The first hearing on the evidence behind a DraftKings request for a preliminary injunction against its former head of VIP will take place in two weeks.
The request for the injunction, as well as Michael Hermalyn‘s request to dismiss, will start with an evidentiary hearing at 9 am April 16, the District Court of Massachusetts decided Tuesday. There will be no new witnesses or evidence introduced at the hearing.
Both sides can submit positions on an appropriate bond by April 9. The responses are limited to five pages, an important distinction in a case that has broken down into arguments over document length and formatting.
Hermalyn and DraftKings are at odds after Hermalyn abruptly left his role in DraftKings’ VIP department for one with Fanatics during the week of the Super Bowl. That goes against the non-competes he signed while with DraftKings, though Hermalyn contests those no longer matter as he now lives in California, which voids non-compete agreements for its residents.
Hermalyn again states California case
This issue is a “localized controversy,” Hermalyn and his attorneys said in their reply to DraftKings’ opposition to the dismissal motion.
The case involves a California resident and a California employee, while most of the allegations are based on conduct that allegedly took place in California, the reply argues.
That is why the case should be dismissed for forum non conveniens in the District Court of Massachusetts and allowed to continue at the state level in California, Hermalyn said.
The reply notes that courts in Massachusetts and elsewhere have “accordingly transferred or dismissed restrictive covenant cases in favor of adjudication in California, despite forum selection clauses selecting a non-California forum.”
DraftKings remains confident in case
DraftKings’ reply in support of the motion for preliminary injunction says it is likely to succeed on breach of non-compete obligations.
The cases cited by Hermalyn and his lawyers do not identify “any case applying California law to a restrictive covenant between a non-California company and an employee who never lived in California until (at best) the eve of litigation – a result that would be ‘unfair’ and allow California to dictate restrictive covenant law for the entire nation,” counsel for DraftKings wrote.
The company is also likely to succeed on its trade secrets claims, the reply argues. Hermalyn cannot dispute that he accessed documents prior to quitting that “provide a blueprint for recreating DK’s VIP program.”
Hermalyn’s “only substantive response,” that strategic plans for the Super Bowl are no longer trade secrets because the event is over, is “ridiculous,” the filing states.
