The legal battle between former DraftKings head of VIP, Mike Hermalyn, and his former employers has taken another step as the now-Fanatics VIP head has filed in the Massachusetts District Court to dispute previous claims made by DraftKings.
DraftKings filed a motion for a preliminary injunction against Hermalyn earlier this week alleging that it had come upon new information proving that Hermalyn stole company documents and attempted to persuade DK to defect to Fanatics with him.
Now, Hermalyn is counter-alleging that DraftKings’ claims cannot be proven and that the company is attempting “to create smoke where there is no fire” by resorting to an “unnecessary character assassination.”
The new filing, which calls for the preliminary investigation to be denied, claims that Hermalyn’s career is at risk of being “irreparably” damaged by DraftKings’ claims. The Fanatics exec’s lawyers assert that DraftKings claims are “fabrications designed to malign and destroy the reputation of a senior employee who had the audacity to seek out a better opportunity.”
The response is the latest escalation of a case that has so far rumbled on for close to two months.
What is Hermalyn accused of by DraftKings?
DraftKings first filed a lawsuit against Hermalyn in Massachusetts District Court in early February claiming that their former employee downloaded highly confidential information and engaged in unethical and inappropriate behavior.
Hermalyn responded shortly thereafter by branding those claims “salacious allegations.” A court ruling at that time decided that he could continue to work for Fanatics under conditions, including that he does not use or disclose any confidential information learned while at DraftKings or solicit business from DK or its workers.
The case escalated earlier this month when DraftKings leveled new accusations based on new information the company said had come to light.
That subsequent DK filing claimed that the “defendant knowingly and intentionally downloaded numerous documents containing DraftKings’ (“DK”) confidential information and trade secrets to his personal devices; solicited key DK employees and customers; attempted to cover his tracks by destroying evidence of his misconduct and lying in his sworn declarations, interrogatories, and deposition testimony; and failed to return all of DK’s confidential information as required by the TRO.”
Hermalyn brand allegations “outrageous”
In response, Hermalyn’s latest filing calls DK’s claims that he downloaded confidential documents “outrageous” and states that he was only viewing documents on his personal phone for DK work, which he was supposedly authorized to do. It also stresses that allegations that Hermalyn stole data are “false” because he was simply migrating files between DK-issued devices, doing so while working with the company’s IT department.
Hermalyn’s lawyers insist that he went “above and beyond” to return all DraftKings property and information upon leaving the company. It also rejects the solicitation claim by stating that DraftKings employees reached out to Hermalyn once he was at Fanatics rather than the other way around.
To obtain a preliminary injunction, DraftKings must establish it would suffer irreparable harm. Ultimately, this latest filing from Hermalyn’s side claims that DraftKings has failed to do so, as well as failed to show misappropriation or to prove that Hermalyn misused “information entitled to trade secret protection.”
“DK has a long history of aggressively smearing employees who leave or seek greener pastures with other employers,” added the filing. “DK
attempts to make an example out of Hermalyn, transparently to instill fear in other DK employees looking to jump ship and halt lawful recruiting activity by Fanatics.”
Meanwhile, a second court case is ongoing in California, where Hermalyn now resides and has filed to be freed from DraftKings’ non-compete agreements, which are invalid for California residents.
