DraftKings’ (DK) latest filing in its case against former employee Michael Hermalyn details spicy new allegations against DK’s former SVP of growth.
Filed on March 14 in Massachusetts District Court, the motion for preliminary injunction details “new and overwhelming evidence” uncovered that “demonstrates the urgent need for a preliminary injunction.”
According to the filing, Hermalyn’s “theft, deception, and lies are far more extensive and alarming than anyone could have imagined.”
DraftKings’ lawyers summarize the motion’s arguments plainly in its introduction:
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 DraftKings’ (“DK”) confidential information and trade secrets to his personal devices; solicited key DK employees and customers; attempted to cover his tracks by destroying evidence of his misconduct and lying in his sworn declarations, interrogatories, and deposition testimony; and failed to return all of DK’s confidential information as required by the TRO.
The defendant’s actions, it follows, were “brazen, egregious, and indefensible.” Specifically, it suggests Hermalyn could have departed DK with integrity while honoring his contractual commitments.
Instead, he did the opposite.
DraftKings Seeks Enforcement of Non-Compete
In February, a Massachusetts judge granted DraftKings a temporary restraining order (TRO) restricting Hermalyn from soliciting DK customers or employees or sharing confidential DK materials or information as Fanatics’ new president of VIP programming. DK is now asking the Court to prevent him from working for Fanatics for the duration of his non-compete covenant.
DraftKings’ latest brief alleges the evidence backing the TRO “pales in comparison” to details it has since uncovered. The new evidence includes affidavits from several DraftKings employees. Two of those, Andrew Larracey and Hayden Metz, assert that Hermalyn attempted to solicit them on Fanatics’ behalf.
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.
As a result, DK claims “nothing short of a preliminary injunction” enforcing the restrictive covenants will stop Hermalyn’s “bad faith actions” or prevent “irreparable harm.”
The filing also questions Fanatics, who previously called DraftKings’ complaint “sour grapes.”
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 and then schemed with him to circumvent his one-year noncompetition agreement.
Filing Argues Hermalyn Has ‘No Legitimate Defense’
DraftKings concedes Hermalyn had every right to leave DK for a new job. What he couldn’t do, DK argues, is violate his employment agreements.
The evidence of Defendant’s theft, destruction of evidence, false declarations and testimony, and failure to abide by the TRO is overwhelming. Confronted with the evidence at his deposition, Defendant lied, dissembled, obstructed the questioning, or feigned no recollection (more than 100 times) of events occurring weeks ago.
This is not a litigant who comes before the Court with clean hands. It is a party who has been caught dead to rights and has no legitimate defense.
While the brief notes the Court avoided enforcing the noncompete, it contends it is now clear Hermalyn has “little regard for the truth” or court orders.
Nothing short of a preliminary injunction enjoining him from competing against DK, including preventing Defendant from working at Fanatics for the duration of his noncompetition covenant, will prevent Defendant from continuing to irreparably harm DK. The Court must stop him now.
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