Hey this used to be an easy answer (you owned them and you had possession of them), but these days of LinkedIn, Twitter, Facebook, etc., it is not so simple. Here are some thoughts on this software sales compensation issue.

1) Where are Your Sales Leads Stored (aka who has possession of them)?

Old days = CRM (internal) software and a Rolodex (internal, but portable) (yep, business cards are not dead)

Now = CRM (internal), Rolodex (internal, but portable), and LinkedIn, Twitter, Facebook, etc. (external)

2) Solution?

• Create  a Policy To Address It
  • Clarify that sales contacts, whether stored internally or externally, are the property of the company
  • Clarify that this applies to social media accounts (such as LinkedIn, Twitter, and Facebook)
  • Add other clauses to address this issue the way you want to address it (your company may want to deal with this differently)
    • FYI: some companies even prohibit employees from connecting with sales leads and sales contacts (i.e., they cannot accept invitations) via social media. In other words, the sales reps must reply that they cannot connect. It sounds tough, but it is true.
• Address it in Your Employment Agreements
  • Same as above
  • Also prohibit sales reps from soliciting the leads after they leave (it may be hard to police, though)
  • Non-competes in employment agreements may be more important now, as the worst-case scenario is if a sales rep goes to a competitor with all the leads and sales contacts.

At the end of the day, technology and the law don’t work so well in this situation. The problem now is that getting leads and staying in contact has become an external social process.  This post is not the definitive dissertation on this issue (as this is an evolving issue). Still, I suggest you think about this in advance, as after the fact, you may be dealing with a situation where a sales rep takes or things he/she can take all their leads with them (as they are stored externally).

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Disclaimer: This is not legal advice, and no attorney-client relationship is formed. It is provided for informational or educational purposes only.