UPDATED: 7:30 a.m. Eastern Standard Time 6 April 2012
REPORT FROM THE U.S.—Hersha Hospitality Management LP has dropped a suit against two former employees and their new employer, The Procaccianti Group. The suit claimed the employees took sensitive information froom Hersha to their new positions at TPG.
A 21 March filing in U.S. District Court reads that the individual defendants will either permanently delete or return any information taken from Hersha. Each party in the case will pay their own court costs and fees.
REPORT FROM THE U.S.—Hersha Hospitality Management LP has filed suit against two former employees and their new employer, claiming the former employees allegedly could have stole thousands of confidential documents before leaving to take their new jobs.
In a 17 October filing in U.S. District Court, Hersha said the employees engaged in a “web of deception” in their final days at Hersha before leaving for positions at The Procaccianti Group, a private real-estate investment company. Before leaving, Hersha said in the filing, the two recruited two other key Hersha employees to also leave. The two denied recruiting the other executives, Hersha said in the filing.
By way of a computer forensic examination, Hersha also found the two former employees potentially stole “thousands” of sensitive computer files.
“(Hersha) is now faced with the real possibility that its direct competitor, TPG, could have access to its most important competitive secrets and strategies,” Hersha officials wrote in the filing. “Upon information and belief, TPG encouraged this conduct by offering the former (Hersha) employees substantial raises in a blatant effort to harm (Hersha) by raiding its top managers and by inducing them to commit wrongs.”
A call to TPG president and CEO James A. Procaccianti was returned by the company’s director of communications Ralph Izzi, who said it is TPG’s policy to not comment on pending litigation. A Message left by HotelNewsNow.com with Hersha president and CEO Naveen P. Kakarla was not returned by deadline Friday.
It is the policy of HotelNewsNow.com to not identify individuals named in lawsuits until the Court has accepted evidence in the case.
The case bears a striking resemblance to the Hilton Worldwide-Starwood Hotels & Resorts Worldwide corporate espionage case that settled last December.
In its lawsuit, Hersha said it wants the Court to help the privately-held independent hotel management company recover any lost information and for “damages for the substantial harm that has occurred, and will continue to occur, before Defendants’ illegal conduct is enjoined.”
Hersha Hospitality Management manages the majority of hotels owned by Hersha Hospitality Trust, a public hotel real-estate investment trust, but Hersha Hospitality Trust does not own or control Hersha Hospitality Management. Hersha Hospitality Trust is not a party to the lawsuit and is not involved in the proceedings.
According to its website, Cranston, Rhode Island-based TPG has more than five dozen hotels in its portfolio, including such brands as Hilton, Holiday Inn, Comfort Inn, Sheraton, Westin, and Marriott. HHM’s portfolio, meanwhile, includes nearly 80 upper-upscale, upscale and midscale-branded hotels encompassing brands such as Holiday Inn, Hilton Garden Inn, Courtyard by Marriott and Hampton Inn & Suites.