Court says ex-DraftKings employee can work for Fanatics but with conditions

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The ruling in a Massachusetts District Court Thursday was a mixed result for both DraftKings and its former SVP of Growth Michael Hermalyn.

The court granted DraftKings’s request for a temporary restraining order for many aspects of its request, save for a big one, which is that Hermalyn can continue in his new role working for Fanatics.

Hermalyn can work for Fanatics, but can’t use DraftKings intel or customers

What Hermalyn cannot do in his new role is:

  • Use or disclose any confidential information he learned while at DraftKings
  • Destroy or move any work product still in his possession
  • Solicit any business with existing DraftKings customers, clients, vendors or partners
  • Solicit an employee, advisor, consultant or contractor with DraftKings to leave their post in the company

That means Hermalyn can work with Fanatics during this week’s Super Bowl festivities but he must take care not to violate any of these stipulations by doing so.

“We are pleased that the judge granted a temporary restraining order in favor of DraftKings ordering Mr. Hermalyn not to solicit DraftKings employees or customers, and not to use any confidential company information,” a DraftKings spokesperson told SBC Americas.

Discovery in the case will be expedited

In the meantime, the court also granted DraftKings’s request for expedited discovery to an extent. The court said Hermalyn did not need to produce the list of work product the initial filing claimed he stole. They are allowed to depose Hermalyn for four hours and Hermalyn’s legal team can depose the Head of IT for DraftKings for the same amount of time.

Both parties will need to complete discovery by March 7. There are various motion and response deadlines throughout March and a motion hearing is set for April 2.

California district court denies DraftKings’s request a second time

This is not the only court case that could impact Hermalyn’s standing with his new company. For the second time in as many days a California federal court has denied DraftKings’s attempt to transfer Hermalyn and Fanatics VIP’s lawsuit against the company and its non-compete agreement from a state to federal court.

Despite arguing that the recent formation of the company Fanatics VIP indicated that it was a “sham” organization designed to circumvent Hermalyn’s non-compete agreement with DraftKings, the judge sent the case back down to the Los Angeles Superior Court where it will be heard.