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Maryland Live sues MGM Resorts over top-tier customer list

MGM National Harbor Construction. (The Daily Record / Maximilian Franz)

MGM National Harbor Construction. (The Daily Record / Maximilian Franz)

Maryland Live Casino has filed a federal lawsuit against rival MGM Resorts International, alleging several MGM employees who previously worked at Maryland Live poached the casino’s trade secrets — namely, lists with names of at least 3,000 high-rolling customers — while working as members of its “relationship marketing team.”

After the employees were caught, they signed documents stating that they had destroyed or returned all copies of the lists to Maryland Live, according to the suit. However, the employees then took jobs with MGM – which will soon open its new casino at National Harbor – in violation of confidentiality and non-compete agreements, according to the lawsuit, filed Friday in U.S. District Court in Baltimore.

“The individual Defendants then took these same unlawfully retained trade secrets to go work for a subsidiary of MGM and solicit their former Maryland Live! customers,” the suit states. “The corporate Defendants have 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.”

In a statement, MGM Resorts called the lawsuit “baseless” and accused Maryland Live of threatening former employees with “unenforceable non-compete provisions.”

“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 company said.

Carmen E. Gonzales, director of communications for Maryland Live, said Friday that the casino would not be providing further comment on the lawsuit.

Identical roles

The employees — Dung Nguyen, Julie Du and Young Suh — were all part of Maryland Live’s “player development” staff, according to the suit. As casino hosts, they were responsible for providing customers in the casino’s upper tier membership levels, called the Chairman’s Club and Black Card tiers, with transportation and entertainment, as well as assisting them with customer service issues. They also had access to customers’ contact information and the incentives they were provided to gamble, such as meals, transportation and gifts.

All three had signed an acknowledgement of the company’s policies, including a confidentiality and non-disclosure section prohibiting them from sharing trade secrets, the suit states.

Maryland Live learned late last year that MGM was soliciting its casino hosts for employment at National Harbor, which is set to open in December, the suit states. Each of the defendant employees was given an amended employment agreement to sign, but they refused. Nguyen, Du and Suh were then placed on administrative leave and given until Jan. 31 to sign the agreement or be terminated, the lawsuit states.

After the employees’ initial refusal to sign the agreement, Maryland Live began investigating Nguyen, Du and Suh and found evidence that they had downloaded company trade secrets onto their own electronic devices, according to the suit.

The employees were fired Jan. 31, and as part of negotiations over their severance payments, they signed a release stating that they would return or destroy all copies of the trade secrets and would abide by all post-termination provisions of their employment agreement, including a no-solicitation section prohibiting them from contacting Maryland Live’s customers for two years, the suit states.

But each of the employees then took jobs as marketing executives with Destron Inc., a subsidiary of MGM Resorts, fulfilling roles that were essentially identical to their previous jobs at Maryland Live.

An attorney for Maryland Live sent a letter to MGM Resorts, warning that the employees were violating their agreements by working at the rival casino, the complaint states. MGM responded that it would “instruct” the employees not to violate their agreement but also confirmed the employees were still in possession of trade secrets that had “synced to their cellphones,” the suit states.

The case is PPE Casino Resorts Maryland LLC d/b/a Maryland Live! Casino v. MGM Resorts International et al., 1:16-cv-02654-CCB.

Maryland Live filed a similar lawsuit two years ago against a former executive who took a job at Horseshoe Baltimore Casino prior to its opening. The executive also was accused of taking a list of Maryland Live’s most valuable customers in violation of the Maryland Uniform Trade Secrets Act.

A federal judge ordered the executive to return the list to Maryland Live; the case was ultimately dismissed in April 2015, according to online court records.