DraftKings settles dispute with ex employee who went to work for Fanatics

DraftKings has finally settled matters with a former employee who went to work for rival company Fanatics Betting & Gaming.

Although the case focused squarely on the company’s former executive, Michael Hermalyn, who was accused of poaching "VIP" customers from his former employer and bringing them over with him to his new workplace, the case did feel like a bitter rivalry between an established and emerging betting company.

Michael Hermalyn to put a pin in DraftKings lawsuit

However, the legal saga is no more after a court filing on Monday revealed that the case has come to an amicable resolution with a settlement reached by both parties involved in both courts in Massachusetts and California.

The case was fought in both jurisdictions as Hermalyn and DraftKings were engaged in a game of cat and mouse, trying to one-up each other in what proved an exhaustive legal battle over Hermalyn’s right to work for Fanatics without complying with a non-compete clause he argued would not apply in his case.

DraftKings similarly accused his former team member of trying to convince more employees to leave the company for alternative employment at Fanatics, but the Boston-based company stopped short of naming Fanatics as a co-defendant throughout the process.

The case has not been an easy fought one for Hermalyn who hoped to start in his position at Fanatics unencumbered but who instead was hit with a preliminary injunction that restricted the type of work he can do at his new job. Fanatics, though, did not bulge and continued to stand by his employee, listing him as its Head of the Los Angeles Office.

This is true even now in light of the newly-reached settlement. However, the case seems to have gone in favor of DraftKings, as confirmed by Hermalyn’s own legal team, and his representative, Russel Beck.

Hermalyn will have to abide by his contractual obligations

"All litigation between them has been settled and dismissed on confidential terms, and Mr. Hermalyn will abide by his contractual commitments to DraftKings," Beck explained. In other words, Hermalyn will not be able to take up his new employment in full and carry out the same functions as he had at DraftKings until February 1, 2025, with the better part of the last year already spent litigating.

DraftKings in the meantime seems to have relented from pursuing Hermalyn over alleged trade secrets he stole, which was another part of the case. Hermalyn supposedly downloaded a lot of company data that was later shown to Fanatics’ boss, Michael Rubin. DraftKings never made any former accusations against anyone but Hermalyn.

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