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Read Full BioPrizePicks has filed a lawsuit against former employee Judah Huffman, accusing him of absconding to DraftKings with company secrets after uploading sensitive company documents to ChatGPT.
Huffman spent two years as the Director of Social Media for PrizePicks before switching to a new role with DraftKings as Director of Social and Community for its sportsbook.
PrizePicks claims that before departing, Huffman uploaded a “highly sensitive brand planning document” and other documents relating to the company’s plans to ChatGPT.
DraftKings is believed to have initially offered Huffman a salary of $200,000 a year, but this was then increased to $210,000. PrizePicks alleges that the increase was due to Huffman sharing company secrets with his new employers.
“We are taking swift steps to ensure that our trade secrets and innovations are safeguarded,” said Elisa Richardson, spokesperson for PrizePicks, as quoted in SBC Americas.
Huffman violated noncompete and destroyed evidence
Additionally, Huffman had signed a noncompete agreement with PrizePicks, which the company claims he violated by signing a contract with DraftKings on May 2 and then handing in his notice at PrizePicks on May 5.
The lawsuit, filed in the Western Washington District Court, states: “Huffman’s misappropriation and disclosure of PrizePicks’ Trade Secrets to DraftKings, a competitor, were intentional, deliberate, and calculated and therefore willful and malicious, especially considering Huffman’s destruction of evidence.”
Huffman handed in his company laptop to PrizePicks after handing in his notice, and the company notes that there was a “surgical” deletion of files, emails, and chats. The lawsuit alleges this is evidence of Huffman’s guilt and attempts to cover his tracks.
PrizePicks is suing Huffman for breach of contract, violation of the Defend Trade Secrets Act, and breach of fiduciary duty. In addition, the company is also seeking a temporary injunction to prevent his employment at DraftKings.
The Accuser Becomes the Accused
In a similar case, DraftKings sued former VIP executive Mike Hermalyn for violating his noncompete and sharing trade secrets with Fanatics. Hermalyn took up a role with the rival betting company after leaving DraftKings in February last year.
A Massachusetts federal judge issued a preliminary injunction in April, limiting Hermalyn’s ability to work on DraftKings‑related business but affirming his overall employment at Fanatics.
Later that year, the two companies settled, and Hermalyn continues to lead Fanatics’ VIP operations.
DraftKings was also disciplined for sharing sensitive information on social media last year. The US Securities and Exchange Commission (SEC) fined the company $200,000 for disclosing nonpublic information to investors via CEO Jason Robins’ social media accounts.
ChatGPT Lands Multiple Executives in Hot Water
In Robins’ case, it was social media rather than ChatGPT that landed him in hot water, but the growing use of AI poses a threat to corporate security. A 2023 Cyberhaven study revealed that 4.7% of employees have uploaded confidential data to ChatGPT.
Some high-profile cases include Samsung engineers uploading internal meeting transcripts and pasting other sensitive materials onto ChatGPT in an attempt to analyse the data.
Last month, a lawyer in Utah was also caught generating a fake case through ChatGPT. Richard Bednar filed a brief referencing a made-up “Royer v. Nelson” case.
After admitting to the rogue use of the AI tool, Bednar was ordered to pay the opposing attorney’s legal fees and also refund his client’s fees.
Similarly, attorneys defending Alabama’s prison system included five fake case citations generated by ChatGPT in federal filings last month. A federal judge is considering sanctions, including fines, and ordered the firm to explain its oversight process.
In the gambling industry, Google announced a crackdown on parasite SEO affiliate sites that use ChatGPT to generate content last year.
