The Massachusetts District Court has granted a preliminary injunction to online gaming company DraftKings against Mike Hermalyn, a previous executive alleged to have shared proprietary information with their rival firm, Fanatics. Hermalyn, who had acted as vice-president of VIP at DraftKings, and currently serves as president of VIP at Fanatics, will encounter limitations on his role at the latter firm.
This Decree Introduces the Latest Development in a Continuing Legal Conflict
The lawsuit originated from claims that Hermalyn had secretly met with the executive team of Fanatics early in 2023 discussing potential job opportunities. Further accusations allege he urged his team members to transfer to Fanatics and acquired DraftKings’ private business strategy for the Super Bowl while visiting the Fanatics office in California.
Despite his current employment with Fanatics, the injunction prevents Hermalyn from undertaking any tasks connected to his former post at DraftKings where he managed the integration and coordination of high-priority players. Judge Julia E. Kobick ruled that Hermalyn is barred from rendering services to Fanatics regarding any portion of DraftKings’ operations where he gained restrictive information within the six months leading up to 1 February 2024.
The court’s judgment also struck down Hermalyn’s plea to discharge or halt the litigation initiated against him. This verdict adheres to a previous temporary cease and desist order granted against Hermalyn in February. Following this, DraftKings submitted a fresh application suggesting that Hermalyn pilfered confidential company data and enticed DraftKings personnel.
Hermalyn Continues His Professional Commitments at Fanatics
DraftKings greeted the court’s decision as a further triumph in their objective to make Hermalyn answerable for attempting to mirror DraftKings’ successful VIP program. The company has depicted Hermalyn’s actions as a bold attempt to poach employees and business secrets. Furthermore, DraftKings argues that Hermalyn violated his non-compete clause, adding more complexity to the lawsuit.
As a reaction, a representative for Fanatics expressed dissatisfaction with certain points of the court’s decree but did acknowledge that efforts by DraftKings to bar Hermalyn from employment at Fanatics were rejected. Fanatics deemed the episode as a “lowly attempt at small-scale vengeance” as they accused DraftKings of perpetuating a pervasive atmosphere of fear and bullying among its workforce.
The legal confrontation between DraftKings and Hermalyn is ongoing, and both sides are ready to put forth their allegations. Hermalyn has questioned the applicability of non-compete clauses, arguing they’re both invalid and excessively restricting. DraftKings, on the other hand, transferred the lawsuit to federal court and remains unyielding in its stance, expressing readiness to persevere until the legal matter is fully resolved.
