Call it what you will, but as a hiring manager you really should review as much code as possible before hiring. Usually they can't show you proprietary code from their last company, so unless they've already done open source contributions, there won't be much to look at unless you give them a project.
In the past I've given candidates projects that we've come up with together. Check out the ones mentioned in the article... fairly straightforward Rails plugins. One of the was particularly successful, and included in the Advanced Rails Recipe book.
So you're fine with (a) open source contributors just providing you with samples of their previous work, (b) people who can show you non-public code just showing you that, and (c) candidates coming up with example projects totally unrelated to your own products, so long as it's demonstrative of the right expertise.
In the past I've given candidates projects that we've come up with together. Check out the ones mentioned in the article... fairly straightforward Rails plugins. One of the was particularly successful, and included in the Advanced Rails Recipe book.