Sunday, December 1, 2013

Data Management, Inc. v. Greene case brief

Data Management, Inc. v. Greene case brief summary
757 P.2d 62 (1988)

Appellant sought review of an order of the Superior Court of the State of Alaska, Fourth Judicial District, Fairbanks, granting summary judgment in favor of appellees in suit for violation of a covenant not to compete.

Appellant employed appellees. The parties signed a contract containing a covenant not to compete. The covenant provided that appellees would not compete with appellant in Alaska for five years after termination. Appellant filed suit against them for breach of the covenant not to compete. Appellant attained a preliminary injunction enjoining employees from rendering computing services to twenty-one named individuals. Subsequently, the trial court granted summary judgment to appellees finding that the anti-competition covenant was not severable and was wholly unenforceable.


  • The supreme court adopted the rule of reasonableness for determining the enforceability of a covenant not to compete. 
  • This rule contained a good faith element on the part of the employer to prevent overreaching. 
  • Accordingly, the supreme court reversed and remanded for a determination of whether appellant acted in good faith, and if so, whether the covenant not to compete can be reasonably altered.

Summary judgment order reversed and remanded; trial court failed to determine whether appellant acted in good faith in drafting the overbroad covenant not to compete, without which finding the trial court could not determine whether covenant could be reasonably altered or amended.

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