DraftKings has sued a former senior vice president. They accused him of being a “double agent” for coordinating with Fanatics to steal established company information and join the competitor. This is an all in violation of his noncompete.
The lawsuit comes days after Michael Hermalyn quit DraftKings. At the same time, he accepted a similar job at Fanatics overseeing VIP relationships for the just beginning Fanatics betting operation. Hermalyn sued DraftKings last month and said that his 12-month global noncompete was overly restrictive and unenforceable in California. He said he is now living after relocating to work for Fanatics.
DraftKings tells a different version of events in its 49-page complaint. This filing has occurred in the United States District Court for Massachusetts. The company claims that Hermalyn operated a disloyal scheme that began early last year, when he secretly met with Michael Rubin and discussed possible employment. Rubin is the CEO of Fanatics.
Hermalyn spent more than three years at DraftKings. After telling DraftKings he would be in Pennsylvania to mourn the loss of a friend, he allegedly flew to Los Angeles. Hermalyn allegedly negotiated an employment contract with Fanatics and downloaded DraftKings’ confidential business plans for the Super Bowl while sitting in Fanatics’ offices while in Los Angeles. The lawsuit accuses Hermalyn of acting in concert with Fanatics. At one point, it refers to the events as him and his new employer acting out their scheme.
DraftKings’s representative declined to comment. Hermalyn’s lawyer didn’t immediately respond to an email seeking comment.
A Fanatics spokesman gave a statement saying that this is just sour grapes. One of DraftKings’ employees leaving for the greener pastures of Fanatics understandably upsets the company. The fact that they are trying to drum up ridiculous allegations on one of their well-respected executives in an attempt to ruin his reputation sheds some light on why employees may be choosing to leave that organization.
