Some of TCW Group's Trade Secret Claims Against Investment Wunderkind Jeffrey Gundlach Going to Jury
We've blogged about this matter before. Law360 is reporting that a judge in California has sent most of the claims and counter-claims between these parties to the jury, including trade secret misappropriation claims against Mr. Gundlach and his cohorts.
TCW, a unit of Societe General that manages more than $120 billion in assets, filed suit against Jeffrey Gundlach and three other former TCW officers in January 2010, claiming they spent months plotting to leave the firm to form management company DoubleLine Capital LP, pilfering information about clients and trading in the process. DoubleLine is also named as a defendant.
According to the complaint — which alleges breach of fiduciary duties, unfair competition, misappropriation of trade secrets, breach of confidence and other claims — Gundlach was fired for his increasingly unprofessional behavior.
The complaint further described Gundlach as unfit for his duties, alleging that after he was terminated, a search of his offices turned up several items of drug paraphernalia and containers of marijuana — some explicitly labeled “marijuana” — as well as dozens of pornography items and 12 unspecified sexual devices.
Gundlach filed a cross-complaint in February 2010, claiming that TCW broke an oral agreement and improperly fired him in order to avoid paying him between $600 million and $1.25 billion for his past and future work. Three former officers named in TCW’s suit joined the cross-complaint, which alleges several breach of contract claims.TCW moved for summary judgment to throw out the cross-complaint, arguing that an oral contract was never formed, and that even if it was formed, TCW had cause to terminate the agreement for gross misconduct.
Judge West denied the motion, finding there were “myriad triable issues of material fact precluding summary judgment.”
Gundlach and the other cross-complainants filed a more limited motion for summary judgment, asking the court to strike down TCW’s claims for breach of confidence and violation of a California penal code section on the grounds that the claims were both preempted by a California trade secrets law under which TCW is also suing.
Judge West agreed, striking down the two causes of action.