LEADING-EDGE LAW

Look for strings attached in hiring new employees Sadly, tough economic times have caused closures and layoffs by major Virginia employers.

But these cuts mean talented people will be available for hiring by new employers. These employers should be aware that many prospective employees come with legal strings attached.

Let's examine possible strings:

Contracts. Look for written agreements between the prospective employee and former employer. These agreements might contain some or all of the elements described below.

Sometimes an employee may be contractually bound to something he didn't sign, such as policies in an employee manual.

Also, even if the employee didn't sign any contract, the law may impose on him obligations to his former employer.

Confidentiality obligations. A former employee is obligated to guard the trade secrets of his former employer -- information that the former employer took reasonable steps to keep confidential and that has value because of its confidentiality.

The law imposes this obligation, although it might be detailed in a confidentiality agreement.

Examples of information that might be a trade secret (if the former employer handled it properly) are customer lists, internal financial information and production methods.

Also, the prospective employee may be obligated to guard the confidentiality of information provided to his former employer by third parties. This might be information the former employer agreed to keep confidential (such as information provided by that employer's joint venture partner) or that the law requires to be kept confidential (such as individual health information).

Noncompetes. Did the prospective employee sign a noncompete and, if so, is it valid?

A noncompete often is invalid unless it was tailored to the particular person who signed it. It must be reasonable in length of time, in geographic reach and in the scope of what it prohibits. If it's overbroad, it's invalid.

Yet any noncompete signed by a prospective employee should give a potential employer pause unless it clearly doesn't apply to the new job. The question becomes whether it's worth the cost to fight enforceability.

Nonsolicitation agreements. Sometimes the employee didn't sign a noncompete but he promised to not solicit customers of an employer during a period after employment ends. Sometimes this obligation extends to customer prospects contacted by the employer and to former customers of the employer.

Copyrights. Generally, by law an employer owns the copyright to work an employee creates on company time and using company resources. Copyrights cover creative works, such as advertising material, manuscripts and computer code.

Copyrights will matter if you wish to use material the prospective employee created before employment.

Patents. Unlike copyrights, by law generally an employee owns the patent rights to whatever he invents even if he creates the invention while working on company time and using company resources.

Nevertheless, if the prospective employee worked in research and development, he may have signed an agreement requiring him to disclose all patentable inventions to the employer and to assign all patent rights on those inventions to the employer. Such an assignment might even cover some inventions the person completes after his employment ends.

Even if there was no such agreement, a lot of patentable technology starts out as an employer's trade secret, which must be kept confidential.

What can you do? Everything depends on the circumstances, but here's a partial list of things an employer can do to screen prospective employees:

John B. Farmer is a lawyer with the Leading-Edge Law Group PLC, which specializes in intellectual property and