Hermalyn Pushes Back, Defends Against DraftKings Claims As Hearing Looms

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The new president of Fanatics VIP is pushing back against allegations by former employer DraftKings that he planned to steal customers or secrets before the Super Bowl.

According to Michael Hermalyn, there is nothing going on other than leaving DraftKings for a “once-in-a-lifetime opportunity,” he said Wednesday in a declaration to the District Court of Massachusetts.

The filing comes on the eve of a 1 pm Thursday emergency hearing concerning Hermalyn’s new employment with Fanatics, which would go against a non-compete agreement in Massachusetts that he signed with DraftKings as their VP of growth.

Hermalyn, meanwhile, has also filed in the Central District of California as a California resident concerning the matter. Non-compete agreements are not enforceable in California, where DraftKings alleges Hermalyn hastily attempted to acquire residency at the end of January.

‘Falsely accused’ by DraftKings

Hermalyn did not waste time, stating he has been “falsely accused” of a secret plan to steal both customer and company information and make a move to Fanatics in the first few sentences of his declaration.

Instead, the DraftKings narrative is “entirely fabricated,” he said, adding that he knew this becoming a legal issue could happen:

“When I decided to leave, I knew from past experience with DraftKings that they would likely come after me aggressively and malign me as they have done with others. However, I am shocked and disappointed to see that they would go so far as they have and actually make so many completely false and fabricated accusations against me in court.

“I had specifically done everything I could to make sure they could not – truthfully – claim that I engaged in some unlawful conduct, and I worked closely with counsel to do my level best to ensure that I retained no DraftKings information or property.”

Hermalyn allegedly has no DraftKings info or property

Hermalyn claims to have acted in good faith prior to his Feb. 1 resignation to make sure he had no DraftKings property or confidential information.

The documents DraftKings accused him of accessing to steal information were documents he had “access to during the normal course of my work” and did so while still employed with DraftKings.

He also gave two work computers and his personal phone to his counsel, and bought a new phone. He also returned a corporate credit card and a wireless card.

Hermalyn gave access to his personal email and iCloud accounts to his counsel while segregating personal info from any proprietary information.

Non-DraftKings device was personal phone

DraftKings noted downloads of confidential information on a non-company device, which was Hermalyn’s personal phone, he said.

The company did not offer VIP employees company-issued phones, he said. He “regularly accessed DraftKings’ documents on this phone” while working, particularly while traveling.

This is the device he gave to his counsel prior to his resignation, he said.

Hermalyn will be harmed by DraftKings noncompetes

Hermalyn noted the new role with Fanatics represents “an important growth opportunity for me professional and personally.”

Upholding his non-compete agreement will prohibit him from working in “his chosen field” and will impact him, his wife, his children and their plans for the future.

On the other side, him working with Fanatics would not irreparably harm his former employer, he added.

Talks on Fanatics move started in January

DraftKings alleges that Hermalyn had planned since last year to move to Fanatics, though Hermalyn said the first talk of that with CEO Michael Rubin came Jan. 11.

The two men then met in Pennsylvania on Jan. 27 and did not visit the Fanatics’ Los Angeles office until Feb. 6 after resigning from DraftKings. The complaint against him alleges Hermalyn accessed confidential information from that Los Angeles office on Jan. 29, after first doing so Jan. 23.

An email that DraftKings said was sent by Hermalyn encouraging someone to meet with Mike was actually referring to himself in a script he wrote for an employee leaving the company concerning a customer, and not referring to Rubin, Hermalyn said.

HR allegations ‘exaggerated’

DraftKings alleged multiple issues that were being investigated concerning Hermalyn, including the improper us of corporate funds and allegations from female employees against Hermalyn.

Hermalyn, however, notes that he was not suspended or threatened with termination during the investigation, and was told on Jan. 26 that the investigation was over.

DraftKings also suggested Hermalyn used the death of a friend to cover his meetings with Fanatics. He called those accusations “horrid” and explained he missed meetings during the week because he expected to join Fanatics and did not want to hear any information about his former company.