The out-of-court settlement calls in part for Hilton to halt plans for its own lifestyle brand for at least two years.
NEW YORK--The Hilton/Starwood corporate espionage case has been settled out of court.
A 13-page filing Wednesday in United States District Court in New York ended the court battle that began in April 2009 when Starwood Hotels & Resorts Worldwide accused top executives at Hilton Worldwide—including former Starwood executives Ross Klein and Amar Lalvani—of stealing Starwood’s plans for a lifestyle concept intended to launch at its W properties, “The Zen Den.” Hilton eventually unveiled its own brand, which it dubbed “Denizen.”
Included in the settlement’s requirements:
• All Starwood documents (previous filings alleged hundreds of thousands of electronic documents were pilfered) must be returned to Starwood;
• Until 1 January 2013, Hilton cannot acquire any Starwood lifestyle brand and Hilton also is barred from acquiring or developing any lifestyle or branded boutique hotel product that would occupy the same market space as its former Denizen Hotels & Resorts brand.
• Until 1 January 2013, Hilton cannot hire any Starwood employee to work within or above the Hilton luxury and lifestyle brands group.
• An independent monitor will be established to ensure compliance.
Chris Nassetta, president and CEO, Hilton Worldwide
“Hilton Worldwide regrets the circumstances surrounding the dispute with Starwood Hotels & Resorts Worldwide and is pleased to bring an end to this prolonged litigation,” Hilton president and CEO Chris Nassetta said in a statement. “Hilton Worldwide is committed to fair, ethical and robust competition in the marketplace, and we will continue to focus on what we do best—providing exceptional services for all of our guests around the world.”
Nassetta, along with at least 44 other Hilton executives, were accused by Starwood of condoning the actions taken by Klein and Lalvani. Hilton officials also were accused of trying to cover up the theft, in part by “scrubbing” or removing Starwood labeling from the reports that were taken so as to make them less likely to arouse suspicion.
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A Hilton spokesman declined to elaborate on the release. Starwood officials could not immediately be reached for comment.