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Hotel Chain Sues Search Firm for $5 million

December 15 2011

A New York hotel chain operator announced it filed a lawsuit against an executive search firm alleging fraudulent misrepresentation. The lawsuit seeks punitive damages of $5 million.

The Amsterdam Hospitality Group said it sued Marshall-Alan Associates, a New York executive search firm, in New York State court. The lawsuit alleges the executive search firm placed senior executives at the hotel operator only to recruit them away to other hospitality firms.

In one case, the lawsuit’s complaint said the hotel operator hired a president of hotel operations and paid a fee to the executive search firm of $68,750 in June 2009. The person left seven months later to join another hospitality firm and Marshall-Alan was involved in the recruitment, according to the lawsuit. The Amsterdam Hospitality Group’s lawsuit also alleged the hotel operator had to defend a lawsuit during the seven months the president of the hotel operations was on board. That suit had been filed by the person’s former employer, who alleged the person violated a restrictive covenant in an employment contract, according to the lawsuit.

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