Sports Betting
A former DraftKings Executive is ‘negotiating a potential resolution’ to a federal lawsuit
According to a court filing released on Tuesday, industry leader DraftKings sued a former senior executive, Michael Hermalyn, in February 2024. The report said the two sides are “negotiating a potential resolution”. Representatives from both pirates declined to give any further comment on the situation. The settlement between DraftKings and Hermalyn would end the ongoing legal expenses both sides have racked up.
DraftKings and Hermalyn have reportedly reached hundreds of thousands of dollars since February 2024. Just two weeks after Hermalyn resigned from DraftKings, he had nearly $276.000 in legal fees. Julia Kobick is the U.S. District Judge who has allowed both parties to pause the proceeding until November 20. That will be Hermalyn’s final chance to invalidate his non-compete clause.
What has happened in the timeline of this federal lawsuit?
In February 2024, DraftKings filed a lawsuit against former senior executive Michael Hermalyn. He was accused of taking confidential information to his new employer, Fanatics Sportsbook. DraftKings believed that Hermalyn was going to steal customer and business relationships and take that to Fanatics to help grow their company. Hermalyn was the senior vice president at DraftKings and resigned abruptly just 10 days before the Super Bowl.
Michael Hermalyn was “shocked and disappointed” by the claims that DraftKings had made against him. He claimed these allegations by DraftKings were “completely false and fabricated.” Additionally, Hermalyn said the lawsuit attempted to undermine his reputation as he made a transition to working with Fanatics. Following the lawsuit, Judge Kobick ruled in favor of DraftKings and placed restrictions on Hermalyn working with Fanatics.
In March 2024, DraftKings escalated the situation by filing another lawsuit after finding a “mountain of evidence” to prove Hermalyn was guilty. The lawsuit claims he stole confidential information like customer lists and marketing strategies. DraftKings also noted that Hermalyn attempted to lure two VIP employees via a phone call while at the resilience of Fanatics CEO Michael Rubin. Hermalyn’s team said the accusations by DraftKings were “over the top” and the company was trying to assassinate his character.
Where are we now with 2024 coming to an end in a few months?
DraftKings’ headquarters are in Massachusetts and Michael Hermalyn trying to use California’s lenient stance on the non-compete clause. However, Hermalyn moved his residents from New Jersey to southern California before he resigned from DraftKings. Despite his efforts, a U.S. Court of Appeals rejected his big to apply under California rather than Massachusetts law. For now, Hermalyn is still the president, VIP, and head of the Los Angeles office at Fanatics.