In a legal battle unfolding in Massachusetts federal court, Michael Hermalyn, a former executive of sports-betting giant DraftKings, has strongly rebutted allegations that he misappropriated trade secrets after transitioning to a rival company, Fanatics.
Hermalyn’s defense, detailed in a Thursday filing, contests DraftKings’ lawsuit, labeling it as an attempt at “character assassination” and a reflection of DraftKings’ “culture of retribution” towards ex-employees.
He argues that the lawsuit aims to “instill fear” among those contemplating leaving DraftKings, especially after the company sought a preliminary injunction to prevent him from assuming his role at Fanatics.
Orin Snyder, representing DraftKings and associated with Gibson, Dunn & Crutcher, described the case against Hermalyn as “open-and-shut,” highlighting the stakes involved.
Despite these claims, representatives for Hermalyn have not commented on the matter.
The dispute emerged after Fanatics, primarily known for its sports merchandise, ventured into sports betting, hiring Hermalyn, who had been pivotal in managing DraftKings’ VIP customer relations.
DraftKings alleges Hermalyn engaged with Fanatics covertly, accepted a similar role, and unlawfully shared confidential Super Bowl plans.
U.S. District Judge Julia Kobick issued a temporary order restricting Hermalyn from leveraging DraftKings’ trade secrets or engaging its clients and employees, though he was permitted to continue his duties at Fanatics.
DraftKings has further accused Hermalyn of a broader violation involving a non-competition clause, suggesting a deliberate attempt to benefit Fanatics.
Hermalyn counters these allegations, insisting he returned all DraftKings-related materials and refrained from any solicitation, denying any secretive collaboration with Fanatics.
He also refuted claims of acting as a “double agent,” clarifying his interactions with Fanatics’ CEO were minimal and incidental before 2024.
This legal confrontation is captured in the case DraftKings Inc v. Hermalyn, filed in the U.S. District Court for the District of Massachusetts, under case number 1:24-cv-10299.
Legal representation for both parties includes notable firms, with DraftKings backed by Wilmer Cutler Pickering Hale & Dorr and Gibson, Dunn & Crutcher, and Hermalyn defended by Beck Reed Riden.