Hilton Gets Subpoena in Starwood's Industrial Espionage Lawsuit

Just when you thought all hotel news was about falling prices and the recession, Starwood Hotels & Resorts Worldwide Inc. kicks it up a notch, announcing late last week that it's suing Hilton Hotels Corp. and its employees for stealing more than 100,000 documents and files from Starwood to create their own luxury brand hotel called Denizen.

Former Starwood executives, Ross Klein and Amar Lalvani, are being accused of leaving the company and smuggling industry secrets to its rival, Hilton Hotels. Today news comes that Hilton has been served with a federal grand jury subpoena and two executives accused in the case are on paid administrative leave. Hilton also sent out a press release saying it was temporarily halting any further development of the Denizen brand.

To further muddy the affair, the whole luxury and lifestyle development team has been placed on administrative leave, presumably because so many are ex-Starwood employees.

I don't know what happened between the former employees and their new employer, but I am glad that Starwood went public with their lawsuit and accusations. Corporate spying has always existed -- from seemingly innocuous questions in job interviews to blatantly stealing information -- yet I think most of us are surprised each time it appears. Companies want to know what its rivals and competitors are doing. Company secrets are held as long as possible, but sometimes they can be thwarted by departing or vengeful employees.

I do have one question, though. In most job interviews, you aren't supposed to badmouth your boss, so why would any company want to hire someone, obviously unethical, bringing stolen company secrets? It seems to me that if the allegations are true, then Hilton may have other worries than just the Starwood lawsuit.