(Bloomberg) -- Bridgewater Associates said that two former executives who have accused the world’s largest hedge fund of favoritism, age and sex discrimination turned to court and the media in a bid to secure a “large payout.”

Ex-Bridgewater partners Jeff Gardner and Paul Ross filed a petition in Connecticut state court last month, seeking documents linked to a 2023 restructuring that ousted them from their roles, and about about the handling of Chief Executive Officer Nir Bar Dea’s romance with another employee. Such a move is generally considered a precursor to suing for damages.

But in a response to the petition ahead of a hearing Monday, Bridgewater said that Ross never complained about discrimination until March 2023, only a day before his termination was scheduled to take effect. His dismissal was put on hold while Bridgewater investigated his allegation, according to the court filing.

“Anticipating that his employment was about to be terminated, Ross, along with his attorney, embarked on a campaign to generate negative publicity for Bridgewater designed to pressure the firm to agree to more generous severance terms,” the hedge fund said in a court filing.

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In a response filed on Saturday night, Ross and Gardner called Bridgewater’s legal maneuvers “a transparent tactic designed to disrupt the orderly flow of the proceedings.”

Bridgewater “wants to deflect attention from its unlawful and discriminatory conduct in terminating” them, Ross and Gardner said in their latest filing. “Such conduct reveals the dysfunction and corruption of its internal systems running up to the highest levels of the firm, including the Chief Executive Officer, Nir Bar Dea, and the board of directors.”

In separate filings in federal court, Bridgewater sought to have the state court case put on hold, arguing that both men were obligated under their employment contracts to take any dispute to arbitration. Patrick Shea, a lawyer for Bridgewater, said at the hearing Monday that the arbitration proceedings are scheduled to start as soon as Thursday.

Monday Hearing

At the hearing Monday, a state judge gave Gardner and Ross until April 8 to respond to Bridgewater’s request for a delay in the court proceedings. But lawyers for the men said Bridgewater was simply trying to avoid turning over the documents they sought. 

“The timing of this was set to derail the process,” Brendan O’Rourke, their lawyer, said at the conference. “We have time sensitive claims, we need the information.”

O’Rourke called Bridgewater’s attempts to get a delay in both state and federal court “forum shopping.” 

“This is a multibillion dollar hedge fund that waited until Friday to file this motion,” O’Rourke said. “This is really bullying tactics by a deep-pocketed entity.”

Gardner, who had worked at the firm for almost three decades, and Ross, who had been there for nearly 20 years, were fired last year. They had accused Bridgewater in their state court petition of discrimination after Bar Dea’s former romantic partner Erin Miles and her ex-fiance Sean Macrae were elevated in last year’s shuffle. The petition also alleges that the firm retaliated against them for complaining about the firm’s performance as its flagship strategy has struggled for most of the past decade.

‘Broad Restructuring’

But in its state court case filing, Bridgewater said that Ross was given three justifications in February 2023 for his termination as part of a “broad restructuring.” Among the reasons, Bridgewater said that Ross didn’t have enough experience as an investor and that his “multi-million dollar compensation package could not be justified in light of the need to make reductions.”

Bridgewater said that Gardner was offered multiple positions to stay at the hedge fund, but turned them all down and “insisted on leaving.” The firm said that when he had first expressed a desire to leave in early 2023, he had demanded an “extremely large” severance payment.

“He effectively quit and now he wants Bridgewater to pay him a huge severance,” Shea said.

In separate legal filings in federal court related to arbitration, Bridgewater said that Gardner and Ross had agreed to a “simple but mandatory” process as part of their employment agreements that required any claims to be heard out of court. 

The cases are Bridgewater Associates LP v Gardner, 24-cv-399, and Bridgewater Associates LP v Ross, 24-cv-398, US District Court, District of Connecticut (New Haven.)

--With assistance from Katherine Burton.

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