Panini America is fighting back against Fanatics’ recent pillage of its employees but a judge ruled Monday that unless those former workers try to recruit their Panini colleagues, Fanatics can continue hiring them if it wants to.
The company filed suit in Texas District Court late last week, seeking a temporary restraining order that would have put a halt to Fanatics hiring more Panini employees. On Monday, a judge ordered the seven employees named in the suit to turn over any Panini property or documents they have that might violate trade secrets and ordered them not to try and entice their former co-workers to Fanatics. However, the judge ruled there’s nothing preventing Fanatics from hiring additional employees as long as those defendants comply with the court order.
The judge’s ruling also ordered former Panini employees Nick Matijevich Jr., Carlos Torrez, David Sharp, Brian Bayne, Alexander Carbajal, Joseph Reyes and Elizabeth Galaviz not to delete or alter any electronic or records, including emails, that relate to their employment with either Panini or Fanatics, any business activities they’ve been engaged with for Fanatics so far and any contact they’ve had with clients, athletes or agents since April 4. A hearing in the case was scheduled for May 24.
The judge in the case ruled Monday 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 Panini in the span of a single week, all announcing they had joined Fanatics in the same or similar roles. They included those in product development, licensing, athlete relations, production and brand management.
In the suit, Panini claims those departures were “coordinated, unlawful, done in tandem with Fanatics, and calculated to inflict the most harm on Panini.” They say the seven employees named in the suit all left between April 4 and 6 and all refused to sign exit agreements. Panini claims the new Fanatics employees will be “necessarily using confidential information and trade secrets they learned at Panini to perform their jobs on behalf of Fanatics.”
The company says information received by the former employees during their time with the company is “entitled to protection as trade secrets under the Texas Uniform Trade Secrets Act.” They cited information regarding the number of cards printed, ratios of base cards to non-base cards produced, materials and components of the cards, design, production and distribution schedules, Panini’s distribution network, pricing models and information on other Panini employees including “relative strengths and weaknesses, compensation and preferences.”
In its original court filing, Panini accuses former employees with breaching contracts they had with Panini by “directly or indirectly recruiting, soliciting or hiring” other Panini employees.
In 2021, Fanatics completed a deal to eventually acquire both the NBA and NFL trading card licenses now held by Panini, but appears to be applying a strategy to speed up the timeline.
The company recently showed off the conceptual design of a new office it says it will build in Dallas.