For now, at least, Panini America’s lawsuit against seven former employees and Fanatics is on hold.
Panini and Fanatics agreed to a joint motion to enter a temporary restraining order (TRO) on May 25, which will remain in place until a trial begins. That court date has been set — April 8, 2024.
The order, filed in the District Court of Dallas County, Texas, 4th Judicial District Court, is the latest turn in a case involving the Dallas-based card and memorabilia company against Fanatics SPV and former Panini employees Eli Nicholas Matijevich Jr., Carlos Torrez, David Sharp, Brian Bayne, Alexander Carbajal, Joseph Reyes and Elizabeth Galaviz.
Judge Ronald B. Hurdle ordered that the former Panini employees listed as defendants in the case could not use or disclose confidential information and were required to preserve evidence in the case. They also were instructed not to delete or alter any electronic records, including emails, which might relate to their employment with Panini or Fanatics. According to the TRO, that includes any business activities for Fanatics since they were hired, and any contact they might have had with clients, athletes or agents since April 4.
The case originally was supposed to go to court on May 24, but both parties agreed to the temporary restraining order two days before the trial was scheduled to begin.
In its original lawsuit, also filed in Texas, Panini claimed that Fanatics hired its top employees in an effort to obtain inside information or trade secrets. Panini argued that such a practice violates the Texas Uniform Trade Secrets Act.
Texas enacted the law on Sept. 1, 2013, joining 46 other states that were governed by some form of the national Uniform Trade Secrets Act (UTSA).
To clarify, UTSA defines a “trade secret” as information — actual or potential — with monetary value. It is also the subject of efforts “that are reasonable under the circumstances” to maintain its secrecy.
That definition also applies to the Texas Uniform Trades Secrets Act.
In the original lawsuit, 34 employees left Panini in a week and were hired by Fanatics in the same or in similar roles. Those jobs were in the areas of product development, licensing, athlete relations, production and brand management.
Panini claimed that the employees’ exits, which occurred between April 4 and April 6 this year, were “coordinated, unlawful, done in tandem with Fanatics, and calculated to inflict the most harm on Panini.” Panini also claimed that the departing employees refused to sign exit agreements.
The company added that the newly hired Fanatics employees would be “necessarily using confidential information and trade secrets they learned at Panini to perform their jobs on behalf of Fanatics.”
Fanatics has shaken up the trading card and memorabilia industry with its high-profile acquisitions over the past two years.
In 2021, Fanatics completed a deal to eventually acquire the NBA and NFLPA licenses now held by Panini. They also secured the baseball card license held by Topps.
Fanatics then acquired Topps in January 2022 in a deal believed to be worth “roughly” $500 million. Two months later, Fanatics cut a deal with the WWE that will see the e-commerce company producing pro wrestling cards after Panini’s deal expires. Fanatics swooped five months after Panini had wrested the license to produce wrestling cards from Topps.
And last week, Fanatics entered the auction arena by announcing the purchase of Oregon-based PWCC Marketplace.
While Fanatics’ new influence and lightning-strike acquisitions have had a steamroller effect, Panini was happy with the TRO reached by both parties last week.
“We are pleased with the agreed temporary injunction signed by the court, which importantly protects Panini America’s highly valuable confidential information and trade secrets,” Charles E. Phipps, an attorney for Panini America, said in a statement. “In protecting these rights, the temporary injunction prevents the wrongful use of Panini’s confidential information and trade secrets by Fanatics and individuals named in the litigation.
“Panini will continue to enforce its rights and pursue all appropriate protections and remedies under the law.”
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