A Massachusetts federal court issued a temporary restraining order against a former DraftKings senior vice president, Michael Hermalyn, barring him from competing with the company anywhere in the United States for one year. This ruling enforced his non-compete agreement, which was governed by Massachusetts law, despite his relocation to California.
The First Circuit Court of Appeals affirmed the preliminary injunction, rejecting Hermalyn's argument that California's public policy against non-competes should apply. The court determined that California's interest in the dispute was not 'materially greater' than Massachusetts' interest in enforcing the clear and unambiguous agreement.
This legal victory is important for DraftKings as it reinforces the enforceability of its restrictive covenants, helping to safeguard proprietary information and customer relationships. The decision provides clarity on the application of state non-compete laws, particularly in cases involving employees moving to states with different legal frameworks.
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