Electronic Data Systems Corporation v. Kinder, 73-3511.
| Decision Date | 27 August 1974 |
| Docket Number | No. 73-3511.,73-3511. |
| Citation | 497 F.2d 222 |
| Parties | ELECTRONIC DATA SYSTEMS CORPORATION, Plaintiff-Appellant, v. Frederick A. KINDER, Jr., Defendant-Appellee. |
| Court | U.S. Court of Appeals — Fifth Circuit |
J. Edwin Fleming, E. Eldridge Goins, Jr., Dallas, Tex., for plaintiff-appellant.
William M. Rippey, Royal H. Brin, Jr., Dallas, Tex., for defendant-appellee.
Before BELL, SIMPSON and INGRAHAM, Circuit Judges.
Electronic Data Systems Corporation (EDS) brought this suit, seeking to compel a former employee, Frederick A. Kinder, Jr., to comply with an agreement not to engage in competition with EDS after termination of his employment. Kinder counterclaimed for a bonus of $2500 never paid him and for additional wages. The district court issued an injunction, but only to the extent of enjoining Kinder from soliciting the employees of EDS to work for his present employer, Systems Research, Inc. (SRI). While it denied Kinder's request for relief as to the claimed additional wages, the court concluded that Kinder was entitled to the $2500 bonus. Electronic Data Systems Corp. v. Kinder, 360 F.Supp. 1044 (N.D.Tex., 1973). We affirm.
Since 1962 EDS has performed data processing services, consisting primarily of formulating computer programming systems and feeding information to a computer by way of these systems in order to solve the specific problems of its clients. EDS is plainly a successful data processing firm, for it maintains offices in twenty-two American cities and has clients located throughout our nation. The company attributes its success, at least in part, to the formulation and development of computer programs that are superior to those used by competing data processing firms. These programs, EDS claims, are more efficient than its competitors' programs, resulting in faster services, a reduced backlog of problems to be solved, and lower cost to the client. In order to perpetuate its success, EDS has made substantial efforts to prevent information regarding its superior programming methods from becoming known and used by its competitors. EDS utilizes various means of protecting this information,1 one of which is the inclusion in employment agreements of covenants not to engage in competition. Specifically, the pertinent covenants provide that for three years after termination of employment a former employee of EDS will not engage in the following conduct:
"(i) recruit, hire, assist others in recruiting or hiring, discuss employment with, or refer to others concerning employment, any person who is, or within the then preceding twelve months was, an employee of EDS or any subsidiary or affiliated company, or of any present, prospective or former customer of EDS or any subsidiary or affiliated company, (ii) compete with EDS or any subsidiary or affiliated company within two hundred (200) miles of any city in the United States in which EDS or any subsidiary or affiliated company does business, or (iii) use in competition with EDS or subsidiary or affiliated company customer, prospective customer, or former customer, any of the methods, information or systems developed by EDS or any subsidiary or affiliated company or its customers, prospective customers, or former customers within two hundred (200) miles of any city where such customer, prospective customer, or former customer does business."
After receiving about four years training and experience in data processing while he was in the Marines, defendant Kinder went to work for EDS and signed an employment agreement containing the covenants set out above. While he was employed with EDS, he became familiar with the processing of health care claims and was instrumental, it seems, in the development of a new system for processing such claims. This system, EDS contends, greatly facilitates the processing of health care claims and is a confidential competitive advantage that it maintains over its business rivals.
In the course of his employment with SRI, Kinder has been involved in those affairs of the business concerning health care claims. Located in Kansas City, Missouri, he acted as an intermediary between the Kansas City Blue Shield, a customer of SRI, and the SRI data processing offices in Dallas, Texas. His work...
To continue reading
Request your trial
-
Surgidev Corp. v. Eye Technology, Inc.
...Foam, Inc. v. Scientific Applications, Inc., 479 F.Supp. 1027, 1028 (S.D.N.Y.1979) (secrecy agreements); Electronic Data Systems Corp. v. Kinder, 497 F.2d 222, 223 (5th Cir.1974) (restrictive covenants); Smoke-Enders, Inc. v. Smoke No More, Inc., 184 U.S.P.Q. 309, 312-14 (S.D.Fla.1974) (con......
-
SI Handling Systems, Inc. v. Heisley
...(software a trade secret) with, e.g., Electronic Data Systems Corp. v. Kinder, 360 F.Supp. 1044, 1049 (N.D.Tex.1973), aff'd, 497 F.2d 222 (5th Cir.1974) (not a trade secret). In Pennsylvania, the idea of putting together computer programs to achieve a specific result and the expertise neces......
-
Computer Print Systems, Inc. v. Lewis
...423 U.S. 802, 96 S.Ct. 8, 46 L.Ed.2d 244 (1975); Electronic Data Systems Corp. v. Kinder, 360 F.Supp. 1044 (N.D.Tex.1973), aff'd., 497 F.2d 222 (5th Cir. 1974); Com-Share, v. Computer Complex, Inc., 338 F.Supp. 1229 (E.D.Mich.1971), aff'd., 458 F.2d 1341 (6th Cir. 1972). Second, they challe......
-
Nat. Organization for Women v. Mutual of Omaha Ins.
...Co., 287 F.2d 252, 253-54 (5th Cir.1961); Electronic Data Systems Corp. v. Kinder, 360 F.Supp. 1044, 1047 (N.D.Tex.1973), aff'd, 497 F.2d 222 (5th Cir. 1974); 1A J. Moore, Moore's Federal Practice ¶ 0.1576, at 131 (2d ed. 1985). Further, contrary to defendant's assertion at oral argument, a......
-
Chapter 8-3 Specific Performance
...S.W.2d 724, 731 (Tex. Civ. App.— Tyler 1972).[79] Electronic Data Sys. Corp. v. Kinder, 360 F. Supp. 1044, 1051 (N.D. Tex. 1973), aff'd 497 F.2d 222 (enforcing non-compete provision); McCormick v. Hines, 498 S.W.2d 58, 64 (Tex. Civ. App.—Amarillo 1973, writ dism'd) (enforcing written agreem......