Hilton's Denizen Employees Could Face Criminal Charges
The Wall Street Journal reported this morning that Hilton Hotels and its executives accused of stealing proprietary W Hotel information to create their now dead-in-the-water hotel brand Denizen Hotels, could face criminal charges.
The grand jury is part of a six-month-old Justice Department probe into allegations that Hilton, which is owned by private-equity firm Blackstone Group, used trade secrets taken by former Starwood executives, who defected to Hilton last year, to develop its own luxury brand to compete with Starwood's successful W chain.
About 30 Hilton employees and executives have either been fired or placed on leave. Ross Klein, the former president of Starwood Hotels who defected to Hilton and was in charge of the Denizen development, was initially place on paid leave with Hilton. However, he was recently replaced by John Vanderslice as Hotels magazine reported last month.
But there is a chance that even if Hilton as a corporation is not criminally charged, the individual employees could be prosecuted themselves.
We can't blame Starwood for going all pitbull on Hilton and its employees, especially Ross Klein who probably took most of the proprietary information from them. We doubt he'll work in the hotel biz again. Yet, criminal charges might seem a little too vengeful. It's not like a Denizen hotel actually opened, now did it? All we got were some sketchings like the one above. And we still don't have an answer as to why balloons on a bike would be present in the lobby. In our really-unprofessional-hotel-law opinion, Hilton should cough up some money in the civil lawsuit and Starwood should call it a day.
Oh and just in case you're wondering, the Denizen Hotels Twitter Feed has been closed.