling the disclosure may be sought from the court.
Opinions on the efficacy of initial disclosures are mixed, but they allow for an exchange of key information and documents relevant to the claims and defenses at an early stage. Use of initial disclosures might also provide some peace of mind should the parties agree to an early mediation and hold off on other discovery in an attempt to keep costs low. Attorneys can be wary of agreeing to stay discovery if they lack the documents and information necessary to conduct a meaningful mediation. By agreeing to exchange initial disclosures in advance of mediation, the parties may save the time and expense of traditional discovery while still providing the exchange of sufficient information to allow a productive and perhaps successful mediation. On the flip side, some attorneys worry that if initial disclosures become mandatory in state court, that may be another increased cost on employers in litigation, as they would be compelled to produce a broad array of documents they wish to use to fashion their defense at the outset of the case before the issues are clarified.
With these changes to the discovery rules, it is more important than ever that California employers ensure their documents are organized and ESI is readily accessible. Complying with the new requirements and finding ways to increase efficiency will allow all parties to save time and money in employment litigation.
About the Author:
Nicholas Grether is an employment attorney in the Employment Law Department at The Maloney Firm, APC. If you have questions regarding this alert, contact Nicholas Grether at email@example.com.