186 employees from DraftKings have submitted requests to transition to Fanatics and are in the process of filing claims.
Posted on: March 22, 2024, 06:30h.
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In 2021, Fanatics, a company known for selling sports apparel, expanded into the sports betting industry. As a result, 186 employees from DraftKings have submitted applications to leave and join the new Fanatics sportsbook. This information was revealed in a recent filing to a federal court in Boston by lawyers representing Michael Hermalyn, a former DraftKings executive who is being accused of corporate espionage by his former employer.
In a recent legal filing to a court in Boston, Michael Hermalyn, who is pictured above, was accused by DraftKings of engaging in corporate espionage. Hermalyn’s attorneys were direct and forceful in their language. (Image: DraftKings)
DraftKings filed a lawsuit against Hermalyn, who previously served as their SVP of VIP, in February. The lawsuit alleges that he had been planning for more than a year to leave for Fanatics, taking with him confidential data pertaining to DraftKings’ VIP customers and their Super Bowl strategy.
DraftKings has filed a claim stating that Hermalyn encouraged two of their employees to leave and join Fanatics after he became a member of the company.
DraftKings recently submitted a request for a preliminary court order to prevent Hermalyn from working at Fanatics during the non-compete period outlined in his DraftKings contract.
Non-compete agreements cannot be legally enforced in California, where Hermalyn currently works and lives, even if the contract was signed in a different state.
Attorneys representing Hermalyn and Fanatics are unapologetically direct in their motion to reject the injunction request, submitted this week.
‘Culture of Retribution’
DraftKings has been accused of purposely twisting the truth and participating in the defamation of its former staff member.
According to the submission, the 186 staff members of DraftKings who attempted to transfer to Fanatics were not motivated by Hermalyn, but rather by a desire to escape a vengeful work environment.
Attempting to put a stop to this pattern, DK is using Hermalyn as a cautionary tale in order to discourage other employees from leaving and to put an end to any legal recruiting efforts by Fanatics. The Court should not be deceived by DK’s exaggerated language and deceptive tactics, and should reject DK’s request for a preliminary injunction,” the motion cautions.
Additionally, according to the filing, the two employees whom Hermalyn reportedly approached had actually initiated contact with Hermalyn, and this occurred within 24 hours of Hermalyn’s first day at Fanatics. Alternatively, the filing suggested that Hermalyn only replied to inquiries rather than initiating any communication.
According to the legal document, DraftKings does not allege that they have lost clients to Fanatics, so they have not demonstrated any real damage from Hermalyn’s behavior.
‘Outrageous Claims’
According to the submitted document, the accusation made by DK that Hermalyn had downloaded files on a device not belonging to DK was deemed to be very shocking.
This case did not reveal that DraftKings does not provide employees with company phones. Additionally, the “non-DK device” was actually Hermalyn’s personal phone which he used to access documents related to his work at DraftKings. The filing stated that he had complete authorization to use this device for work purposes.
Hermalyn’s legal team argued that there is no evidence of wrongdoing on her part. They accused DK of maliciously trying to ruin Hermalyn’s reputation by misrepresenting what they claim is “evidence,” a tactic they often use. In fact, DK has a track record of attacking former or prospective employees who choose to leave for better opportunities elsewhere.
