DraftKings had its day in court and won.
A federal judge granted the online gaming company a preliminary junction on Tuesday to keep former executive Michael Hermalyn from accessing VIP clients in his new position at Fanatics Sportsbook, which he obtained while working for DraftKings.
U.S. District Judge Julia Kobick determined through evidence that Hermalyn likely violated his non-compete agreement with DraftKings and obtained confidential information before leaving for Fanatics.
The ruling in a Boston court means Hermalyn is severely limited in his role at Fanatics and is being held to the non-compete agreement he signed with DraftKings, further restricting his role at Fanatics and strengthening the temporary restraining order established in February.
Still employed
While Hermayln is not blocked from working at Fanatics, Kobick ruled that the company’s new VIP President is “enjoined from providing services to Fanatics that relate to any aspect of DraftKings’ business for which he performed services or received confidential information, as defined in the agreement during the six months before February 1, 2024.”
This also means Hermalyn can’t hire, solicit, or aid anyone at DraftKings in employment during the 12-month window. He also can’t use any of the information he accessed before his departure.
In a statement reported by Reuters, the legal sports betting operator said that the judge “rightly saw through Mr. Hermalyn’s lies and deception,” and that DraftKings “looks forward to continuing to prosecute its claims against Mr. Hermalyn to ensure he is held fully accountable for violating his legal obligations.”
Mission accomplished
DraftKings began seeking the restraining order when it filed a lawsuit against Hermalyn for hatching a “disloyal scheme” to steal from his previous employer.
The company accused Hermalyn of trying to obtain DraftKings customers and employees while also obtaining secretive documents before bolting right before the Super Bowl to begin the same job at Fanatics.
Hermalyn had already filed a lawsuit challenging the noncompete clause and testified last month that he “operated with extreme caution” to not breach his DraftKings contract.
Fanatics said in a statement that it was “dismayed at the breadth of the court's ruling,” but pleased that Hermalyn can be employed by the sportsbook and online casino operator.
