A past executive of well-known firm, DraftKings, has stepped forward to contest the non-compete agreements he originally signed with the firm. The lawsuit, spearheaded by Michael Z. Hermalyn, President of Fanatics VIP and previously holding a high position as the Senior Vice President of growth at DraftKings, was submitted on Thursday. Hermalyn suggests in his lawsuit that the non-compete terms he accepted from his previous employer are not enforceable and excessively restrictive according to Californian law.
Hermalyn’s journey with DraftKings began in September 2020. As soon as he handed over his resignation, his former employer was brought into the loop about the impending lawsuit. According to Hermalyn’s non-compete agreement with DraftKings, he is prohibited from seeking employment in the gaming and betting niche, a field where he has amassed almost two decades of experience, as revealed by a report in the Daily Journal.
Hermalyn is barred not only from pursuing work in fantasy sports and the gaming space, along with comparable sectors, but also from connecting with ex-colleagues or clients due to a 1-year non-compete clause existing in his contract. All things considered, the plaintiff is hopeful for a courtroom decision that would allow him to nullify the aforementioned non-compete stipulations and, consequently, give him leeway to seek future employment in this arena.
“Mr Hermalyn is allegedly prevented from working in the gaming and betting sector, where he possesses 16 years of experience, from taking on any role related to fantasy sports, betting and gaming, as well as diverse industries, and from corresponding with his past clients and team members,”
states the lawsuit put forth by Michael Hermalyn.
In support of his claim that the non-compete clause is not valid, Hermalyn shared that he moved his residence to Los Angeles, California prior to the launch of the suit. In this new location, he has entered into a rental agreement for an apartment and has even bought a vehicle. Furthermore, Hermalyn disclosed his plans to move his children to Los Angeles as well.
Rebuttal From The Betting And Gaming Behemoth
The prominent betting and gaming entity put forth an argument that Hermalyn’s lawsuit was not appropriately filed in California. DraftKings referred to a clause in the ex-employee’s contract whereby he confirmed that a Massachusetts court would preside over litigation-related matters.
Inevitably, the gambling entity moved the lawsuit to the federal court, specifically the US District Court for the Central District of California. In DraftKings’ reply to Hermalyn’s legal concerns, they called upon the court to dismiss the plaintiff’s request. Moreover, the gaming giant challenged the former employee’s “factual assertions”.
In another recent incident, a 19-year-old individual who indulged in cyber fraud targeted at DraftKings as far back as 2022 has been awarded an 18-month prison sentence following his admission of guilt.
