Dec 24 (Reuters) - DraftKings ( DKNG ) has reached a settlement

with a former executive that the sports betting company had

accused of stealing trade secrets before he quit his job to help

build out rival Fanatics' nascent team catering to "VIP"

clients.

Lawyers for DraftKings ( DKNG ), Michael Hermalyn and Fanatics said

in a court filing on Monday in federal court in Boston that they

had reached a confidential settlement to resolve dueling

lawsuits filed in Massachusetts and California over whether the

executive could work at Fanatics and what services he could

provide.

The deal came three months after the Boston-based 1st U.S.

Circuit Court of Appeals had rejected Hermalyn's bid to overturn

a preliminary injunction that severely restricted the type of

work he can do at Fanatics after finding a noncompete agreement

he signed while at DraftKings ( DKNG ) was enforceable.

Hermalyn has remained employed by Fanatics throughout the

litigation. The company's website continued to list him as the

head of its Los Angeles office on Tuesday, a day after

DraftKings ( DKNG ) said it had settled the case.

"All litigation between them has been settled and dismissed

on confidential terms, and Mr. Hermalyn will abide by his

contractual commitments to DraftKings ( DKNG )," Russell Beck, a lawyer

for Hermalyn at Beck Reed Riden, said in a statement.

Jacksonville, Florida-based Fanatics issued an identical

statement. Boston-based DraftKings ( DKNG ) did not respond to a request

for comment.

DraftKings ( DKNG ) sued Hermalyn, its former senior vice president

of growth, after he moved to California and resigned on Feb. 1

ahead of the Super Bowl to join Fanatics, a company best known

for selling sports jerseys and merchandise that last year

launched its own sportsbook.

Hermalyn had overseen DraftKings' ( DKNG ) relationships with its

largest VIP customers. The company accused him of violating his

non-compete and non-solicitation agreements and alleged he

misappropriated trade secrets before joining Fanatics and tried

to poach some of its employees.

It secured a preliminary injunction in April from U.S.

District Judge Julia Kobick in Boston that severely restricted

the work Hermalyn could do at Fanatics but that stopped short of

barring him from working at the company.

The judge enjoined him for a 12-month time period starting

when he began his new job on Feb. 1 from providing services

relating to any aspects of DraftKings' ( DKNG ) business that he was

involved in or for which he had received confidential

information.

Hermalyn denied stealing trade secrets and filed a separate

lawsuit challenging the non-compete agreement in California.

A week before the 1st Circuit heard arguments in the case, a

California state court judge concluded that Hermalyn was likely

to prevail on the merits of his case under California law. But

the judge declined to issue a preliminary injunction, citing the

Massachusetts lawsuit.

The case is DraftKings Inc ( DKNG ) v. Hermalyn, U.S. District Court

for the District of Massachusetts, No. 1:24-cv-10299.

For DraftKings ( DKNG ): Orin Snyder of Gibson Dunn & Crutcher and

William Lee and Andrew Dulberg of Wilmer Cutler Pickering Hale &

Dorr

For Hermalyn: Russell Beck of Beck Reed Riden and Aliki

Sofis of Quinn Emanuel Urquhart & Sullivan

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