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Don’t Slack on Slack Data Retention

Employee communication methods have undergone a dramatic makeover during the past five years — indeed, it sometimes seems, from month to month.

Slack, a collaboration tool for workplaces, has been among the forces upending the established communication order, offering an organized alternative to email. And its reach is significant: The company, which launched to the public in February 2014, now reportedly has more than 20 million active daily users. By 2025, various online sources estimate that figure will reach 47.2 million — and the number of monthly users will hit 79 million. Slack, now owned by Salesforce, says its clients include 77 of the Fortune 100.

Influential, yes; efficiency-driving, probably; complex, definitely.

That’s because wrapped up in these technological changes are potential legal minefields. If companies don’t consider how these shifts also shift their responsibilities and liabilities, they can quickly end up on the wrong side of legal action.

Slack messages are discoverable in most cases — and deletion of Slack data without mindful preservation has led to severe consequences for some defendants.

Below are vital details for today’s businesses, but keep these two takeaways top of mind: Check that your Slack data retention follows best practices, and proactively examine options for expert eDiscovery help — litigation at some point tends to be an inevitability.

Data on top of data

First, a quick primer on Slack. The self-dubbed productivity platform allows for collaboration across teams, and for many users, it’s becoming the primary mode of communication.

It’s very customizable. Users can create workspaces, channels and chats tailored to specific topics, which helps organize projects, groups, and instant messages. The visibility of these chats also can vary, including individual, private group, or public group discussions. On top of that,

Slack can be integrated with more than 2,600 apps, so the electronically stored information set is potentially massive.

Slack communication also is malleable. Users have the power to edit, unsend or delete records, and companies can set customized data retention policies, making retention unlimited or having data permanently deleted after a certain number of days. Channels can be archived or deleted when not needed anymore. Also, with a vast variety of potential communication types — messages, edits, emojis, photos, GIFs, and more — data exports can be difficult to decipher.

All of this adds up to two things: Slack data has become vital in legal discovery as it contains critical communications that just don’t exist in email, and obtaining it can be an unwieldy process.

A lack of Slack (data)

Last year, a U.S. District Court sanctioned Teledrip LLC, a marketing automation company, for apparently destroying data so that the information couldn’t be used in litigation.

With a potential trademark dispute looming from Drips Holdings LLC — another marketing automation company — a defendant switched Teledrip’s Slack retention setting from unlimited retention to seven days. Even after receiving a litigation hold letter soon after, Teledrip did not adjust the seven-day retention setting for nearly a year.

The defendants claimed they simply misunderstood their obligations, but the court didn’t consider that excuse credible. Citing an intentional destruction of and failure to preserve Slack data, the court imposed a mandatory adverse-inference instruction. Such an instruction allows a jury to infer that a party destroyed evidence because it was harmful to its case.

Examples such as this are why proactive, thorough approaches to data governance — basically, following relevant best practices — are such important safeguards. This applies to litigation, yes, but also to any regulatory compliance matters. And it’s vital to educate employees about their responsibilities.

For most companies, retention rules come into play when a company is — or reasonably should expect to be — involved in a lawsuit. But in some sectors, such as for companies involved in securities trading, there are strict rules for retaining messages even when litigation is not pending. The consequences for disregarding any of these retention rules can range from fines or penalties to automatically losing a case.

Ignorance is no excuse

In one case, the court found the discovery misconduct of a defendant so egregious that, rather than moving the case to trial, the court automatically ruled in favor of the plaintiff. At particular issue: repeated insufficient searches of archived Slack messages that would have helped the plaintiff’s case.

“The court recognizes that entering a default judgment for violation of discovery orders is a drastic sanction,” a September 2022 order states. “However, in this case it is fully justified and, indeed, necessary to do justice in this case and to deter others from engaging in similar extreme misconduct.”

The back story is helpful: In January 2019, Red Wolf Energy Trading LLC, which trades virtual electricity products with an eye toward predicting upcoming energy needs, sued Bia Capital Management LLC and other defendants, alleging that the investment banking firm misappropriated Red Wolf trade secrets in an attempt to create a competing business.

The defendants repeatedly failed to produce requested communications, particularly from Slack and Google Suite.

Finally, in August 2022, the court allowed Red Wolf’s litigation data vendor to search the 2019 Slack archive. One Slack chat in particular, which Red Wolf dubbed a “smoking gun,” included a discussion between two defendants — days after the lawsuit originally was filed — about making a new algorithm to mask that the original was derived from Red Wolf intellectual property. The court issued its default judgment shortly after.

The search also found 87 empty folders in the Slack Archive, causing suspicion that data had been deleted.

The defendants had claimed there was no easy way to search and produce Slack messages, plus a limited budget, so they had a consultant write a program to do so. Notably, the chosen consultant lived in Kazakhstan, had no Slack experience, and was to be paid in equity rather than money.

This did not help the defendants’ case.

Slack records may be unwieldy, but reputable eDiscovery processing tools can be affordable and save a company from significant time, money, reputation and legal fallout. Information often needs to be deciphered to achieve the necessary formatting, search and production of relevant Slack data. The tools and techniques used are also dependent on the type of Slack installation a company has purchased.

Given the stakes, it’s wise for a company involved in litigation discovery to partner with a vendor, like Array, who is equipped with the expertise and tools to export and sift through its Slack data. Such partnerships also can free up company resources to allow the core business to continue functioning as usual.

As these cases demonstrate, courts have little sympathy for companies that haven’t wrapped their arms around today’s rapidly changing modes of communication. Thus, proactive approaches to both data retention policies and seeking out eDiscovery experts can offer companies much firmer legal footing.

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