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Excellent news, Linda, thanks for this. We would never have spotted this in the Help
You're in luck! This function already exists in RICOH ProcessDirector. I am attaching a PDF of the InfoCenter topic that describes how to set up the step to run when a job enters the Error state for a step. Basically you test for the value of the Current job state property to equal Error as you branch out of the step and you can define whatever next step(s) to run.
This function was added in Version 3.6.