Hermalyn and DraftKings clash hits Court of Appeals

US First Circuit Court of Appeals
Image: Shutterstock / Jay Yuan

Former Head of VIP for DraftKings Mike Hermalyn is pushing back at a recent court ruling granting the sportsbook giant a preliminary injunction limiting the scope of Hermalyn’s employment with Fanatics.

Hermalyn’s attorneys filed the appeal in the First Circuit Court and requested the reversal of the temporary injunction prohibiting Hermalyn from soliciting past customers and employees he worked with at DraftKings or sharing any confidential information obtained while with his former employer.

The grounds of the appeal are rooted in jurisdictional issues. The brief argued that Massachusetts District Court Judge Julie A. Kobik’s determination that Massachusetts was the proper venue for the case was legally erroneous and reiterated Hermalyn’s stance that California, where he now resides, is the more appropriate venue for the case.

DraftKings is based in Massachusetts but Hermalyn resided in New Jersey while he worked for them. He also relocated to California in the 48 hours prior to accepting the position with Fanatics. Therefore, his argument is that California, a state that is notoriously more employee-friendly when it comes to non-compete agreements, is the more appropriate venue.

Additionally, the appeal brief argued that the scope of the preliminary injunction should exclude California from enforcement. As the brief noted, “the district court erred by declining to narrow the geographic scope of the resulting provisions of the preliminary injunction to exclude California in light of its law and public policy barring the enforcement of such covenants against California employees of California companies working in California.”

In the meantime, the case proceeds at the district level even though the challenge to the temporary injunction is at the appellate court level.