Last month, we reviewed the issue of identity theft and the impact of recent legislation regulating the protection of sensitive information. For electrical contractors, the adoption of policies and procedures for records management includes a defined program of scheduled retention and appropriate destruction. Remember, most information theft occurs from “Dumpster diving,” which is not illegal. Protecting your confidential and proprietary information requires that you guard the records while they are in your possession, store them securely and dispose of them completely.
For most electrical contracting businesses, the paper trail seems to end with project closeout and final payment. In reality, you must decide how to handle the records you no longer need for customer service or regulatory compliance. To avoid criminal and civil prosecution for the release of private information or competitive losses from industrial espionage, destroy your records on a regular schedule.
A defined retention and disposal system is built on consistency and documentation. You must be consistent in the method and means, timing, range of storage locations, and class or type of records you retain and destroy. Your documentation must include written schedules and policies, evidence of employee training, procedures for selecting and evaluating a destination and disposal contractor, and permanent activity records that list all incidences of record disposal.
Selecting a method for final disposal requires serious thought. The usual options include removal to a landfill, incineration, recycling or shredding. You may shred documents internally, but since you probably do not own an incinerator, recycling plant or landfill, hiring a qualified subcontractor will be an essential part of your documented procedure.
Landfill disposal appears to be a safe and cost-effective method, especially if the contractor promises to create a “special hole” and bury your documents immediately; however, the information is not obliterated. In fact, a University of Arizona study found that burying documents in a landfill effectively serves to preserve them, protecting them from normal degradation that follows exposure to the elements.
If you are ever involved in a lawsuit, a regular schedule of records destruction enables you to limit the amount of material you must produce under Federal Rule 26, which allows parties to a lawsuit 85 days from the initial defendant response to produce all relevant records.
Do you want to risk the aggravation and expense of unearthing your records from a landfill to comply with a discovery request? Since the information is not quickly obliterated, it is possible, though unlikely, for you to receive such a discovery request.
Incineration obliterates records, but environmental concerns have reduced the number of operating incinerators, so this may be one of your least viable options and one of the most costly.
Recycling is the preferred method by environmentally conscientious business owners; however, the recycling contractor does not intend to destroy the records or obliterate the information. Baled records may sit for weeks outside of a paper mill, and 10 percent are eventually discarded intact to landfills, due to contamination or deterioration. There is no way to determine the date of destruction and no acknowledgement of fiduciary responsibility by the recycler.
Because of stringent confidentiality requirements, shredding is becoming a growing industry. The document shredding company places closed containers at your business, and employees immediately drop documents through a slot in the locked container when they finish with them, so documents are not left in open wastebaskets.
Periodically, the company removes the material from the locked boxes and shreds it immediately in its truck, or delivers it to a shredding plant. Shredding obliterates the information contained in the records, and shredded documents can be recycled.
The National Association for Information Destruction (NAID) lists several hundred contractors, and uses a code of ethics and a certification process to qualify its members. NAID advises businesses seeking a shredding contractor to insist that the vendor is willing to ensure the following: Custody through destruction, employee background checks, adequate insurance coverage, minimum residual particle size, restricted access to customer materials, clear identification of pickup employees, receipts for material taken (accepting fiduciary responsibility) and complete documentation of destruction.
No matter what type of contractor you choose, you can never completely transfer your responsibility to maintain confidentiality of materials under the law. In a survey of top executives from 300 companies by the Conference Board, security of company records was one of the top five critical issues listed, ranking second to employee health screening as the issue most requiring immediate attention and policy development.
With this level of concern among managers and increasing vigilance by lawmakers, you can’t dispose of the records destruction problem without thinking beyond the Dumpster. EC
NORBERG-JOHNSON is a former subcontractor and past president of two national construction associations. She may be reached at email@example.com.