April 16 (Reuters) - A former DraftKings executive on

Tuesday took to the witness stand to deny stealing the company's

trade secrets or soliciting its employees after he joined sports

betting rival Fanatics, saying he "operated with extreme

caution" in his exit.

But Michael Hermalyn's testimony before a federal judge in

Boston was quickly undercut by conflicting testimony by two

DraftKings employees who said he extended them multi-million

dollar pay packages if they followed him to Fanatics and helped

build out its nascent team catering to "VIP" clients.

Those employees, Andrew Larracey and Hayden Metz, said they

received offers from Hermalyn after calling him to learn about

his departure and while Hermalyn was in Los Angeles, where he

was staying at the home of Fanatics CEO Michael Rubin.

Those job offers included pay packages as high as $10

million for Metz, the men testified. Larracey said he quickly

applied and within days was interviewing with Fanatics

executives for a job he ultimately did not take.

"I had no reason to doubt that these were valid offers,"

Larracey said.

The hearing marked a crucial stage in a fast-moving lawsuit

filed in February by sports-betting giant DraftKings after

Hermalyn resigned on Feb. 1 ahead of the Super Bowl to become

the president of Fanatics' VIP program.

Fanatics, best known for selling sports jerseys and

merchandise, launched its sportsbook last year. DraftKings has

sought to block Hermalyn, who oversaw its relationships with its

largest customers, from working there.

U.S. District Judge Julia Kobick in issuing a temporary

restraining order on Feb. 8 declined to go so far as to block

Hermalyn's employment at Fanatics, opting instead to bar him

from soliciting clients and employees.

But she said she would reassess what restrictions were

needed in weighing a request for a preliminary injunction.

Tuesday's testimony, she said, would help her assess

"conflicting evidence" concerning whether Hermalyn

misappropriated confidential documents and breached a clause in

his contract barring him soliciting employees if he left.

Asked by his lawyer, Russell Beck, whether he had accessed

DraftKings' ( DKNG ) documents since resigning or disclosed information

to anyone at Fanatics, Hermalyn, who is now the president of

Fanatics' VIP division, said: "The answer is a hard no."

But DraftKings counsel Orin Snyder grilled Hermalyn

repeatedly about how he deleted large batches of files from a

work laptop in his final days of employment and transferred

documents, all of which Hermalyn said were personal.

Hermalyn acknowledged under questioning by Snyder that he

spoke with Larracey and Metz after taking the Fanatics job. But

he denied making any job offers to them, later telling Beck:

"Why would I do that on my first day and run and try to hire

these two people?" he testified.

"It just doesn't make any sense," he added.

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

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

For DraftKings: Orin Snyder, Jason Schwartz, Harris Mufson

and Justin DiGennaro of Gibson Dunn & Crutcher and William Lee

and Drew Dulberg of Wilmer Cutler Pickering Hale & Dorr

For Hermalyn: Russell Beck and Stephen Riden of Beck Reed

Riden

Read more:

DraftKings trade-secret case is 'character assassination,'

Fanatics exec says

Ex-DraftKings exec can work at Fanatics, can't solicit

clients during Super Bowl: judge

DraftKings sues former executive for taking secrets to

sports-betting rival