Federal Judge Strikes Down Hightower's Non-Compete Agreement in California

Posted on March 4th, 2025 at 10:51 AM
Federal Judge Strikes Down Hightower's Non-Compete Agreement in California

From the desk of Jim Eccleston at Eccleston Law

A federal judge in Wilmington, Delaware, ruled against Hightower Advisors in its effort to enforce non-compete agreements against a former advisor in California who sold his firm to Hightower.

AdvisorHub reports that District Court Judge Richard G. Andrews barred Hightower from preventing Darren Reinig from operating a competing advisory firm. The judge found that California law invalidates non-compete agreements, undermining Hightower’s attempt to block Reinig from soliciting former clients. Reinig, who sold his practice to Hightower in 2019, launched a new advisory firm in February 2023.

However, Reinig’s legal battle is not over. Judge Andrews left the door open for Hightower to pursue claims for misappropriation of trade secrets.

According to AdvisorHub, Hightower argued that its non-compete provisions were enforceable under California law, which allows restrictions when a business has been sold. However, Judge Andrews determined that barring Reinig from working in investment advisory services nationwide was overly broad and unenforceable.

A Hightower spokesperson stated that the firm is evaluating its next steps and will continue arbitration proceedings, where it seeks a permanent injunction and damages.

 

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

Return to Archive

TESTIMONIALS

Previous
Next

I want to extend a tremendous thank you for your dedication, professionalism, hard work and patient demeanor through this challenging time. It was enjoyable interacting with everyone on your team, this certainly helped while dealing with the situation and working towards resolution.

Dan M.

LATEST NEWS AND ARTICLES

April 29, 2025
Merrill Lynch Fires Veteran Advisor for Ignoring Mandated Commission Discounts

Merrill Lynch has terminated Daniel G. Diaz, a 37-year industry veteran, for refusing to apply commission discounts to certain client accounts as instructed by management, according to his Central Registration Depository (CRD) record.

April 28, 2025
Former Morgan Stanley Advisor Barred After Fraudulent Check Allegations

Roger A. Gallagher has accepted an industry bar from FINRA rather than cooperate with a regulatory investigation. According to a FINRA Acceptance, Waiver, and Consent letter (“AWC”).

April 25, 2025
Rosedale Advisory Firm Fined for Role in NCAA Player Referral Bribery Scheme

The Securities and Exchange Commission (SEC) has finalized a cease-and-desist proceeding against Rosedale, a former SEC-registered investment adviser, for violations of the Investment Advisers Act of 1940.