social media policy

Who owns your Twitter followers, you or your employer?

December 13, 2012: 12:08 PM ET

A lawsuit that raised this issue has been settled out of court, leaving a couple of questions unanswered.

FORTUNE -- Around this time last year, you may recall, the blogosphere was buzzing over the curious case of PhoneDog LLC v. Kravitz. The mobile device and app review site sued former employee Noah Kravitz in federal court, claiming that, when Kravitz quit and took 17,000 Twitter followers with him, he was in effect stealing a client list. According to PhoneDog's calculations, each follower was worth $2.50 per month over the 18 months Kravitz tweeted on the company's behalf. So, the lawsuit said, Kravitz owed his erstwhile employer $340,000.

The case got lots of attention for a couple of reasons. First, a vast and vocal online peanut gallery of observers -- from tech blogs to law firm websites -- expected the suit's outcome to establish legal boundary lines, currently hazy, between employees' personal use of social media and employers' claim to those channels of communication.

Courts have long held that client lists, built up over time on a company's good name and using its resources, are company property. But do Twitter followers -- or LinkedIn (LNKD) contacts, or certain kinds of Facebook (FB) friends -- meet the same standard? And second, what is a Twitter follower worth? Would the court buy PhoneDog's estimate of $2.50 per follower per month, or would some other valuation apply?

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Alas, anyone hoping for answers will have to wait for another lawsuit. PhoneDog and Kravitz have settled out of court, and the only detail either side is willing to reveal is that Kravitz "will maintain sole custody of the @noahkravitz Twitter account." Says Cary Kletter, head of Silicon Valley firm Kletter Law and Kravitz's co-counsel, "No new law was created here. There was no precedent-setting opinion."

Still, that's not to say PhoneDog LLC v. Kravitz has nothing to offer. For one thing, the hubbub over the case may have prompted more companies to write up specific policies about social media use at work. The number of employers with such policies has climbed to 69% from 55% last year, according to research by law firm Proskauer. "Well-drafted social media policies will obviously benefit employers, but they will also benefit employees by clarifying acceptable use and ownership of content," Cary Kletter said in a written statement about the settlement.

Meanwhile, if you're hoping to avoid being sued when you change jobs and take your social media contacts with you, Kletter added in an interview, "You need to make sure you understand the company's policy before you start using social media or, if there is no formal policy, work out an agreement in writing beforehand. Don't wait until the employment relationship is ending to figure out who owns what."

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