This particular situation certainly should be better handled privately as an internal issue, but I have no objection to emplyees asking questions and discussing the StarHOT program if we can help and if we can learn. I would hope that they would be questions that would not get an employee in trouble, though. The OP might could have asked, "Are StarHOT reservations guaranteed? What are the cancellation policies for StarHOT rates?"
StarHOT rates are not only for employees. They are also for families of employees. So it's nice that there is a public link with answers to these questions.
StarHOT T&Cs
StarHOT rate search site
From the T&Cs:
PROGRAM ADMINISTRATION
Important note to hotels using a mandatory guarantee. The non-guaranteed reservation option is possible due to an enhancement made to StarLink. StarLink will override the mandatory guarantee policy for reservations made for the StarHOT rate plan and allow non-guaranteed reservations to be booked, except at resort hotels that require a mandatory deposit at the time of booking. This is a benefit for our associates who do not have access to a credit card at the time of reservation. Hotels must hold and honor these reservations until the designated 4:00 or 6:00 p.m. hold time. After this time, the reservation may be released unless the associate has called with a credit card or mailed a deposit.
Restrictions – Rooms are provided on a space available basis. If occupancy rates for the date(s) requested are at 80% or forecasted to be at 80% or greater then the hotel may close out StarHOT. If occupancy rates are less than 80% or forecasted to be less than 80%, properties are required to set aside a minimum of 5% of their room inventory for associate use. Discounted rooms may not be granted during any special events, such as New Year’s Eve, Super Bowl, Mardi Gras, etc. Blackout dates and other individual property restrictions may apply. We reserve the right to change or cancel this benefit at any time.
As best I can tell, the OP's reservation should not have been cancelled.
OP, I suggest that you handle this internally. If it is resolved (and especially if it is resolved in your favor), it would probably be a good idea to update this thread to say so. For your own benefit, you might wish to edit or delete your opening post. I would think that Starwood would prefer to keep its internal StarHOT faults private.
Sebastian13, welcome to FlyerTalk! I hope you'll continue to contribute to the forum. It's always nice to have another Starwood employee that can share information, answer questions, and learn from the other FTers.