The battle for a competitive edge among rivals in the highly competitive luxury hotel market has turned ugly between Starwood Hotels and Hilton Worldwide, and shines an important light on the value that businesses place on trade secrets and the lengths they'll go to protect them.

Last April, Starwood sued Hilton for bringing in two former Starwood executives who reportedly defected from Starwood with more than 100,000 internal documents. Starwood claims that Hilton executives at the highest levels condoned the use of the stolen information as Hilton worked to create a luxury hotel to compete with Starwood's `W' hotel chain. Additionally, federal prosecutors are reportedly considering whether Hilton and two former executives should face criminal charges for stealing trade secrets. The Wall Street Journal reports that Starwood's demands go beyond monetary damages and also wants to place Hilton in a "penalty box," preventing the company from developing its own luxury brand for a period of time.

Key employees at successful companies will always be highly coveted hires by industry rivals, but as the Starwood/Hilton saga shows, a worker's knowledge may prove invaluable to their new employers but bringing along actual company secrets can spell real trouble. "When you leave a job, especially when you work in an industry in as much turmoil as the hospitality industry, you have to leave all the confidential material behind," says attorney Richard Barrett-Cuetara of Dallas' Cowles & Thompson.. "And if you learn your new employee has ‘hot goods' you must contact the former employer immediately and quarantine the data until you can return it. A delay on any of those fronts may only help ensure that you will find yourself embroiled in a lawsuit."