Jeffrey Gundlach says TCW contracts protected him against firing

Money manager Jeffrey Gundlach testified in a trial against TCW Group Inc. over his 2009 firing that he had negotiated, in contracts going back to 1992, specific conditions under which the firm could terminate him “for cause.”

“I wanted to make sure I couldn’t be fired out of the blue,” Gundlach told jurors Wednesday in state court in Los Angeles. He also said that since 1989, he was entitled to accrued compensation if he was fired by TCW.

Gundlach, 51, who worked at TCW for 25 years and was named Morningstar’s fixed income manager of the year in 2006, says the Los Angeles-based unit of Societe Generale fired him to avoid having to pay management and performance fees for the distressed-asset funds that his group managed and that went “through the roof.” Gundlach seeks about $500 million.

Ten days after he was fired, Gundlach started his own money management firm, DoubleLine Capital. TCW sued in January 2010, alleging that Gundlach and three other former employees stole TCW’s trade secrets to start DoubleLine. TCW’s damages expert testified that the company suffered $344 million in damages from Gundlach’s alleged interference with contracts and $222 million from a claimed breach of fiduciary duty.