Potential pitfalls in the hiring process

If you own a business, you know what qualities you want in a prospective employee. Clients often ask me what they can do to protect their company during the hiring process.


First, you should generate a list of legally justifiable employment criteria for each job position, and then hire the prospective candidate that you believe best fits those criteria. Do not ask questions during the interview that express any potential discrimination against members of a protected class (e.g., Are you pregnant? How old are you?).


Second, since California courts have held employers liable for defamation and interference with prospective economic advantage when provide employment references, many employers refuse to disclose information about a prior employee except for the fact and dates of employment. There are several strategies to solve that problem. For example, have the prospective employee sign a written permission for you to contact his or her prior employee, with a waiver of tort claims. Provide the permission and waiver to the former employer. 


When offering the job, the offer should be in writing, and should clearly spell out the terms of employment, hours, compensation, bonus structure, and any benefits. The agreement should clearly indicate that the employment is "at will", rather than a specified term, and should contain an "integration" clause that states the agreement is the final and only expression of the parties' agreement. 

If the employee has access to your company's trade secrets, make sure the employee signs a confidentiality provision in which he or she agrees to maintain the confidentiality of the trade secrets. Failure to do so may jeopardize the classification of the trade secret. But, do not reach too far. Agreements in California limiting one's right to earn a living are void and can carry penalties against the over-reaching party.