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DraftKings trade-secret case is 'character assassination,' Fanatics exec says

Post Time:2024-03-22 Source:Reuters Author:Blake Brittain Views:

March 21 (Reuters) - Sports-betting executive Michael Hermalyn countered claims that he stole trade secrets from his former employer DraftKings (DKNG.O) for his new position at Fanatics, arguing in a Thursday filing in Massachusetts federal court that the lawsuit was "character assassination."

Hermalyn said that the complaint reflected a "culture of retribution" by DraftKings against its former employees and was meant to "instill fear" in others looking to leave the company, in a motion opposing, opens new tab DraftKings' request to preliminarily block him from working at Fanatics.

DraftKing's lawyer, Orin Snyder at Gibson, Dunn & Crutcher, said on Thursday that "the evidence against Mr. Hermalyn is open-and-shut."

Representatives for Hermalyn did not immediately respond to requests for comment on the filing.

Fanatics, best known for selling sports jerseys and merchandise, launched its sportsbook last year. Sports-betting giant DraftKings sued Hermalyn, who oversaw its relationships with its largest "VIP" customers, over his move to Fanatics last month.

DraftKings said Hermalyn secretly met with Fanatics in California, took a nearly identical position with the company and downloaded DraftKings' Super Bowl business plans to share with his new employer.

U.S. District Judge Julia Kobick temporarily blocked Hermalyn from using the company's trade secrets or soliciting its clients or employees days later, but allowed him to continue his work at Fanatics. DraftKings accused Hermalyn of additional misconduct in a separate request to block him from working for Fanatics for the duration of a non-competition agreement.

Hermalyn responded on Thursday that he had gone "above and beyond" to return DraftKings documents and devices, said he had not solicited any DraftKings employees or clients, and denied taking any secrets.

Hermalyn also denied DraftKings' allegations that he had engaged in a year-long "scheme" as a "double agent" for Fanatics, and said he had only "briefly met Fanatics' CEO a few times in group settings" before 2024.

The case is DraftKings Inc v. Hermalyn, U.S. District Court for the District of Massachusetts, No. 1:24-cv-10299.