July 22 (Reuters) - A federal appeals court on Monday

appeared likely to reject a former DraftKings

executive's bid to overturn an injunction that severely

restricts the type of work he can do after he joined sports

betting rival Fanatics.

Christopher Michel, Michael Hermalyn's lawyer, told a

three-judge panel of the Boston-based 1st U.S. Circuit Court of

Appeals that his client's non-compete agreement with DraftKings

was clearly unenforceable in his new home state of California.

Yet judges on the panel appeared skeptical of Michel's

contention that California's broad prohibition on non-competes

warranted applying that state's laws instead of Massachusetts'

to the dispute.

"What's your litmus test or scale here for saying that

California's interest in not enforcing non-competes clauses is

deeper or higher or more significant than Massachusetts'

interest in enforcing these clauses in certain well-defined

circumstances?" asked U.S. Circuit Judge William Kayatta.

Thomas Dupree, a lawyer for Boston-based DraftKings, said

California's interest in the case was slim compared to that of

Massachusetts, where the company was based when Hermalyn worked

for the company and where the agreement was executed.

He called the dispute a "paradigmatic case for why

Massachusetts businesses need protection from this sort of

thing," saying Hermalyn had stolen key trade secrets from

DraftKings when he decided to move to California and join its

rival.

"What happened here was egregious," he said.

Fanatics, best known for selling sports jerseys and

merchandise, launched its sportsbook last year. DraftKings has

sought to block Hermalyn, who oversaw its relationships with its

largest VIP customers, from working there.

In April, DraftKings secured the injunction from U.S.

District Judge Julia Kobick in Boston restricting Hermalyn's

work at Fanatics after filing a lawsuit accusing him of

violating his non-compete and non-solicitation agreements and of

misappropriating trade secrets before joining Fanatics.

Hermalyn, who moved to California prior to joining Fanatics

on Feb. 1 as the president of its VIP program, denies stealing

trade secrets and has filed a separate lawsuit challenging the

non-compete agreement in California.

Just last week, Los Angeles Superior Court Judge Tony

Richardson in that case concluded that Hermalyn was likely to

prevail on the merits of his case under California law.

But he declined to issue a preliminary injunction, saying

doing so would effectively enjoin the Massachusetts lawsuit

itself.

Senior U.S. Circuit Judge O. Rogeriee Thompson during

Monday's arguments acknowledged that litigation as showing

"California thinks it has a role in the case." But she said it

was "still not clear to me why California's policy concerns have

greater import than Massachusetts.'"

The case is DraftKings Inc ( DKNG ) v. Hermalyn, 1st U.S. Circuit

Court of Appeals, No. 24-1443.

For DraftKings: Thomas Dupree of Gibson Dunn & Crutcher

For Hermalyn: Christopher Michel of Quinn Emanuel Urquhart &

Sullivan

Read more:

Ex-DraftKings executive appeals restrictions on work at

Fanatics

Ex-DraftKings exec denies accessing trade secrets before

Fanatics job jump

DraftKings trade-secret case is 'character assassination,'

Fanatics exec says

Ex-DraftKings exec can work at Fanatics, can't solicit

clients during Super Bowl: judge

DraftKings sues former executive for taking secrets to

sports-betting rival

(Reporting by Nate Raymond in Boston)