Court Issues Restraining Order against Former DraftKings Executive

Michael Z. Hermalyn, Fanatics VIP president and former SVP of growth at DraftKings, was temporarily prohibited from disclosing any sensitive information obtained from his former employer to his new employer. The temporary restraining order was issued on Thursday and while it restricted Hermalyn from using any confidential information or soliciting with DraftKings employees or clients, he was not prohibited from working at Fanatics.

Last week, Hermalyn, filed a lawsuit against his former employer. In his legal claim, the executive challenged a non-compete policy he signed off on with DraftKings. Hermalyn alleged that the policy was overly restrictive and unenforceable for California where he currently resides. The legal action was filed after he resigned from the leading betting and gaming operator.

Responding to the claim, DraftKings alleged that its former employee conspired with his new employer, agreeing to obtain insider information. Allegedly, this information was related to the upcoming Super Bowl and contained marketing plans that may benefit Fanatics and negatively impact DraftKings. Not unexpectedly, Fanatics VIP denied those allegations, labeling them “false and fabricated,” as well as “wrong and disappointing.”

Hermalyn’s Defense Denies Wrongdoing

The latest part of the legal saga effectively restricts Hermalyn from sharing any confidential information with Fanatics. The order came from US District Judge Julia Kobick after an hour-long hearing in Boston, Massachusetts. Justifying her decision, the Judge explained that there was sufficient evidence for the need for such a temporary restraining order, adding that she wanted “to preserve the status quo until more of the facts can be determined,” as announced by The Boston Globe.

Under the order, Hermalyn was also directed to return any confidential information belonging to DraftKings within three days and submit in written form details regarding any confidential information belonging to the company that may have been disclosed to third parties.

During the latest hearing, Hermalyn’s defense layer, Russell Beck, rejected claims of any wrongdoing. He added that his client returned all computer equipment belonging to his former employer. The temporary restraining order is likely to remain in effect through April when a hearing for DraftKings is scheduled.

“We are pleased that the judge granted a temporary restraining order in favor of DraftKings ordering Mr. Hermalyn not to solicit DraftKings employees or customers, and not to use any confidential company information,“

explains a spokesperson for DraftKings

A spokesperson for DraftKings revealed that the company is pleased with the recently granted temporary restraining order for Hermalyn. They acknowledged the importance of the order that would prevent the former employee from using any confidential information or soliciting with DraftKings’ current customers or employees.