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

Thank you for your professional assistance with this matter. You are very good at what you do.

John T.

LATEST NEWS AND ARTICLES

February 27, 2026
Eighth Circuit Rejects Emergency Injunction in Advisor Departure Dispute

A federal appeals court ruled against an advisory firm seeking immediate, injunctive relief after a team of advisors left with hundreds of millions in client assets.

February 26, 2026
FINRA Bars Former Cambridge Advisor After Refusal to Cooperate With Communications Probe

A former advisor affiliated with Cambridge Investment Research has been barred from the securities industry after declining to comply with a regulatory investigation, according to the Financial Industry Regulatory Authority (FINRA).

February 25, 2026
Advisors Increase Crypto Allocations as Merrill Lynch Warns of Significant Risks

Financial advisors are placing more client assets into digital currencies, even as major firms caution investors about the asset class's volatility and speculative nature.