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The US Court of Appeals has heard arguments considering whether California or Massachusetts law should apply in the lawsuit between DraftKings and its former head of VIP.

Fanatics’ president, VIP Michael Hermalyn (pictured) sued his former employer DraftKings in February in an attempt to void his “illegal” non-compete.

DraftKings, which is based in Massachusetts, countersued Hermalyn in federal court there in an attempt to enforce non-compete agreements, after he left to join Fanatics in California.

The district court granted a preliminary injunction under Massachusetts law in April, finding that Hermalyn likely misappropriated confidential information and breached his agreements.

Hermalyn appealed, arguing that California law, which voids most non-compete agreements, should apply.

His lawyers argued California has a “materially greater interest” in the case and that its law would apply despite the contract’s choice of Massachusetts law.

Meanwhile, DraftKings argued the district court had correctly applied Massachusetts law, citing Hermalyn’s repeated agreement to Massachusetts choice-of-law provisions in exchange for millions in compensation.

The company said Massachusetts has the most significant connections to the dispute, as the ex-VIP head frequently travelled there for work and allegedly solicited Massachusetts-based employees.

DraftKings dismissed Hermalyn’s California connections as minimal and strategically manufactured to evade contractual obligations.

The company argues that even without the choice-of-law provisions, Massachusetts law would still govern under the “most significant relationship” test established in First Circuit precedent.

DraftKings rejects Hermalyn’s alternative proposal to exclude California from the injunction, arguing this would effectively nullify it due to the nationwide nature of its business.

Even if Massachusetts law applies, Hermalyn argued the injunction should exclude California based on principles of comity and federalism.

Hermalyn goes for Robins in recent filing

The increasingly acrimonious case has seen Hermalyn, Fanatics and DraftKings engage in a war of words both inside and outside court filings.

In a recent filing, DraftKings attempted to strike from the record “immaterial, impertinent, and scandalous” accusations from one of Hermalyn’s briefs.

Within, Hermalyn had accused DraftKings CEO Jason Robins of being part of a concerted campaign to ruin him.

DraftKings said: “Defendant’s opening five pages of vitriolic and hyperbolic attorney argument are inappropriate and unnecessary in their entirety.”

Hermalyn’s attorneys replied: “[DraftKings] seeks through this lawsuit to throttle legitimate competition by targeting Defendant Michael Z. Hermalyn, its former employee and new employee of upstart competitor Fanatics.”

He also alleged that Robins was “deeply wounded” by Hermalyn’s departure to Fanatics, and that he had a history of retaliating against departing employees.

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