• Home
  • News
  • People
  • DraftKings deepens corporate espionage accusations against former employee
igamingnext photo
DraftKings has doubled down on corporate espionage accusations against the former head of its VIP programme, Michael Hermalyn.

The accusations were made as part of the online sports betting giant’s countersuit against Hermalyn, who took on the president, VIP role at rival operator Fanatics last month.

DraftKings said it has uncovered new evidence against the executive that demonstrates the need for the court to enforce the non-compete clauses in his contract through an injunction.

“Defendant’s theft, deception, and lies are far more extensive and alarming than anyone could have imagined several weeks ago,” said DraftKings’ attorneys in the filing.

“A mountain of evidence—forensics, witness testimony, and binding admissions by defendant at his deposition—confirms that defendant knowingly and intentionally downloaded numerous documents containing… confidential information and trade secrets to his personal devices.”

The operator also alleged the ex-SVP, growth solicited key DraftKings employees and companies and attempted to cover his tracks by destroying evidence of misconduct.

Hermalyn also lied in his sworn declarations, interrogations and depositions, as well as failed to return all required confidential information, DraftKings alleged.

“Defendant’s actions were brazen, egregious, and indefensible,” added the business. “After learning he was being investigated for workplace misconduct in early January, defendant could have departed DK with integrity and honoured his contractual commitments.

“Instead, he did the opposite.”

DraftKings allege scheme to clone VIP programme

The company has alleged Hermalyn’s “scheme and betrayal” was part of a wider plan by Fanatics to clone the operator’s VIP programme.

“Rather than compete fairly by building its own VIP program from scratch, Fanatics lured defendant away to assume the same role he occupied at DK in exchange for a multi-million-dollar compensation package,” said the business in the suit.

Hermalyn downloaded many of its “closely guarded and most valuable business documents” to his personal devices, the business accused.

Alleged instances of this include during a stay at the Los Angeles home of Fanatics CEO Michael Rubin, despite being still employed by DraftKings.

DraftKings claims the exec has deleted hundreds of documents that contain evidence of his misconduct, even after consulting with the Fanatics chief legal officer.

As a result, the operator argued the court should issue a preliminary injunction that would enforce the non-compete in Hermalyn’s DraftKings contract.

“The evidence presented in support of this motion—affidavits from DK employees, a forensic investigation of defendant’s company-issued laptops, defendant’s numerous lies, and defendant’s incriminating deposition testimony—lays bare an egregious pattern of misconduct confirming that defendant has no regard for his contractual commitments, legal obligations, or following the rules,” said the business.

In a separate filing, Hermalyn has called for the suit to be dismissed, arguing the non-compete covenants in his contract do not apply, due to California law.

Similar posts