Many smart companies are using social media to generate business outcomes. But who owns these accounts when a person moves on?

1. If the face of your brand builds a Twitter following does it stay or go with them?
2. If you employ someone because of their online Klout what right do you have to their previous relationships?
3. If staff use professional networks like LinkedIn in place of contact management systems to generate leads, who owns that data?
4. Who owns your LinkedIn account?
5. If a former employee with a ‘restraint of trade’ clause updates their LinkedIn profile is this ‘soliciting’ or just the ‘new grapevine’?
6. On the other hand, if you do not update your LinkedIn profile when you move on are you falsely representing yourself as a current employee?

These are just some of the questions that businesses are grappling with in relation to social media and there are no easy answers.

While existing law covers the online space, there have been too few cases to provide clarity on its application (precedent) and not surprisingly, considerable disagreement over judgments.

For example, last year the online US news company PhoneDog settled a lawsuit against its former editor Noah Kravitz who built 17,000 Twitter followers under @PhoneDog_Noah but changed the account to @noahkravitz and kept the followers when he left.

PhoneDog sought $340,000 damages for alleged misappropriation over eight months; while Kravitz said PhoneDog had asked him to use his Twitter account to post ads for the company.

Perhaps disappointingly from the perspective of law the case was settled out of court, but the incident generated enormous debate about who owns these valuable relationships.

It was also the first time that a dollar value had been placed on a follower (US$2.50) within a legal context.

As far as Twitter is concerned, writing for the Australian School of BusinessWharton professor of legal studies Kevin Werbach argues that because Twitter is free and people follow or unfollow others at whim, neither a company nor an individual can ‘own’ followers.

He distinguishes Twitter followers from a company’s customer list because, he says, it is not used internally to generate business.

I am not sure this is always the case. Many companies actively use social media to generate sales. The bigger challenge is measuring conversion from social media engagement to sales as a contribution to ROI. (For example, a recent Forrester report suggests that around 1% of sales can be directly traced back to social media. But that search, which is generated by producing and sharing content including via social media networks, accounts for nearly 40% of eCommerce transactions.)

Jamie White, social media law expert at Pod Legal, agrees that a Twitter account is not capable of being owned but suggests that is because, like a domain name registrant, a Twitter user is granted a revocable licence to use the platform for its intended purpose.

However, because the issue has not been resolved in law, White suggests that employers clearly set out their expectations around ownership in employment contracts and policies.

“This takes away what is often an inevitable dispute around the treatment of social media accounts and contacts when a contract expires or ends,” he said.

In the absence of specific terms, lawyers are looking to existing law to draw analogies. But even where this occurs, because these are global platforms it is difficult to extrapolate findings from one jurisdiction to the other.

For example, in cases similar to PhoneDog, in the US a company could look at whether the employee used the company’s trademark for personal gain. However, this is not the case in Australia where, as White points out, there is no need to show ‘personal gain’ and a company can take action if a person uses a trademark or a variation of it without authorisation.

However, this approach does not get to the heart of the issue. Because Twitter is a personal network people tend to use photos rather than trademarks to increase engagement. (An assumption Mediabistro’s Lauren Dugan points out has not yet been validated).

The issue of ownership also varies depending on the platform and its user agreement.

In another US case, training company Edcomm tried to claim the LinkedIn account of former employee Linda Eagle by changing her password and replacing her information with that of her successor when she left.

Eagles sued the company for theft and invasion of privacy for hijacking her account.

In this case, judge Ronald Buckwalter rejected the company’s claim and found Eagle was the rightful owner. But in his judgment he said the outcome might have been different if the company had paid for the account and required Eagle to build it on work time.

Whatever Buckwalter’s view, it would need to be tested since LinkedIn functions for most as an online resume showing previous and current experience and a mixture of personal and professional contacts.

In a bid to try and avoid dealing with ambiguity, some employers have taken a hard-line approach to social media, allowing only work computers to be used for work-related social media.

I believe this is impractical and likely to fail because it does not address the enormous impact of hyper-connectivity on the workplace, and the nature of work.

It also ignores a key imperative: business survival. Already eight people come online a second from around the world on mobile and social networks to connect, collaborate and shop and Boston Consulting Global predicts social media will be worth $4.2 trillion to the G20 economies by 2016. What business can afford not to be there?

The way we engage today is also vastly different from the structures that were established in the industrial age, where core hours and the boundary between personal and professional were clearer cut.

Many employees bring their own devices to work, providing opportunities for flexibility and challenges for those who manage IT. We are ‘on’ 24-hours a day, checking work emails at midnight or Facebook at 10am. This has a significant impact on the way that we measure ‘time at work’.

Studies also show that for many employees, accessing social media is more important than a pay increase and can create high engagement and better productivity on the job; an argument for ‘right-use’ rather than ‘no-use’ policies.

These issues are harder to tackle right now because social media law is in its infancy. In the future employers will need to deal with the implications of the complex digital footprints of new and existing employees as a matter of course.

Businesses can however better manage the current environment by educating leaders and developing clear social media policies and practices, including:

1. Ensure leaders are educated about the opportunities and risks of social media before deciding how to manage it as a business. Many leaders still do not understand social media and believe it is a fad (it is 10 years old) or on the fringe (it is a requirement for ASX listed companies to monitor social media and the company secretary has to take social media into account when determining risk appetite).
2. The Australian Competition and Consumer Commission (ACCC) has said all businesses should monitor platforms and have 24 hours (or longer for small businesses) to act on misleading information. Businesses are responsible for comments made by others on their sites.
3. Clearly state company policy on social media in employment contracts.
4. Develop clear social media policies and train against them to ensure they are enforceable. Here’s a great example of how the Department of Justice in Victoria did their’s in a contemporary way.
5. Set up accounts that belong to the role rather than the individual where the company controls the password. For example, the Vatican and not the individual pope manages @Pontifex.
6. Ensure all divisions understand the environment. It’s no good setting targets for people but barring them from engaging in networks that that are vital to achieving them.
7. Work with social media strategists and lawyers who are visibly active on platforms. Many professionals are appending ‘social media’ to their resumes with little (and even no) social media proof. Although measures like Klout and Kred are imperfect in the absence of alternatives, they provide a good start.

This article first appeared on Leading Company.

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