Alaska non-compete law: Data Management v. Greene and the good-faith rewrite

Alaska has no statute on employee non-competes, so the Alaska Supreme Court's 1988 decision in Data Management, Inc. v. Greene supplies the rule. Courts weigh reasonableness factors such as time and area limits, whether the employee was the customer's sole contact, access to confidential information, and whether the covenant blocks only ordinary competition. If an overbroad covenant can be reasonably altered to make it enforceable, the court "shall do so" unless the covenant was not drafted in good faith, and the employer must prove good faith. As of October 2026 no non-compete bill appears among the 34th Legislature's bill titles, and the federal FTC rule is not in effect.

For a recruiter, that means an Alaska candidate's covenant that looks wildly overbroad may still bind them in a narrower form. The general screen is in non-compete questions for candidates, and the agency-side clauses are in non-solicitation clauses for recruiters.

Does Alaska have a non-compete statute?

No. Alaska has no salary threshold, notice period, health care carve-out or list of banned occupations for non-competes. Employee covenants are judged under case law, and the leading case is Data Management, Inc. v. Greene, 757 P.2d 62, decided by the Alaska Supreme Court on July 1, 1988 (No. S-2333).

The facts are typical of the problem. Two employees signed a covenant not to compete with Data Management "in Alaska for five years after termination." After they left, the company won a preliminary injunction barring them from providing computing services to 21 named individuals. The trial court then granted summary judgment to the employees, finding that the covenant "was not severable and was wholly unenforceable." The Supreme Court rejected that all-or-nothing approach and sent the case back.

What test do Alaska courts use?

The Court adopted the reasonableness factors set out by the Ohio Supreme Court in Raimonde v. Van Vlerah (1975). Among the factors "properly to be considered" are:

• the absence or presence of limitations as to time and space;
• whether the employee represents the sole contact with the customer;
• whether the employee has confidential information or trade secrets;
• whether the covenant seeks to eliminate competition that would be unfair to the employer, or merely ordinary competition;
• whether it seeks to stifle the inherent skill and experience of the employee;
• whether the benefit to the employer is disproportional to the detriment to the employee;
• whether it bars the employee's sole means of support;
• whether the talent the employer seeks to suppress was actually developed during the employment; and
• whether the forbidden employment is merely incidental to the main employment.

No single factor decides a case. For a recruiter, the factors are a list of facts worth collecting: who owned the customer relationship, what the candidate knows that is not public, and whether the new role uses skills they brought with them.

Will an Alaska court rewrite an overbroad covenant?

Yes, unless the employer drafted it in bad faith. The Court described three approaches. It rejected the all-or-nothing rule, under which an overbroad covenant is simply void, as "too mechanistic." It rejected the blue pencil rule, under which a court may only delete words, because the difference between covenants it can and cannot save "is merely semantic." It adopted the third:

"If an overbroad covenant not to compete can be reasonably altered to render it enforceable, then the court shall do so unless it determines the covenant was not drafted in good faith. The burden of proving that the covenant was drafted in good faith is on the employer."

The Court answered the obvious objection, that this encourages employers to overreach, by "stressing the good faith element of the test": the trial court "must determine whether an employer has overreached willfully and, if so, the court should refuse to alter the covenant." It remanded the case for the trial court to decide whether Data Management acted in good faith and, if so, whether the covenant could be reasonably altered.

Example only: an Anchorage field technician signed a three-year, statewide covenant. A court might find that the employer had a real interest in the customers the technician served in Southcentral Alaska and rewrite the covenant to one year and those customers. If instead the court found the employer had overreached willfully, for instance by using the same sweeping clause for hourly workers with no customer contact, it should refuse to rewrite it and the covenant would fail. Which way a case goes depends on evidence the recruiter will never see, so record facts and pass them on.

Are physicians and other licensed workers treated differently in Alaska?

Not by statute. Physicians, dentists, nurses and other licensed professionals are judged under the same factors. Two of them speak directly to a clinician's practice: whether the employee was the sole contact with the customer (here, patients and referral sources) and whether the talent was developed during the employment. Capture the license, the radius, the duration and how the candidate's patient base was built.

Alaska non-compete rules at a glance

What should a recruiter ask an Alaska candidate?

Ask early in the phone screen, the same way for every candidate for the role. An Alaska candidate may work for an employer headquartered in another state, so the governing-law question can matter as much as the clause.

ALASKA CANDIDATE — restrictive agreements

1. "Have you signed a non-compete, a customer or employee non-solicit,
    or a confidentiality agreement with your current or a past employer?"
2. "How long does it last, and what area, customers or type of work
    does it cover?"
3. "Were you the main contact for any customers, and did any of those
    relationships exist before you joined?"
4. "Did your employer train you in skills you didn't have before?"
5. "Did everyone in your role sign the same agreement?"
6. "Does it say which state's law applies, or where disputes go?"
Always: "We don't want any confidential information, documents or
client lists from your current employer."

• Do not tell a candidate "that's too broad to hold up in Alaska." Alaska courts rewrite overbroad covenants drafted in good faith.
• Do not ask for confidential documents or a detailed account of the employer's customers.
• Do record "five-year statewide covenant, signed at hire, same form for all technicians" rather than an opinion.

What is the risk to the hiring company?

Because an Alaska court is directed to narrow and enforce a covenant drafted in good faith, the realistic outcome of a dispute is an injunction keeping the new hire away from certain customers, territory or work for a period. In Data Management the preliminary injunction covered 21 named individuals. Former employers sometimes also sue the new employer, for example alleging interference with the contract or misuse of confidential information; how that plays out depends on what the new employer knew and did, which is for its counsel.

Lower the risk by telling the client about the covenant before final interviews, letting counsel review it before the offer, scoping the first months of the role away from restricted customers where possible, and repeating at the offer call that the company wants no confidential information.

Is Alaska changing its non-compete law?

Not on the current record. As of October 2026, the bill list for the 34th Alaska Legislature (2025 to 2026) includes no bill whose title addresses non-competes or covenants not to compete. Re-check when the 35th Legislature convenes in 2027.

Where does the federal FTC rule stand?

It does not apply. The FTC's Noncompete Rule page says the rule "is not in effect and it is not enforceable" and notes the August 20, 2024 court order; the Commission voted on September 5, 2025 to dismiss its appeals and accept the vacatur; and a February 12, 2026 notice removed it from the Code of Federal Regulations. Alaska covenants are governed by Alaska law, or by the law the agreement validly chooses.

Staffing agencies and their own agreements

Data Management is a drafting lesson for agencies as employers. A covenant your recruiters sign that is tied to the clients they actually served, for a defined period, is easier to defend as drafted in good faith than a statewide, multi-year form used for everyone. Client-side no-hire terms are a separate issue; see no-poach agreements and antitrust law.

If a candidate's agreement names Washington law, or the role is with a Washington employer, Washington's own statute may apply; see Washington non-compete law. For the other Alaska rules on a hire, see hiring employees in Alaska, the Alaska staffing agency license guide and Alaska background check laws.

An Alaska checklist

• Restrictive-agreement question asked of every candidate, in the same words.
• Facts recorded: duration, area, customers, signing date, governing-law clause.
• Customer origin, training and whether the form was used for everyone captured for counsel.
• No assumption that an overbroad covenant is void.
• Health care roles: license, radius, duration and patient base recorded.
• Client told before final interviews; counsel reviews before the offer.