Michael Z. Hermalyn, the current president of Fanatics VIP and ex-SVP of growth at DraftKings, was provisionally barred from leaking confidential data he acquired from his previous occupation to his current one. This injunction was imposed on Thursday, barring Hermalyn from utilizing any privileged data or engaging DraftKings employees or clients, though it did not impede his employment at Fanatics.
Previous week, Hermalyn lodged a suit against his former company. His legal argument questioned a non-compete clause he had agreed to with DraftKings. Hermalyn asserted that the directive was unjustifiably restrictive and not applicable in California, his present place of residence. This legal move arose subsequent to his departure from the prominent betting and gaming firm.
In reaction to the claims, DraftKings contended that their former staff member colluded with his current employer to procure insider knowledge. Allegedly, this data pertained to the forthcoming Super Bowl and comprised promotional strategies that could favor Fanatics while posing a potential risk to DraftKings. Fanatics VIP predictably dismissed these assertions, categorizing them as “bogus and concocted”, alongside “erroneous and regrettable”.
Hermalyn’s Legal Team Refutes Impropriety
The newest twist in this legal conflict effectively bars Hermalyn from divulging any confidential data to Fanatics. This decree was issued by US District Judge Julia Kobick following a one-hour session in Boston, Massachusetts. The Judge validated her decision by stating there existed ample proof to warrant such an interim restraining order, emphasizing her desire to “maintain the current state of affairs until a comprehensive evaluation of the evidence is undertaken,” as quoted in The Boston Globe.
As per the directive, Hermalyn was also instructed to surrender any confidential data belonging to DraftKings within three days and provide a written explanation of any confidential information that may have been revealed to third parties.
During the recent proceeding, Hermalyn’s defense attorney, Russell Beck, denied all allegations of any violation. He further stated that his client relinquished all computer hardware that was the property of his former employer. It is speculated that the temporary restraining order will remain active till April when a hearing aligning DraftKings’ interests is slated to occur.
“We appreciate the issuance of a temporary injunction by the judge favoring DraftKings, which asks Mr. Hermalyn to refrain from reaching out to DraftKings’ staff or clients, and from employing any confidential business data.”
a DraftKings spokesperson clarified
A representative for DraftKings expressed their satisfaction with the recently granted temporary injunction directed towards Hermalyn. They recognized the crucial nature of this order that will prohibit their ex-employee from leveraging any classified data or interacting with DraftKings’ current clientele or staff.
