Data Retention Policies: How to Store and Dispose of Sensitive Information Legally in New York

Ever feel like your business is sitting on a mountain of sensitive information, and you're just waiting for something to go wrong?

Between state laws, federal rules, industry standards, and cybersecurity threats, it’s hard to know what to keep, what to toss, and how to even begin making those calls legally. One wrong move and suddenly you’re dealing with fines, lawsuits, or worse, lost trust from the people who count on you. 

And if you're ever pulled into legal conflict? Yes. How you handle data can absolutely become part of your defense strategy. The truth is most businesses are collecting more data than they need, holding onto it too long, and not quite sure how to fix it. And that’s okay. We can help with that.

Our commercial litigation attorneys at Horn Wright, LLP, work with businesses across New York to create simple, clear, and legally sound data retention policies. We break down the rules, help you decide what’s essential, and put systems in place that actually protect you, so you can finally take that stress off your plate.

Don’t Break the Law: Here’s What New York Really Wants You to Do with Your Data

Data laws aren’t exactly light reading.

But here’s the deal. If your business collects private information from New Yorkers, and that includes names, Social Security numbers, email addresses, or anything else personal, you’ve got some legal responsibilities. 

And ignoring them? That’s not a risk you want to take. Start with the SHIELD Act. It’s New York’s way of saying: “Hey, businesses, protect people’s data and delete it when you’re done.” 

It doesn’t give you a specific deadline for deletion, but it does expect you to be reasonable and responsible about it. What does that look like? A few key things:

• You’ve got to set up real safeguards. That means limiting who can access private info, training your staff, and locking down your systems. No more storing customer details in old spreadsheets on someone's desktop.
• You need to get rid of data you’re not using. That could mean shredding physical files, wiping hard drives, or setting your cloud storage to auto-delete after a set time. Whatever your method, it needs to be secure and trackable. 
• And no, you can’t keep everything “just in case.” That logic won’t hold up if regulators come knocking or if a breach exposes years of unnecessary records. The SHIELD Act makes it clear. You should only be holding onto private info if there's a legit reason for it. 

Don’t forget. Federal laws apply, too. And if you’re in healthcare, finance, or employment, your obligations are even stricter:

• Health Insurance Portability and Accountability Act: Requires retention of health records for at least six years. 
• Gramm-Leach-Bliley Act: Mandates that financial institutions protect and securely dispose of customer records.
• Sarbanes-Oxley Act: Enforces a seven-year retention period for audit-related financial documents.
• Employment records: The New York Human Rights Law and Equal Employment Opportunity Commission regulations require employers to retain applications and employment documents for at least one year. Often more, depending on the situation.

In New York, the legal landscape’s no joke. Especially if you’re near places like Albany (where regulators watch closely) or in NYC’s financial and business hubs. If you’re ever tied up in breach of contract claims, poor data management can absolutely come back to haunt you.

Still Clinging to Old Data? Here’s Why That Could Hurt You

Let’s talk about something most people don’t want to admit: your company is probably holding onto more data than it should. And while it might feel harmless, it’s not.

Here’s what happens when you keep unnecessary data around:

• You’re a bigger target. IBM says the average U.S. data breach costs over $9.4 million. And older data? That’s often sitting in outdated systems with weaker protections. Hackers love it.
• Legal issues snowball. If you get audited or hit with a lawsuit and your retention policy is fuzzy, you might have to produce records that should’ve been deleted. That one stray email from 2016? It could end up on the courtroom screen. If you’re facing commercial lawsuit, you want to be able to say: “We deleted that data by the book.”
• Customer trust takes a hit. Nobody wants their info sitting on your server for years after they stopped doing business with you. Just ask the lender fined $1.5M for storing outdated customer data.
• Storage costs climb. Cloud storage might seem cheap. But keep old data too long, and your monthly bills rise. Plus, you're paying for backups, monitoring, and potential breach insurance on data you don’t even need.

A clear, defensible data retention policy helps you reduce all of these risks before they spiral out of control.

Want to Stay Protected? Build a Policy That Can Actually Defend You

You don’t need a giant compliance manual. You just need a system that works and stands up under pressure. Here’s how to build one:

1. Map Your Data

Know what you’re collecting, where it lives, and who has access.

• Types: Contracts, emails, payment info, employee records, customer messages - everything.
• Storage: Cloud drives, local servers, laptops, shared tools like Google Drive or Dropbox.
• Access: Run audits. Limit permissions. Make sure access logs are trackable.

If you’re in a partnership that’s breaking down? A partnership dispute attorney may need a full picture of where business data went.

2. Align with Legal Timeframes

Don’t guess. Use legal benchmarks.

• Client contracts: Retain for at least six years per New York’s Civil Practice Law & Rules Section 213.
• HR files: 3–5 years is a safe window. Some OSHA records must be held for five.
• Marketing lists: If someone hasn’t engaged in a year, let them go. The FTC advises limiting data collection and retention.

3. Write a Simple Policy

Your retention policy should spell out:

• What you keep
• How long you keep it
• When and how it’s deleted
• Who enforces it

If you're part of a growing team or a corporate litigation firm, make it accessible across departments. No confusion. No guesswork.

4. Use Automation

Manual deletions? Too risky.

• Use Microsoft 365 or AWS lifecycle policies to auto-delete by age or type.
• Use Varonis to monitor who’s touching what data, and when.

5. Train Your Team

Hold training at least once a year. Walk through real examples. Explain what’s okay to delete and what’s not.

And don’t forget to assign someone ownership. If no one’s responsible, no one will follow through.

6. Review and Refresh

Set an annual policy review date. Update your retention timelines when the law changes or your business does.

Partner With Top New York Attorneys at Horn Wright, LLP

Your data policy shouldn’t stress you out. Our commercial litigation lawyers at Horn Wright, LLP, help businesses across New York take control of their records, reduce legal risk, and build strategies that actually work. 

Whether you're facing regulatory audits, legal disputes, or just trying to get organized, we will help you stay ahead. When you're ready to do this right, don’t settle. Let one of the best law firms in America help you protect what matters most.

Contact us online or call (855) 465-4622 today to schedule your complimentary case evaluation.