A Bargain for Privacy
June 4, 2011When confidential business information comes into play, it is imperative that parties diligently bargain to protect their interests. Once an agreement is reached the parties will be expected to uphold their side of the bargain based on the other side’s reliance.
The plaintiff in this case moved to modify a confidentiality agreement that was previously made between the two parties. The defendants in the action were required to turn over confidential business information in reliance of a confidentially order agreed on by the parties. The original order stipulated that any documentation produced during discovery would either be returned to the party, which produced it or destroyed in its entirety.
The plaintiff inadvertently saved the defendants’ confidential information onto back-up tapes in their law firm’s computer system. The plaintiffs requested the court modify the confidentiality order to allow them to keep the information stored on the back-up tapes as long as they enacted certain safeguards to protect the information because it would be “too costly to delete the information from the tapes.”
The court held that the high cost of removing data from a backup tape did not justify modification of the confidentiality stipulation. The court found that “such cost does not outweigh defendants’ bargained-for interest in the post-litigation destruction of its business information in outsiders’ hands.” the court focused on plaintiff’s counsel, “who have demonstrated experience in and sophisticated knowledge of electronic discovery matters, [and] should have foreseen the problem and addressed it when the Confidentiality Order was being negotiated.” The last consideration was that, “the proposed safeguards against access by third parties amount to something considerably less than a guarantee.”
It is extremely important that companies protect the secrets of their trade. In the legal system it is possible that confidential business information may become an important part of the litigation. It is prudent to negotiate the limits and boundaries with regard to confidential business documents early on in the discovery process. This early discussion can create a strong source of protection long after the dispute has been settled. Likewise, it is duly important that counsel be diligent when handling sensitive business information from an adverse party. Counsel should always be aware of the technological system and any volatile effects it may have on agreements between parties. This is especially true when a strong confidentiality agreement has been agreed to; it must then be strictly adhered to.
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Tagged as: Chain of Custody, Computer Forensics Protocols, Discoverability, Meet & Confer, Production of Data.
View more articles implicating: Document Custodians, In-House Counsel, Information Technology Professionals, Outside Counsel, Owners/Executives
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