Is it okay to ask potential hires about previous NDAs?
I'm in the midst of conducting research on starting up a small consulting/services business. Some of the services provided would involve developing proprietary algorithms. I would like to avoid potential legal issues regarding intellectual property of algorithms.
I'm assuming that if I am presented with two nearly-identical candidates, the risk of legal action associated with hiring the one with more previous NDAs would be higher than the risk of hiring the candidate with less.
Given this assumption, I would like to inquire during interviews about any previous NDAs relating to proprietary algorithms. However, this seems as it may be a legal grey area.
The Question: Am I allowed to ask about NDAs in an interview? If so, to what degree? Furthermore, does asking about NDAs during an interview put me at risk of being accused of trying to poach intellectual property if I were to hire a candidate who had signed one or more NDAs?
I know this is asking two questions in one post, but I think the two questions are closely inter-related. My decision whether to inquire during an interview will most likely be based on some risk-benefit trade-off.
I plan on doing business in Ontario, Canada (at least for now) if that helps narrow the question down. I did have a look around on the internet and in a few books, but I was unable to find any substantive answer pushing me in either direction. I am considering going to a lawyer to ask, but I would like to keep preliminary costs down as much as possible.
Thank you for your time and attention.
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did you look at the other posts on ndas? http://answers.onstartups.com/questions/tagged/nda – Jim Galley 12 years ago
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IANAL, but you have right to ask if the party has any active NDA's or Non compete clauses, and if so, if they are related to / in conflict with your primary business. Otherwise, every hire could be a lawsuit. – Jim Galley 12 years ago
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If the person signed an NDA they have an obligation not to disclose. Why does it matter to you how many NDAs a person has signed? The more relevant issue is if they have non-compete agreements. If the person is unethical then you have made a mistake in any case. Their trustworthiness is independent of the number of NDAs they have signed. Limiting candidates based on valueless guesses about risk with respect to NDAs is a mistake. – Tim J 12 years ago
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Please consult an attorney and do not substitute this site for specific legal advice in this matter. You can save money by asking this question to the same attorney who handles your own employment matters. You might want to ask about the risks and duties involved in scenarios where you ask abut NDAs compared to not asking. – Yorick 12 years ago
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@TimJ I think you are incorrect. A candidate has the responsibility to disclose anything that would either a) prevent them from doing the proposed job or b) potentially be a conflict of interest. Only in classified work (think: US Feds) have I seen a "you can't admit the existence of this document" agreements. – Casey Software 12 years ago
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@Casey - I don't think the candidate has any responsibility - an NDA is just that -- a non disclosure. What would be relevant. I certainly don't advocate lying but I don't see why an employer needs to ask about "how many NDAs did you sign?" That's none of their business, frankly. – Tim J 12 years ago
2 Answers
You should make every new hire sign something that states that the person isn't violating any prior NDA in the person's performance of services for you, and that the person will not disclose any information to you in violation of an NDA. That's a standard representation in an employment agreement. You could show your form of employment agreement to the person before extending an offer and confirming that the person could sign it.
As mentioned above in a reply (which I can't up-vote) you should be worried about non-competes, not so much NDAs. Even non-competes can be tricky depending on when they were offered the employee, what state it was signed in, etc. I had our lawyer working our funding papers explain nuances for our state and recommend you befriend/ask yours. If you don't have a lawyer no sweat, look around for the local entrepreneurial get-together and you;ll likely find a few selling their company and happy to give some (limited) free advice like this;)
