DraftKings, Fanatics settle Hermalyn suit
A high-profile legal battle between DraftKings and Fanatics Sportsbook is coming to a close. Just before Christmas, the companies reached a settlement in their dispute over executive Michael Hermalyn’s transition from DraftKings to Fanatics.
Reuters reported that the settlement effectively ends the litigation between the parties. It was announced on 22 December and finalised in a filing with the US District Court for the District of Massachusetts. The court dismissed the case with prejudice, which means the issue cannot be legally revisited.
The conflict began earlier this year when Hermalyn, a former senior executive at DraftKings, accepted a position at Fanatics Sportsbook. DraftKings accused Hermalyn of breaching his employment agreement and potentially sharing confidential business strategies and trade secrets with his future employer.
Hermalyn hired to build out VIP base
Fanatics, an emerging player in the sports betting industry, has been aggressively expanding its footprint. Hiring experienced executives from established operators like DraftKings fits with that strategy.
The lawsuit alleged that Hermalyn’s insider knowledge of DraftKings’ operations and growth plans posed a direct competitive threat. He was hired by Fanatics to help the sportsbook build out its VIP player base. DraftKings was concerned that Hermalyn could use privileged information to poach customers.
DraftKings sought an injunction to restrict Hermalyn’s role at Fanatics, arguing that his move violated non-compete clauses and confidentiality agreements. The court initially ruled in DraftKings’ favour. At that point, it issued a preliminary injunction that required Hermalyn to step back from certain strategic and operational responsibilities at Fanatics.
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