Recordkeeping: Can We Destroy Paper Originals if We Keep Scanned Electronic Copies on File?

We have many employment documents that bear a seal or have a signature or a notary’s stamp. If we scan the documents and store them electronically, can we keep (and properly index) only the original pages that have the seal, signature, etc., and destroy the rest of the pages? Or, even better, can we scan the whole document and destroy all of the original pages? — Hoping to Streamline in San Gabriel

For important employment records—such as employment contracts, stock agreements, and general releases—it remains best practice to retain complete original signed documents. However, original signatures, including notarized documents, are not as legally significant as they once were. Although many companies continue to store original employment records in dusty, overflowing file rooms in case of lawsuits or government audits that may never occur, these employers may be able to clean house by digitizing records and discarding the originals. A printout of an electronic soft, or digitized, copy is generally admissible in court and will be accepted by a government agency during an audit as long as the employer can establish the copy’s authenticity.

For ages, a seal (such as a notary’s stamp and signature) carried distinct legal significance. A notary’s seal is a form of authentication attesting that the party in fact signed the document. A court will presume that a notarized signature is genuine and not forged. Traditionally, courts admitted into evidence only original papers bearing the notary’s mark. The “best evidence rule”—admitting only original documents—was intended to prevent crafty litigants from using copies to distort documents to their advantage. However, the rule served little practical purpose as litigants are almost certain to object to any falsified documents at trial. Under current law, a paper copy, a CD-ROM, a microfilm, or some other electronic copy is just as admissible in litigation and in government agency audits and enforcement proceedings as the original record.

Accordingly, employers may scan an entire document bearing a notary’s seal and keep only the original page with the seal and signature or even dispose of the original entirely. Similarly, companies may digitize documents bearing employee signatures, such as employment offers, disciplinary records, and time cards, and toss the originals. Unsigned records, such as payroll records, may be stored exclusively in electronic form.

However, some unique legal issues related to electronic copies can come up. An employer that scans its business records and then discards the originals may face a legal hurdle (albeit not an insurmountable one) should the employee dispute the document’s authenticity. Courts will refuse to accept copies into evidence if it would be unfair to do so—for example, if a copy is incomplete, blurry, or otherwise suspect as unauthentic. However, as a practical matter, an employment record’s authenticity is only rarely litigated, as the parties will instead almost always focus on the document’s substance and the case’s merits. And government agencies, too, will not be satisfied with incomplete records or other sloppy recordkeeping practices.

Given this legal framework, employers should consider a document’s importance before disposing of the original and relying entirely on a paper or electronic copy. If it is easy to verify the content of a business document, such as an employment offer, the most effective and cost-efficient solution may be to scan the document and discard the original. Conversely, if the parties have bothered to have a document notarized, it is likely to be legally significant and the company may want to keep the original.

How To Survive an Employee Lawsuit: 10 Tips for Success

With lawsuits against employers becoming ever more common—and jury verdicts skyrocketing—your risk of getting sued has increased dramatically even if you’ve done all the right things. Learn how to protect yourself with our free White Paper, How To Survive an Employee Lawsuit: 10 Tips for Success.

Should the employer choose to digitize records, it is also important to index them for easy access. It does the employer little good if, once digitized, the company cannot find a particular record in a huge mass of electronic data when the need arises to retrieve that document. Lastly, employers that rely entirely on electronic copies should be aware of the risk of keeping only one copy of important documents. The best practice is to store one copy on-site and another in a different location.

Allen M. Kato, Esq., is an associate at the San Francisco office of the law firm Fenwick & West, LLP. Marshall Mort, who helped prepare this answer, is a summer associate at the firm.