Ex-DraftKings exec accused of stealing trade secrets: “Narrative is entirely fabricated”
Michael Hermalyn says joining Fanatics was a “once-in-a-lifetime opportunity” and that he had never set foot in Fanatics’ LA office until after quitting DraftKings
The former DraftKings head of VIP has strenuously denied allegations he stole confidential information, and solicited customers and employees to leave the operator to join Fanatics.
Michael Hermalyn, who recently became president of VIP at Fanatics, described the DraftKings complaint filed against him with the US District Court for the District of Massachusetts as “filled with false accusations” and that the “narrative is entirely fabricated”.
He said joining Fanatics was a “once-in-a-lifetime opportunity” and that there had been “no secret plan to steal or use information or solicit customers or employees, much less a year-long plan”.
DraftKings is suing Hermalyn, accusing its former head of the VIP player account team of secretly meeting with Fanatics’ leadership about joining the merchandise giant, which has expanded into online gambling.
DraftKings alleges Hermalyn, who the operator says was paid millions of dollars a year, lied about mourning the loss of a friend to take time off work to visit Fanatics’ office in Los Angeles where he downloaded files including DraftKings’ confidential business plan for this Sunday’s Super Bowl.
He is also accused of fraudulently trying to establish residency in California during his alleged 48-hour trip to Los Angeles so “he could resign from DraftKings and try to invalidate his non-compete agreements in California state court only a few days later”.
Hermalyn’s contract with DraftKings meant he could not work for a competing company for at least 12 months following the end of his employment.
In a court filing in response to DraftKings’ complaint, he said: “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.
“However, I am shocked and disappointed to see that they would go so far as they have and actually make so many completely false and fabricated accusations against me in court.
“I had specifically done everything I could to make sure they could not – truthfully – claim that I engaged in some unlawful conduct.”
Hermalyn said that, as far as he is aware, not a single client or employee has moved from DraftKings to Fanatics and that January 2024 was the first time he “looked into joining Fanatics”.
The defendant said that he didn’t seriously consider joining Fanatics until he met with CEO Michael Rubin on 27 January in person in Pennsylvania.
He also insisted that he didn’t visit the Los Angeles office prior to joining Fanatics and that the first time he set foot in the office was 6 February, the day after he resigned from Boston-based DraftKings.
As for DraftKings’ claims that he lied about mourning the death of a friend to travel to Los Angeles, Hermalyn branded these accusations as “horrid” and explained that a close friend, Ben Jankowski, had lost his battle to cancer on 27 January.
Regarding the claims he downloaded confidential DraftKings information while at Fanatics’ office, the defendant said he acted in good faith prior to his resignation on 1 February and had handed over his DraftKings-issued devices – two computers – and his personal phone, personal email and iCloud accounts to his counsel.
Hermalyn also said he used his personal phone for work while employed at DraftKings, which was permitted, and that no VIP employee was issued with a company phone.
He also stated: “I did not, before or after my departure from DraftKings, provide DraftKings’ confidential information or any DraftKings documents to Fanatics or any of its affiliates, including Fanatics VIP.
“In other words, contrary to DraftKings’ unsubstantiated fears and allegations, I did not give Fanatics or any of its affiliates, including Fanatics VIP, the opportunity to access, view, copy or otherwise record DraftKings’ information.”
Despite DraftKings stating in its filing that Hermalyn is “no more Californian than [New Jersey] Governor [Phil] Murphy”, and that he “maintains a multi-million-dollar residence in New Jersey”, the defendant insisted he is a Californian citizen and a resident of Los Angeles.
Hermalyn said if the non-compete blocks him for taking up a role with Fanatics VIP in California, he would be prevented from working in his “chosen field” and that it would impact himself, his wife and their children.
Fanatics previously described DraftKings’ complaint against its former exec as “sour grapes” and that DraftKings is “understandably upset that one of its employees left for the greener pastures of Fanatics”.