Ex-DraftKings Exec Accused of Stealing Company Secrets Hits “False” Allegations

Posted on: February 8, 2024, 08:27h. 

Last updated on: February 8, 2024, 11:05h.

Philip Conneller @casinoorgphilc Read More

Expertise: Gaming Business, Regulation, Tribal Gaming.

A former DraftKings executive accused by the sports betting giant of corporate espionage has called the allegations “entirely fabricated” in a new filing to a Massachusetts federal court.

DraftKings sued its former SVP, Michael Hermalyn, on Monday. The lawsuit claims he plotted for over a year to jump ship to competitor Fanatics, taking with him confidential information about DraftKings’ VIP clients, along with its Super Bowl business plan.

Hermalyn “timed his departure and theft of confidential information to coincide with the critical days leading up to the Super Bowl to further a scheme to irreparably interfere with DraftKings’ customer and business relationships by pursuing those relationships at Fanatics using the confidential information and goodwill that he obtained at DraftKings,” the lawsuit claims.

‘Shocked and Disappointed’

Hermalyn says that’s a bunch of nonsense.

When I decided to leave, I knew from past experience with DraftKings that they would likely come after me aggressively and malign me as they have done with others,” he wrote in a declaration to the court. “However, I am shocked and disappointed to see they would go so far as they have and actually make so many completely false and fabricated accusations against me in court.”

Hermalyn claims he didn’t have an offer to join Fanatics until Jan. 27, 2024, and denies secretly discussing employment with Fanatics CEO Michael Rubin or anyone else at the company in 2023.

He also denied sharing any documents with Fanatics or having access to any DraftKings files after his resignation.

‘Horrid’ Accusation

Moreover, Hermalyn said the allegation that he falsely claimed to be mourning the death of a friend so he could take time off to fly to L.A. for contract negotiations was “horrid.”

DraftKings’ accusation that I falsely claimed to be mourning the death of my friend in late January is both wrong and disappointing,” Hermalyn said. “The week of January 29 was particularly difficult for me emotionally. In addition to grieving the death of my friend, I was contemplating an opportunity to make a significant advancement in my career by joining Fanatics VIP … which meant an immediate move to California, uprooting my family.”

DraftKings claimed in the lawsuit that Hermalyn “fraudulently attempted to establish California residency during … the visit so he could resign from DraftKings and try to invalidate his noncompete agreements in California state court.”

As of Jan. 1, 2024, California’s Business & Professions Code prohibits an employer from enforcing a noncompete agreement regardless of whether the contract was signed outside of California.