A preliminary injunction has been placed against DraftKings (Plaintiff) by Michael Hermalyn (Defendant), following accusations of litigation placed with the US District Court in the District of Massachusetts. However, he has now responded...
Hermalyn is the current President, VP and Head of the LA Office of Fanatics, having previously held the role of SVP in both Business Development and Growth across three and a half years at DraftKings.
DraftKings has accused the former SVP of litigation, with this current injunction calling the charge ‘unnecessary character assassination.’
In the preliminary statement, the injunction said, ‘DraftKings' strategy is to attempt to create smoke where there is no fire. DK comes to this Court with over-the-top accusations – that are directly contrary to the evidence and DK’s own internal records,’ followed by, ‘The Court should not be misled by DK’s bombast and smoke and mirrors and should deny DK’s requested PI. Hermalyn is not the bad actor here. When DK’s “evidence” is actually examined, DK’s narrative completely crumbles.’
The injunction also points to the fact that, since the announcement of the Fanatics sportsbook in 2021 (and launch in 2023), over 180 employees of DraftKings have applied to roles at Fanatics. The statement expresses how, in making an ‘example’ of Hermalyn, other employees of the sportsbook will be less likely to follow his lead.
The injunction then lists several of DraftKings' litigation claims against Hermalyn with retorts to their illegitimacy. Examples include DraftKings’ accusation of Hermalym downloading company documents onto a ‘non-DK device,’ which was found in the injunction to be Hermalyn’s personal phone – a device that he had authorization to use for company work.
Moreover, DraftKings does not issue company phones, making personal devices for all DraftKings employees a necessary tool for accessing work.
Other claims include Hermalyn’s soliciting of DraftKings staff to join Fanatics in 2023, which Hermalyn says was proven to be false, with Hermalyn encouraging a member of staff to stay with DraftKings as opposed to encouraging them to leave for Fanatics.
After pointing out the harm the injunction could cause to Hermalyn, as well as the lack of business interest and impact his actions would have on the company, the preliminary injunction stated to the Massachusetts District Court that, not only did DraftKings fail ‘to show a likelihood of success, but that its claims have ‘no legitimate business interests’ and ‘no goodwill-based justification,’ among other points.
This is far from DraftKings' first dealing with legal challenges, having been hit with a class action lawsuit by the Public Health Advocacy Institute in Massachusetts in December for deceptive promotions. It is also not the first time this week a major operator has been involved in a court case involving staff poaching, with Wynn accusing Fontainebleau (and Fontainebleau counterclaiming) the practice.
