Federal Court Orders KPMG To Preserve 2,500 Hard Drives

http://ow.ly/95mku

An article by Ben Kerschberg published by the Forbes.com website.

This article discusses the recent high profile KPMG case, and the order that was upheld on appeal requiring KPMG to preserve 2,500 hard drives.

The article states, "In Pippins v. KPMG LLP (S.D.N.Y. Feb. 9, 2012), Pippins and other putative class plaintiffs sued KPMG under the Fair Labor Standards Act (“FLSA”), which guarantees time-and-a-half pay for overtime above 40 hours for certain jobs. The plaintiffs, who worked as Audit Associates, alleged that they were deliberately denied overtime wages. The FLSA’s overtime rule does not apply to those employed in an executive, administrative, or professional capacity that involves discretion and independent judgment “with respect to matters of significance” and requires either (i) an advanced knowledge of science, or (ii) specialized intellectual instruction."  A link to the FLSA is provided in the article.

The article further states, "The court found that as long as KPMG was allowed to use the discovery stay during the determination of class certification, it would be impossible to determine whether the relevance of information stored on even a single hard drive. The court reiterated the magistrate’s finding that the individual employees were “key players . . . likely to have relevant information” about the nature of their jobs, and thus whether they were due overtime under the FLSA. Accordingly, KPMG had a duty to preserve every Audit Associate’s hard drive when the suit was first filed “because at that point it became foreseeable that each and every Audit Associate could be a potential plaintiff.” As a result, it was “premature” to permit any hard drives to be destroyed."