Michael Hermalyn, former senior vice president of business development and growth at DraftKings, has found himself embroiled in a contentious legal dispute with his ex-employer following his recent departure to rival company Fanatics in February 2024. As the newly appointed president of VIP and head of the Los Angeles office at Fanatics, Hermalyn is caught in the crossfire of allegations levied by DraftKings, which include the theft of trade secrets and unauthorized solicitation of customers and former colleagues.
The legal saga unfolded when DraftKings, in a proactive stance, secured a temporary restraining order from a federal judge. Early February saw the implementation of this order, which restricts Hermalyn from leveraging proprietary information or engaging in the solicitation of DraftKings’ customers or staff for his endeavors at Fanatics. Despite this measure, the complete prohibition of Hermalyn’s employment at Fanatics was overruled by Judge Julia Kobick of the United State District Court in the District of Massachusetts.
In retaliation to DraftKings’ aggressive legal moves, Hermalyn has accused his former employer of a targeted effort to curtail his professional activities at Fanatics. His filing paints a picture of a company resorting to defamatory tactics to tarnish his reputation as retaliation for choosing a competitor. This comes in light of the information that since the emergence of Fanatics’ online sportsbook in 2021, a notable contingent of DraftKings personnel has sought employment with the rival betting firm. This mass migration encompasses at least 186 employees, potentially sparking DraftKings’ concern over talent retention and competitive market positioning.
Hermalyn has vehemently opposed the claims made against him, addressing each with counterarguments in the filing. His defense against the accusation of pilfering customers involves one particular episode at the Super Bowl, where Hermalyn’s introduction of a customer to a Fanatics VIP representative is spotlighted; however, the assertion is deflated by the revelation that this customer was already aligned with Fanatics, even having previously interacted with Fanatics’ chairman and CEO Michael Rubin.
DraftKings’ assault on Hermalyn’s credibility extends to the suggestion of wrongful acquisition of confidential documents. The company alleges that Hermalyn had downloaded sensitive information onto a personal device, a claim that he rebuts, asserting that he was merely accessing the documents on his phone, a practice consistent throughout his tenure given the lack of company-issued phones. He further explains the transfer of files between DraftKings-issued devices was conducted with IT department oversight, demonstrating compliance with protocols.
Tensions continue to escalate as Hermalyn confronts potential damage to his career if the preliminary investigation advances, given the stringent prohibitions it enforces. Out of Fanatics’ 16,000 employees, Hermalyn is one of a mere seven who report directly to the CEO. The gravity of this unique opportunity—and the possibility of it being jeopardized—adds a personal edge to his contestation of the injunction.
Moreover, Hermalyn argues that the constraints of the preliminary investigation derail not just his current position but his entire career trajectory within the sports, betting, and gaming landscape. He contends that the requested limitations trespass beyond the realm of necessary actions that DraftKings would require to secure its commercial interests, which adds another layer to the contentious legal battle.
As the case continues to unfold, the court’s forthcoming decisions will not only shape Michael Hermalyn’s future at Fanatics but could also set a precedent for how competitive tensions are navigated in the fast-paced world of sports betting enterprises.
