Starwood Sues Hilton Hotels for Corporate Espionage

The lawsuit claims ex-Starwood employees took over 100,000 electronic and hard copy files.

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Starwood Hotels & Resorts Worldwide today sued Hilton Hotels and two senior executives—former Starwood employees—for corporate espionage. Sounds like juicy fodder for a big-screen thriller. Starwood claims the executives stole "truckloads of documents" before and after they joined Hilton Hotels in June 2008, in an effort to expedite Hilton's entry into the lifestyle and luxury market with its Denizen brand.

The Hilton executives named in the lawsuit—Ross Klein, head of luxury & lifestyle brands, and Amar Lalvani, head of development for the segment—had been closely involved with developing Starwood's W Hotels brand.

"This case involves corporate espionage and the looting through computer fraud of a mountain of information," the lawsuit claims. "Klein and Lalvani took and encouraged other Starwood employees to take with them to Hilton over 100,000 electronic and hard copy files, many containing highly confidential and proprietary Starwood information and trade secrets."

Starwood, which also operates the Sheraton and St. Regis chains, seeks monetary damages and a court order that would halt Hilton's Denizen brand, which has been compared to Starwood's W chain.

A Hilton spokesman responded in a statement that, "Hilton Hotels Corporation believes this lawsuit is without merit and will vigorously defend itself. We fully intend to move forward on the development of our newest brand, Denizen Hotels."

The suit was filed in the U.S. Southern District of New York.

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espionage
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  • Kimberly Castro

    Kimberly Castro is the managing editor of Money and Health at U.S. News. You can follow her on Twitter, connect with her on LinkedIn, circle her on Google+, or email her at kcastro@usnews.com.