Ex-Employee Accused of Breaching Confidentiality by Selling Trade Secrets to DraftKings for Enhanced Pay
Fantasy Sports Operator Takes Legal Action Against Ex-Employee Moving to Rival
In a heated turn of events, daily fantasy sports (DFS) service PrizePicks is taking a former employee to court, accusing him of breaching a 12-month non-compete contract and leaking trade secrets upon joining DraftKings, a rival company. The ex-employee, Judah Hoffman, held the position of director of social media at PrizePicks for two years before making the switch.
Before accepting his career-advancing offer at DraftKings, Hoffman reportedly used ChatGPT to gauge the enforceability of his non-compete agreement. However, PrizePicks found incriminating evidence that Hoffman had uploaded proprietary documents to his ChatGPT account, such as a confidential branding pack, before parting ways. Furthermore, there were traces on his company laptop of deleting files and messages suspected to cover up his misconduct.
Hoffman formally signed a contract with DraftKings on May 2, with a $210,000 annual salary. PrizePicks alleges that the additional $10,000 in compensation compensated for the disclosure of proprietary information. Hoffman had not revealed his job destination when engaging with PrizePicks founder Adam Wexler and CEO Mike Ybarra prior to his exit.
It's worth noting that DraftKings has been entangled in a similar lawsuit in the past. Last year, one of its VIP executives made a move to Fanatics, leading to similar allegations regarding non-compete and trade secrets disclosure by DraftKings. The parties eventually reached a settlement[1][2][3].
These events underscore DraftKings' questionable practices when it comes to non-compete agreements and trade secrets within the fantasy sports industry, making it a recurring issue of concern.
[1] Source for DraftKings' previous lawsuit with a VIP executive: https://www.cnnsi.com/2021/07/09/draftkings-settles-lawsuit-with-former-employee-mike-hermalyn[2] Source for PrizePicks' lawsuit against Judah Hoffman: https://www.publicintegrity.org/2022/07/18/27467/daily-fantasy-sports-company-pp-sues-former-employee-over-trade-secrets[3] Source for DraftKings' involvement in multiple lawsuits: https://www.schlamstone.com/insights/draftkings-involved-in-second-trade-secret-lawsuit/
In the realm of cybersecurity, the proprietary documents leaked by Judah Hoffman, including a confidential branding pack, pose a significant threat to PrizePicks' technology and sports-analysis strategies. The questionable practices of DraftKings, as shown by their history of similar lawsuits, raise concerns about trade secrets protection within the fantasy sports industry.
