Panini America Battles Fanatics' Employee Hiring Spree; Judge Rules Fanatics May Continue Hiring
Panini America has taken legal action against Fanatics in response to the recent hiring of numerous former Panini employees. However, a judge ruled on Monday that Fanatics can continue hiring them, as long as the former employees do not attempt to recruit their former Panini colleagues.
Last week, Panini filed a lawsuit in Texas District Court, seeking a temporary restraining order to stop Fanatics from hiring more Panini employees. On Monday, the judge ordered the seven employees named in the lawsuit to return any Panini property or documents that could potentially violate trade secrets. The judge also prohibited them from trying to persuade their former colleagues to join Fanatics. However, Fanatics is not barred from hiring additional employees, provided the defendants comply with the court order.
In addition, the judge ordered former Panini employees Nick Matijevich Jr., Carlos Torrez, David Sharp, Brian Bayne, Alexander Carbajal, Joseph Reyes, and Elizabeth Galaviz to preserve all electronic records and emails related to their employment with Panini or Fanatics, any business activities for Fanatics, and any contact they have had with clients, athletes, or agents since April 4th. A hearing is scheduled for May 1st.
The judge determined that "there is a reasonable probability that unless Defendants are immediately restrained and ordered as set forth below, harm to Plaintiff (Panini America) is imminent and Plaintiff will be irreparably injured."
According to the lawsuit, 34 Panini employees left the company within a single week, all announcing their new positions at Fanatics in similar roles. These employees were involved in product development, licensing, athlete relations, production, and brand management.
Panini alleges that these departures were "coordinated, unlawful, done in tandem with Fanatics, and calculated to inflict the most harm on Panini." The company further claims that the seven employees named in the suit, who left between April 4 and 6, all declined to sign exit agreements. Panini contends that these new Fanatics employees will "necessarily use confidential information and trade secrets they learned at Panini to perform their jobs on behalf of Fanatics."
Panini asserts that the information obtained by the former employees during their tenure with the company is protected as trade secrets under the Texas Uniform Trade Secrets Act. This information includes details about card production, materials, design, distribution, pricing models, and other employee-related data.
In the initial court filing, Panini accused former employees of breaching contracts with the company by recruiting, soliciting, or hiring other Panini employees.
In 2021, Fanatics secured a deal to acquire the NBA and NFL trading card licenses currently held by Panini. The company seems to be accelerating its plans by hiring numerous former Panini employees.