DraftKings has resolved a contentious legal battle with a former senior executive accused of misusing proprietary information to aid his transition to rival Fanatics.
The executive, Michael Hermalyn, joined Fanatics earlier this year after leaving his position as DraftKings’ senior vice president of growth, a role in which he managed relationships with the company’s top-tier clients. DraftKings alleged Hermalyn violated non-compete and non-solicitation clauses in his contract, claiming he also took trade secrets to bolster Fanatics’ emerging sports betting division.
In a Boston federal court filing, DraftKings, Hermalyn, and Fanatics announced a confidential settlement, ending lawsuits in both Massachusetts and California. The terms include Hermalyn’s commitment to honor his contractual obligations to DraftKings.
Legal wrangling had been intense, with a Massachusetts judge imposing restrictions on Hermalyn’s work at Fanatics. The injunction limited his involvement in areas tied to DraftKings’ core business for 12 months after his February start date. Hermalyn denied all accusations, countering with his own lawsuit in California that challenged the enforceability of his non-compete agreement.
Despite the legal turbulence, Hermalyn retained his position at Fanatics, heading its Los Angeles office. The settlement underscores a larger tension in the fiercely competitive sports betting industry, where talent and innovation are critical to market dominance.
With the legal dispute now behind them, both companies remain focused on carving out their place in the rapidly expanding landscape of sports wagering and fan engagement.
