BOSTON, Sept 26 (Reuters) - A federal appeals court on

Thursday rejected a former DraftKings executive's bid

to overturn an injunction that severely restricts the type of

work he can do now that he has joined its sports betting rival

Fanatics.

The Boston-based 1st U.S. Circuit Court of Appeals rejected

Michael Hermalyn's bid to have California law applied to the

dispute over his non-compete agreement with DraftKings, which

would have rendered it unenforceable, and instead held

Massachusetts law governed.

"Massachusetts and California aren't exactly on the same

page when it comes to non-compete agreements," Senior U.S.

Circuit Judge O. Rogeriee Thompson acknowledged in her opinion

for the three-judge panel.

She noted that Massachusetts, where DraftKings is based,

generally allows non-competes for higher-level employees like

Hermalyn, while California, where he now lives, largely bans

such agreements unless they fit within a few narrow exceptions.

Given that backdrop and the facts of the case, "we can't say

that Hermalyn has shown (as he was required to do) that

California's 'interest' in pursuing its policy is not just

'greater' than Massachusetts's, but is 'materially' so,"

Thompson wrote.

Lawyers for Hermalyn did not immediately respond to requests

for comment, nor did DraftKings. A spokesperson for Fanatics

declined to comment.

DraftKings sued Hermalyn, its senior vice president of

growth, after he moved to California and resigned on Feb. 1

ahead of the Super Bowl to join Fanatics, a company best known

for selling sports jerseys and merchandise that last year

launched its own sportsbook.

DraftKings sought to block Hermalyn, who oversaw its

relationships with its largest VIP customers, from working for

Fanatics, which had hired him to help build out its own nascent

team catering to VIP clients.

DraftKings accused him of violating his non-compete and

non-solicitation agreements and alleged he misappropriated trade

secrets before joining Fanatics and tried to poach some of its

employees.

It secured a preliminary injunction in April from U.S.

District Judge Julia Kobick in Boston that severely restricted

the work he could do at Fanatics but that stopped short of

barring him from working at the company.

She cited evidence that Hermalyn in the days before

resigning from DraftKings used unauthorized means to transfer

DraftKings documents to himself and accessed some while staying

at the Los Angeles home of Fanatics CEO Michael Rubin.

The judge enjoined him for a 12-month time period starting

when he began his new job on Feb. 1 from providing services

relating to any aspects of DraftKings' ( DKNG ) business that he was

involved in or for which he had received confidential

information.

Hermalyn denies stealing trade secrets and filed a separate

lawsuit challenging the non-compete agreement in California.

He has argued that California law should apply because not

only does he live there now but also because that's where the

Fanatics subsidiary he heads is based, giving the state a

greater interest in the matter.

A week before the 1st Circuit heard arguments in the case, a

California state court judge concluded that Hermalyn was likely

to prevail on the merits of his case under California law. But

the judge declined to issue a preliminary injunction, citing the

Massachusetts lawsuit.

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)