DraftKings Reaches Settlement in Corporate Espionage Case Against Former VIP Executive
DraftKings has reached a settlement with former VIP head Michael Hermalyn in a lawsuit that accused him of corporate espionage after joining rival company Fanatics. While settlement terms remain confidential, this resolution follows the 1st U.S. Circuit Court of Appeals in Boston upholding a lower court injunction that limited Hermalyn's work capabilities at Fanatics.
Man in business suit looking neutral
The dispute began when DraftKings filed a lawsuit in Massachusetts (February 2004), alleging Hermalyn:
- Planned his move to Fanatics for over a year
- Took confidential VIP client information
- Obtained DraftKings' Super Bowl business plan
Hermalyn contested these claims, stating:
- He only received Fanatics' job offer in January 2024
- Never shared DraftKings documents with Fanatics
- Lost access to DraftKings files after resignation
The legal battle expanded to California, where Hermalyn challenged the noncompete agreement's enforceability under California law. While the California judge suggested Hermalyn might prevail under state law, the court declined to interfere with the Massachusetts ruling.
Under the current injunction, Hermalyn cannot provide Fanatics with services related to DraftKings' business until February 1, 2025. His lawyer, Russell Beck, confirmed the settlement, stating Hermalyn will comply with his contractual obligations to DraftKings.
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