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Maryland Live casino has accused MGM National Harbor — its soon-to-open rival on the Potomac — of hiring former Maryland Live hosts who allegedly improperly collected and retained names and contact information from their ex-employer's private database of "high rollers."
The three hosts "misappropriated Maryland Live's trade secrets without authorization and are using them to advance their interests to the detriment of Maryland Live," the Anne Arundel casino said a lawsuit filed last week in U.S. District Court in Baltimore.
Maryland Live alleged that the hosts, also named in the suit, worked with some of the most coveted customers in its rewards program. It says two of the hosts "misappropriated" names and contact information of players in the Chairman Club and Black Card tiers — its uppermost levels. Such players tend to wager large amounts and receive personal attention and free perks.
MGM Resorts and a subsidiary "aided and abetted this whole scheme, hiring the individual defendants with knowledge that they have misappropriated trade secrets and are subject to No Hire/Non-Compete agreements," Maryland Live alleged in the suit, filed last week.
The allegations ratchet up the early competition between Maryland Live, the state's largest casino, and the $1.3 billion MGM National Harbor, which is scheduled to open in December with a 23-story hotel with 308 rooms and suites. Located just south of Washington, near where Interstate 95 crosses the Woodrow Wilson Bridge, MGM is taking direct aim at Virginia, across the Potomac River, where there are no casinos, as well as Washington and Maryland. It also is targeting domestic and international tourists to the capital region.
In a written statement, MGM Resorts called the suit's allegations "baseless."
"Although it is our normal practice to not comment on pending litigation, this lawsuit amounts to nothing more than a thinly disguised attempt to stifle the competition Maryland Live expects from MGM's National Harbor resort and to try to tarnish MGM's reputation in the marketplace," the statement said.
"In addition, Maryland Live is resorting to threatening its current and former employees with unenforceable non-compete provisions in hopes of preventing people from working in other states regardless of whether their new employment would compete with Maryland Live," the statement said. "The allegations in Maryland Live's lawsuit against MGM National Harbor are baseless, and MGM will vigorously defend against Maryland Live's lawsuit."
With the suit, Maryland Live is seeking unspecified damages and an injunction to prevent further "breaches."
In 2014, Maryland Live filed a suit against one of its VIP hosts, alleging that she copied a list of top customers before taking a job at Horseshoe Casino Baltimore. Horseshoe was not named as a defendant, and the employee, Helena Wong, testified she had gathered the names of 19 players in the course of her job — an act she said did not qualify as theft.
In the current suit, Maryland Live asks the court to order "an independent forensics analysis of the personal electronic devices (including all cell phones and computers) of the casino hosts to determine the extent to which trade secrets have been further misappropriated since their original theft in February."
Maryland Live has at least 3,000 customers who are members of various tiers in its rewards program, according to the suit.
Maryland Live had no comment on its suit or MGM's reply, according to a spokeswoman.
The three Maryland Live employees in the suit had the title of "executive hosts" — responsible for catering to high rollers, including arranging for entertainment and transportation. Two were called "Asian Executive Hosts."
Maryland Live said its non-compete agreements barred the former employees from working for a year for MGM National Harbor or any other casino within 75 miles.
MGM said the employees did not violate that agreement because they were hired to work at a subsidiary in Virginia.
"The Former Employees will be employed by Destron at a physical location in Virginia, more than 75 miles from where they worked for Maryland Live! and not in Prince George's County, Baltimore City, or Charlestown, West Virginia," where there are competing casinos, said a June 23 email to Maryland Live from Nathan T.H. Lloyd, an MGM Resorts vice president and general counsel. The email was attached to the suit as an exhibit.
But Maryland Live said in the suit that Virginia "is conveniently located close to MGM National Harbor, and Maryland Live!'s primary customer base. To be sure, Defendants cannot set up phony offices to evade noncompete agreements."
The three hosts were fired by Maryland Live in January after refusing to sign a revised agreement governing non-compete and confidentiality terms.
The Evening Sun
Around that time, according to the suit, Maryland Live had begun an investigation that found that "hundreds of files were unlawfully downloaded" by two of the hosts onto personal electronic devices.
In a June 1 letter to MGM, a Maryland Live attorney said that "we have received credible information from multiple sources" that the hosts "are actively soliciting and calling upon, existing Maryland Live! customers on behalf of MGM, and are using confidential and highly proprietary information obtained during their employment with Maryland Live! to further this goal."
On July 13, each of the hosts sent an email to Maryland Live confirming they were working for Destron and saying they wouldn't violate their agreements with Maryland Live.
"I am writing to provide assurances to Maryland Live that I do not intend to harm its legitimate business interests," said each of their emails, which were included as exhibits in the suit.
"I have abided by and intend to abide by the post-termination provisions of the agreement," the messages said, including confidentiality, non-compete and non-solicitation, "to the extent they are legally enforceable."
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