A Californian court has sided with Michael Hermalyn in its non-compete dispute with DraftKings, stating he has “become a California resident”.
A Californian court has sided with Michael Hermalyn in his non-compete dispute with DraftKings, stating he has “become a California resident”.
The Los Angeles Superior Court denied DraftKings’ motion to quash service, ruling that DraftKings is subject to jurisdiction in California.
Hermalyn, Fanatics president of VIP, is fighting a complex non-compete case with his former employer where he worked from 2020 to 2024.
The California court also dismissed Hermalyn’s attempt to get an injunction to stop DraftKings enforcing the non-compete provisions in the contract.
California court says Hermalyn likely to succeed on merits
In doing so, the court said Hermalyn was “likely to prevail on the merits of this case” but refused to support the motion due to fears that would enjoin the proceeds in the Massachusetts case.
The executive’s third motion was to receive an expedited trial to prevent the issue of whether the one-year employment restrictions apply from being mooted.
The court agreed and set the trial date for 27 August 2024.
In a letter sent to the Court of Appeals, DraftKings argued the rulings were not relevant to the case.
DraftKings’ attorneys said: “The California state court’s legally erroneous decision that it has personal jurisdiction over DraftKings has no bearing on the choice-of-law question before this court — and DraftKings will appeal that ruling on Monday in any event.
“And the California court’s tentative rulings denying Hermalyn’s motion for a preliminary injunction and setting a trial date are even less relevant.
“The only portion of those orders remotely relevant to this appeal is the California court’s finding that ‘the totality of circumstances does not suggest Hermalyn has abandoned his planned relocation to Los Angeles to work for Fanatics.’
“In other words, it is not clear even now whether Hermalyn is a California resident, further confirming that California has no meaningful connection to this suit — and certainly no greater interest than Massachusetts.”
The case background
The executive first sued DraftKings in February to void the business’ “illegal” non-compete, having previously worked as the operator’s senior vice president of growth.
In a countersuit, DraftKings accused Hermalyn of stealing trade secrets and soliciting its employees.
The operator successfully requested a temporary injunction from a Massachusetts court in May, which severely limited the services Hermalyn could provide to his new employer.
The Fanatics executive subsequently appealed to the verdict and has accused DraftKings CEO Jason Robins of being part of a concerted campaign to ruin him in filings.