Gunvor USA LLC has initiated a legal battle challenging the enforceability of a non-compete agreement that could impact its hiring practices and business operations. The complaint was filed by Gunvor USA LLC on September 26, 2024, in the District Court of Harris County against MPG Operations LLC, Millennium Management LLC, and Millennium Partners, L.P. Gunvor is seeking declaratory judgments to clarify the rights and obligations under an employment agreement involving Gary Pedersen, a key employee.
The case centers around Gary Pedersen's intention to resign from MPG Operations LLC and join Gunvor USA LLC. Pedersen, who had been employed by MPG since February 8, 2022, provided notice of his resignation on August 12, 2024. His contract with MPG included a non-compete clause governed by New York law. However, Gunvor argues that this choice of law provision should not be enforced because Pedersen's work was based in Texas and that Texas has a materially greater interest in the matter. Gunvor asserts that applying New York law would contradict Texas's fundamental policy regarding non-compete agreements.
Gunvor further contends that it is not a competitor of MPG or its affiliates. While both companies are involved in trading activities, their business models differ significantly. MPG operates as a multi-strategy hedge fund focused on financial instruments trading, whereas Gunvor primarily deals with oil derivatives and physical commodities trading. According to Gunvor's filing, "MPG competes for investors to provide capital for MPG to invest and manage," while "Gunvor does not seek investors who will invest capital for Gunvor to manage or invest." This distinction is crucial as it forms the basis for Gunvor's argument that employing Pedersen does not breach any competitive clauses within his previous employment agreement.
The plaintiff seeks several declarations from the court: first, that the choice of law provision in Pedersen’s agreement is unenforceable; second, that Gunvor is not considered a competitor under the terms of said agreement; thirdly, that employing Pedersen does not violate any non-compete clauses; and finally, that such employment does not constitute tortious interference with existing contractual relations between Pedersen and his former employer. Additionally, Gunvor requests attorney fees and other costs associated with this legal action.
Representing Gunvor USA LLC are attorneys Jessica Glatzer Mason from Foley & Lardner LLP’s Houston office and J. Michael Thomas from their Dallas office. The case has been assigned Case ID 2024-66484 in the 334th Judicial District Court of Harris County.