Ex-DraftKings employee loses appeal as Fanatics job faces constraints

The case of Michael Hermalyn, a former DraftKings employee, who is accused of tapping into internal data to advance his career within Fanatics Sportsbook, his current employer, lost an appeal at a federal appeals court last week, Reuters wrote.

DraftKings secures another win against a former employee

Hermalyn was looking to overturn an injunction that severely limited his ability to do his job for Fanatics, after DraftKings alleged that its former employee had left the company with a lot of sensitive information, specifically, information about VIP customers.

Hermalyn has vehemently denied those allegations, and Fanatics has not been named in the proceedings, but the company stood by Hermalyn in principle. The ruling of Senior US Circuit Judge O. Rogeriee at the Court of Appeals is based on Californian law, where Hermalyn currently resides.

The case, though, takes into consideration both the laws in Massachusetts and California. Massachusetts is DraftKings’ base of operations. Essentially, the appeal wanted to use Californian law to trump Massachusetts law, but Hermalyn’s legal team was unable to prove why this should be the case.

DraftKings has been hounding Hermalyn, an employee it considers has shared sensitive data, or at the very least – has made use of it in advancing his own career – to secure his position with Fanatics Sportsbook, the emerging rival to DraftKings, which is gathering momentum quickly across the United States.

Hermalyn’s position within DraftKings put him in direct contact with some of the company’s biggest customers. DraftKings has alleged that he was using this knowledge to help Fanatics quickly develop its own VIP clientele, although the sports betting giant has refused to name its rival in the proceedings save for a round-about way.

DraftKings still insists that Hermalyn has violated his non-compete and non-solicitation agreements and alleges that sensitive business data has been used by its former employee.

Californian law should take precedence – well, almost

Hermalyn was blocked by a court in Boston, Massachusetts, from providing Fanatics any services that he might have provided to his former employer for a period of 12 months, but Hermalyn sought to overturn this under Californian law.

His bid has now come to an end with judge O. Rogeriee stating in his opinion, as noted, that there was no clear reason why Californian law ought to take precedence in this particular case.

Hermalyn, however, remains adamant on both points – that he had at no point leaked trade secrets and that he should be treated under Californian law should be the one that settles things, as he lives in the state, and Fanatics’ subsidiary which he is in charge of is also based in California.

The case will most likely continue as it has before, as Hermalyn seeks to assume his full responsibility at Fanatics.

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