DraftKings has reportedly reached a settlement with a former executive accused of taking trade secrets when he left the company. According to Reuters, Michael Hermalyn allegedly used confidential information to help Fanatics get its VIP client services team off the ground.
The settlement appears to have effectively ended litigation between the two sides. It was announced on December 22 and officially finalized with a filing in the US District Court for the District of Massachusetts. The court dismissed the case “with prejudice,” which means that it is closed permanently and further legal action cannot be taken.
Here's a better pic…but yeah it's done…although the court apparently will keep jurisdiction over this case for FOUR YEARS in case anything goes wrong. pic.twitter.com/Yd8DSzue9q
— Paul Lesko (@Paul_Lesko) December 27, 2024
The lawsuit focused on whether Hermalyn could work at Fanatics and his responsibilities there. The settlement came about three months after the 1st U.S. Circuit Court of Appeals in Boston upheld a preliminary injunction enforcing the noncompete agreement Hermalyn had signed while at DraftKings. The ruling restricts the kind of work Hermalyn could take on at Fanatics. Despite the legal issues, Hermalyn stayed on with Fanatics throughout. At the time of writing, he was still listed as the head of Fanatics’ Los Angeles office on the company’s website.
Russell Beck, a lawyer for Hermalyn, was cited by Reuters as saying: “All litigation between them has been settled and dismissed on confidential terms, and Mr. Hermalyn will abide by his contractual commitments to DraftKings.”
DraftKings took legal action against Hermalyn, their former senior vice president of growth, after he relocated to California and resigned on February 1, right before the Super Bowl, to join Fanatics. The company, known for selling sports jerseys and merchandise, had just stepped into the sportsbook game last year.
What states is Fanatics Sportsbook legal in?
Fanatics is making big moves in the sports betting world, aggressively expanding its presence. Bringing on experienced executives from major players like DraftKings seems to be part of their game plan. By March 2024, the company had already rolled out its official sportsbook in 15 states.
Fanatics Sportsbook is legally available in Arizona, Colorado, Connecticut, and the District of Columbia. It is also operational in Iowa, Illinois, Indiana, Kansas, and Kentucky. Fans in Louisiana, Maryland, Massachusetts, and Michigan can access the sportsbook as well. It is also active in New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Vermont, Virginia, West Virginia, and Wyoming.
ReadWrite has reached out to Fanatics and DraftKings for comment.
Featured image: Fanatics / DraftKings
