According to DraftKings’ former VIP boss Mike Hermalyn, the company’s lawsuit against him constitutes retaliation for CEO Jason Robins feeling “deeply wounded” by Hermalyn’s departure for Fanatics. Hermalyn casts this as a personal vendetta or “animus” on Robins’ part, claiming that the DraftKings CEO has a history of “retaliating against departing employees.”
Hermalyn opposes the motion filed last month by his former employer to strike elements of his answers to DraftKings’ initial complaint. In that motion, DraftKings claimed accusations of a business feud, and Robins’ alleged retaliatory behavior went beyond the lawsuit’s boundaries.
However, in his objection, Hermalyn reasserts his claims of DraftKings’ and Robins’ allegedly grudge-fuelled legal efforts. Further, the filing argues that the Court should deny the motion and address this through Hermalyn’s 32-point defense.
Robins has made concerning statements to individuals affiliated with DraftKings and to several third parties about his true goals: to ruin Mr. Hermalyn (personally and professionally), to get his employment terminated by Fanatics, and to take him out of the industry altogether—these not-so-veiled threats and statements have nothing to do with enforcing DraftKings’ post-employment restrictive covenants for legitimate business purposes. Just the opposite.
While the judge examines both sides’ arguments, Hermalyn awaits a secondary ruling from the Massachusetts First Circuit Court of Appeals. In that instance, Hermalyn is appealing a temporary injunction limiting his work with Fanatics.
Brief Claims Strike Motion Not Warranted or Legitimate
In this latest filing, Hermalyn claims that under Robins’ direction, DraftKings initiated the current legal battle with a 49-page Verified Complaint, pleading a “plethora of smears.” Smears that, Hermalyn notes, “have only continued throughout the case.”
Hermalyn argues those “inflammatory accusations” are “consistent with and indicative of” more at play than mere enforcement of restrictive covenants for legitimate business purposes.
Instead, the filing argues, DraftKings is “improperly seeking to chill legitimate, ordinary competition.”
DraftKings’ Motion is proof positive of its ill intent. In his Answer, Mr. Hermalyn raised traditional affirmative defenses (including his 2nd and 5th Defenses) that DraftKings brought this case in bad faith and for anticompetitive and improper purposes. He also pleaded facts about Robins’ and DraftKings’ misconduct in support of those and other unchallenged defenses, including unclean hands (his 4th Defense), specifically forecasting that properly tailored discovery would bear them out. DraftKings—obviously concerned about these negative facts coming to light—filed a Motion to Strike parts of the Answer.
Further, Hermalyn argues that, according to precedent, striking portions of a pleading is a “drastic and disfavored remedy.” And one only granted in “rare and extreme circumstances” even when warranted and filed for legitimate reasons, of which it says DraftKings’ motion is neither.
Rather, Hermalyn says DraftKings is trying to “prematurely foreclose specific, targeted, and critical discovery that will be appropriately tethered to Mr. Hermalyn’s defenses.”
Court Should Deny Motion, Proceed to Discovery
As a result, Hermalyn argues the judge should reject DraftKings “extraordinary request” for a minimum of three reasons.
First, the defenses under question are valid, legally sufficient, and material to DraftKings’ claims against Hermalyn and its request for “equitable relief.” At this stage, the brief argues for preserving broad defenses and refining them later in discovery.
Second, Hermalyn claims there is nothing “immaterial, impertinent, or scandalous” about Hermalyn’s counter allegations. Instead, he argues they are “directly relevant to the merits of DraftKings’ claims” and many of his defenses.
Third, Hermalyn argues DraftKings has not demonstrated any undue prejudice from including the challenged allegations or defenses.
The Court should therefore reject DraftKings’ unfounded effort to impede Mr. Hermalyn’s defense, allow Mr. Hermalyn’s allegations to be properly developed, and resolve any discovery disputes when and if they are ripe.
Finalizing his arguments, Hermalyn says that discovery should proceed according to the Court’s schedule.
In conclusion, Hermalyn urges the Court to deny DraftKings’ motion:
For the foregoing reasons, the Court should deny Plaintiff’s Motion to Strike.
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