Q: Who Owns Your Sales Leads, You or Your Sales Rep?

Short answer: your sales leads should belong to the company, but social media has blurred the line. Settle it in advance with a policy and employment-agreement language that says all contacts are company property, including connections made on LinkedIn, and back it up by treating the list as a trade secret. That is how you control sales lead ownership before a rep ever resigns.

This used to be an easy question. You owned the leads, and you had possession of them. In the age of LinkedIn, X, and the rest, it is not so simple, because your rep’s personal “network” and your company’s lead list now overlap and live partly on platforms you do not control.

1. Where Are Your Sales Leads Stored?

Old days: the CRM (internal) plus a Rolodex (internal, but portable).

Now: the CRM (internal), the Rolodex (internal, portable), and LinkedIn, X, and Facebook (external, controlled by your rep’s personal account).

2. The Solution: Policy Plus Agreement.

Create a policy that:

• States clearly that sales contacts, internal or external, are property of the company.
• Applies that rule explicitly to social media accounts (LinkedIn, X, Facebook).
• In some companies, even prohibits employees from connecting with sales leads on personal social accounts, so the question never arises.

And mirror it in employment agreements:

• The same company-property language.
• A non-solicit on leads after departure (recognizing it can be hard to police).
• Confidentiality and assignment language, which is the part that travels best.

The Legal Hook: Treat the List as a Trade Secret.

The strongest protection is to treat your customer and lead list as a trade secret: keep it access-controlled, mark it confidential, and have everyone who touches it under a confidentiality and assignment agreement. Courts have already wrestled with this online: in PhoneDog v. Kravitz, a California court held that a Twitter account and its followers could qualify as a trade secret when an employee left and kept the handle. And under the Defend Trade Secrets Act (18 U.S.C. section 1839), a customer or lead list is protectable only if you took reasonable measures to keep it secret. The enforceability of non-competes and non-solicits varies a great deal by state, and some are now sharply limited, so lean on confidentiality and trade-secret protection, which travels better, and confirm what your state allows before relying on a non-compete. This is the same discipline that decides whether you can stop a departing employee from walking off with your information, and it rests on the same “reasonable measures” standard from the 358-trade-secret-cases survey.

Technology and the law do not line up neatly here, so decide ownership in advance, in writing, rather than fighting about it after a rep resigns and takes the pipeline with them. I hope this helps.

Frequently Asked Questions.

Who owns a LinkedIn connection a rep made on the job? It depends on what you wrote down in advance. With a clear policy and agreement saying business contacts are company property, you have a strong claim; without one, it is a fight.

Can a social media account be a trade secret? A court in PhoneDog v. Kravitz said a Twitter account and its followers could be. Treat business accounts and their contact lists as company assets, with credentials held by the company.

Should I just use a non-compete? Non-competes are limited or banned in a growing number of states. Confidentiality, assignment, and trade-secret protection travel better, so build on those first.

For the foundational frame on the four IP regimes that protect a software business, including the trade secret law that covers customer lists, see Intellectual Property Basics for Software Companies.

Resources:

• Departing Employees Gone Wild.
• Survey of 358 Trade Secret Cases.
• Who Owns Your Company’s Marketing Content?

Disclaimer:

This post is for informational and educational purposes only, and is not legal advice. You should hire an attorney if you need legal advice, which should be provided only after review of all relevant facts and applicable law.