A former DraftKings Inc. executive, Michael Hermalyn, has appealed a Massachusetts federal judge’s decision to enforce a noncompete agreement preventing him from joining rival Fanatics. Hermalyn argues that the judge should have applied California law, which is more favorable to workers and generally does not enforce noncompete clauses, instead of Massachusetts law.
Hermalyn, who led a unit focused on high-value VIP customers at DraftKings, was set to take a similar role at Fanatics in Los Angeles. He claims the lower court erred in using Massachusetts law as stipulated in his contracts, instead of considering California’s strong policy against noncompetes.
In February, Hermalyn and DraftKings filed lawsuits against each other, with Hermalyn seeking to invalidate his noncompete agreement under California law, and DraftKings suing in Boston to enforce the contract terms. The district court granted DraftKings a preliminary injunction, halting Hermalyn’s move to Fanatics.
Hermalyn argues that U.S. District Judge Julia Kobick improperly applied Massachusetts choice-of-law rules by undervaluing California’s interest in protecting employees and overemphasizing Massachusetts’ interest. He asserts that the application of Massachusetts law undermines California’s public policy, which seeks to ensure the free movement of workers.
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