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Fanatics VIP president Michael Hermalyn (pictured) has sued his former employer DraftKings for its “illegal and unenforceable” non-compete agreement.

Last Thursday (1 Feb), Hermalyn’s attorneys filed a suit in the Los Angeles Superior Court to overturn the provisions of his non-compete agreement with DraftKings.

Until the date of the filing, Hermalyn was employed by DraftKings as senior vice president of growth, having joined the business in September 2020.

The complaint argued DraftKings’ employment agreements with Hermalyn contained “illegal” post-employment restrictive covenants. Fanatics VIP is also listed as a plaintiff in the suit.

The agreement included a global 12-month non-compete, client non-solicitation and no-hire, as well as employee non-solicitation and no-hire provisions.

Hermalyn also challenged the provisions being litigated in Massachusetts, despite having never lived or worked in the state.

“Defendant DraftKings, Mr. Hermalyn’s former employer, has sought to improperly constrain Mr. Hermalyn from pursuing a lawful profession of his choosing with Fanatics VIP in California, and to improperly restrict Fanatics VIP from employing him, in direct violation of California law and public policy,” read the suit.

As such, Hermalyn is seeking the court to provide a judgement that the non-compete provisions in his contract are “void and unenforceable” under Californian law.

DraftKings responds to allegations

In a responding filing, DraftKings requested to move the case to federal court, specifically the United States District Court for the Central District of California.

The operator argued the case was “improperly filed” in California. This is due to a clause in Hermalyn’s employment contract that disputes should be litigated in a Massachusetts court.

DraftKings also highlighted that it received the suit minutes after Hermalyn resigned.

“DraftKings denies plaintiffs’ factual allegations and denies that they are entitled to the relief requested,” said the operator’s attorneys in the filing.

“However, based on the allegations in the complaint and the prayer for relief, all requirements for federal jurisdiction have been met, and this court accordingly has original jurisdiction over this action.”

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