Global hospitality company, Hilton Worldwide, announced the finalization of an agreement with Starwood Hotels Resorts Worldwide to settle a lawsuit involving the alleged misappropriation of trade secrets.
Under the terms of the settlement, Hilton Worldwide agrees to certain business restrictions for a period of two years.
Hilton Worldwide regrets the circumstances surrounding the dispute with Starwood Hotels & Resorts Worldwide and is pleased to bring an end to this prolonged litigation, said Christopher J. Nassetta, president and chief executive officer, Hilton Worldwide in a statement.
In April 2009, Starwood filed a lawsuit against Hilton Hotels Corporation accusing former Starwood executives, Ross Klein (Global Head of Hilton Luxury) and Amar Lalvani (, Global Head of Hilton Luxury & Lifestyle Brand Development) of stealing large amounts of highly confidential Starwood information.
The two executives shifted to Hilton to start a new brand of hotels in June 2008 following its highly leveraged $20 billion plus acquisition by Blackstone Group.
The lawsuit alleged that the two employees took thousands of electronic files and confidential information about Starwood and used them in the development of a new Hilton hotel line called 'Denizen'.
As per the terms of agreement filed with the court, an independent monitor is to be appointed to ensure that Hilton does not use any Starwood information.
The agreement also forbids Hilton from either buying or franchising any Starwood Lifestyle Brand hotel that Starwood operates.
In addition, it also prevents Hilton from hiring any Starwood employee for its Hilton Luxury & Lifestyle Brands Group including Waldorf Astoria Collection, Conrad Hotels & Resorts and Denizen for a period of two years. Also, the agreement forbids Hilton from launching another brand similar to Denizen.