Starwood Charges That Top Hilton Execs Abetted Espionage
by Michael J. ShapiroJanuary 20, 2010
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Attorneys for Starwood Hotels & Resorts Worldwide are claiming that at least 44 Hilton executives, five of whom sit on Hilton's Executive Committee, were personally involved in or aware of and condoned corporate espionage against Starwood. An amended and supplemental complaint filed Thursday in Starwood's suit alleges that Hilton CEO Christopher Nassetta and former Hilton president of global development and real estate, Steven Goldman, encouraged the theft of "hundreds of thousands" of confidential Starwood files by Ross Klein and Amar Lalvani.
Klein and Lalvani were personally recruited from Starwood by Nassetta and Goldman, respectively, the filing alleges, and began forwarding proprietary company information while still employed by Starwood.
Starwood's claim points to a "mountain of undisputed evidence," including e-mails among Hilton senior management, that Klein and Lalvani worked with others within Starwood to steal sensitive documents by sending them via personal e-mail accounts, among other methods, and that such information was shared and used by all of Hilton's luxury and lifestyle brands, as well as in the development of Hilton's now-shelved Denizen brand. In the new filing, Starwood says, "This case is extraordinary, and presents the clearest imaginable case of corporate espionage, theft of trade secrets, unfair competition and computer fraud...Hilton's conduct is outrageous."
Starwood now is seeking, in addition to other conditions and damages: a court appointment of one or more "monitors" to enforce Hilton's compliance with injunctions and its non-use of Starwood information; the euthanizing of the "terminally infected" Denizen brand; a purging of all Starwood confidential information from Hilton's luxury and lifestyle brands; and a "penalty box" or "time out" period to prevent further development of Hilton's luxury and lifestyle brands.
In response, Hilton Worldwide stated that the company does not comment on pending litigation.