Judge grants temporary restraining order against ex-DraftKings exec

Former VIP chief Michael Hermalyn barred from soliciting DraftKings’ clients and employees after recently joining Fanatics in a similar role
The post Judge grants temporary restraining order against ex-DraftKings exec first appeared on EGR Intel.  

A judge has imposed a temporary restraining order on the former DraftKings executive accused by the operator of stealing trade secrets before leaving his senior and highly paid position to join sports merchandise giant Fanatics as VIP president.

The ruling yesterday, 8 February, in the US District Court for the District of Massachusetts means Michael Hermalyn, who earned millions of dollars a year to acquire and manage VIP customers at DraftKings, is prevented from “using or disclosing any of DraftKings’ confidential information”.

He is also blocked from soliciting DraftKings’ clients as well as employees and contractors. The defendant has also been instructed to return all confidential information belonging to DraftKings.

Judge Julia Kobick said she was “convinced” the evidence justified a temporary restraining order but stopped short of preventing Hermalyn from working at Fanatics.

DraftKings’ legal team had asked the court to bar the defendant from working at Fanatics, arguing it would breach his non-compete agreement which prevented him from working for a rival company for at least 12 months after leaving the Boston-based operator.

In response to the ruling, a spokesperson for DraftKings said: “We are pleased that the judge granted a temporary restraining order in favour of DraftKings, ordering Mr Hermalyn not to solicit DraftKings employees or customers, and not to use any confidential company information.”

Reuters reported that Russell Beck, a lawyer for Hermalyn, said his client had done what he could before leaving DraftKings to limit his exposure to trade secrets to avoid any trouble.

“There’s no allegation he has that information, used that information or disclosed that information. Absolutely zero,” Reuters wrote.

Hermalyn is being sued by DraftKings, with the operator alleging he secretly met with Fanatics around a year ago to discuss employment and encouraged his subordinates to meet with Fanatics about potential roles.

DraftKings also claims he used the death of a friend in January as an excuse to take time off but he instead travelled to Fanatics’ Los Angeles office where, it is alleged, he downloaded confidential documents including DraftKings’ business plan on the 2024 Super Bowl and the firm’s marketing strategy.

Geolocation data, call logs and other activity support the argument he was in California instead on his “purported leave”, DraftKings argues. 

It is also alleged that Hermalyn fraudulently tried to establish residency in California during his short trip so that he could resign from DraftKings and attempt to invalidate his non-compete agreement in a California court.

However, Hermalyn has hit back at the claims, insisting he is a Californian citizen and slamming the 49-page complaint filed against him as “filled with false accusations” and a narrative that is “entirely fabricated”.

He said the first time he visited the Fanatics office in Los Angeles was 6 February, after he’d resigned from DraftKings, and that there had been “no secret plan to steal or use information or solicit customers or employees, much less a year-long plan”.

EGR has reached out to Fanatics and Hermalyn’s legal team for comment on the temporary restraining order.

The post Judge grants temporary restraining order against ex-DraftKings exec first appeared on EGR Intel.


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