Electronic Personnel Files and Signatures Are Valid Under ERKA



By:  Karen L. Piper


The Sixth Circuit Court of Appeals rejected an employee’s attempt to prove her discharge was racially motivated by seeking to exclude her discipline record.  The employee argued her discipline record should not be considered because the record was signed and stored electronically, not in paper format. Richardson v. Wal-Mart Stores, Inc., Case No. 15-1142 (6th Cir. 9/9/2016) (recommended for publication). 

Michigan’s Employee Right to Know Act (ERKA, also known as the Bullard-Plawecki Employee Right to Know Act) allows employees and former employees to review their personnel file up to two times a year upon written request.  ERKA also allows employees and former employees to obtain copies of their personnel file upon written request.  Generally, information that should have been, but was not, included in a personnel file provided to an employee cannot be used in a judicial or quasi-judicial proceeding.  ERKA does not address electronic storage of personnel files or electronic signatures on personnel records.

Reva Richardson worked for Wal-Mart in Lansing, Michigan for 12 years.  At various times, Ms. Richardson worked as a department manager and a customer-service manager.  She was not working as a manager when she discharged for misconduct following her fourth disciplinary action or “coaching” under Wal-Mart’s progressive discipline policy.  Following her discharge, Ms. Richardson sued Wal-Mart for race discrimination.  She claimed, among other things, that the coaching documents were not valid because they were signed and stored electronically.  The Sixth Circuit rejected both arguments.

Wal-Mart’s progressive discipline policy provided for increasingly higher levels of coaching each time an employee failed to meet performance expectations or violated company policies and procedures.  A manager issuing a coaching was required to review the coaching document in a meeting with the employee and a second manager, acting as a witness.  The two managers were required to acknowledge the coaching document by inputting their user-names and passwords.  Employees were required to write a corrective action plan in response to second and third level coachings.  A fourth level coaching could result in discharge.  Ms. Richardson was discharged following her fourth coaching in a 26-month period.  Ms. Richardson challenged the validity of the coaching documents. 

The managers who coached Ms. Richardson had electronically acknowledged the coaching documents by inputting their user-names and passwords on the coaching documents.  Ms. Richardson also acknowledged the second coaching document by inputting a corrective action plan by using her user-name and password.  The court decided that these electronic signatures were valid.  “Although the coaching documents were not signed by hand, they were acknowledged electronically by the employee and managers using their user IDs and passwords, and under Michigan law, electronic signatures have the same legal effect as handwritten ones.”

Ms. Richardson also argued the coaching documents should be excluded under ERKA because they were not stored in her paper personnel file.  The court ruled, “[n]othing in [ERKA] dictates that all records relating to an employee must be maintained in a paper-file format.”  Moreover, Ms. Richardson never requested a copy of her personnel file, so she was not in a position to argue that any of the coaching documents Wal-Mart produced in litigation had not been kept in her personnel file.  The Sixth Circuit ruled that Wal-Mart’s electronic documentation of Ms. Richardson’s performance issues and misconduct rebutted her claim that she had been discharged because of her race, and affirmed dismissal of her claim. 

Typically, the first sign to an employer that a former employee is considering a lawsuit is the employee’s request for a copy her personnel file.  Whether maintained in electronic or paper format, employers should be sure to give the employee all personnel documents it may wish to use in litigation, if filed by the employee.  Questions whether specific documents should be included in the employee’s personnel file should be reviewed with experienced employment counsel, such as the author, before giving the employee a copy of her file. 

This article was written by Karen L. Piper, who is Secretary of the Board of Detroit SHRM, a member of the Legal Affairs Committee, and a Member of Bodman PLC, which represents employers, only, in Workplace Law.  Ms. Piper can be reached at Bodman’s Troy office at (248) 743-6025 or kpiper@bodmanlaw.com.

Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information are included in the re-post of the article.  September 2016.