A former Hightower advisor is suing the firm, alleging that the non-compete agreement he signed is so sweeping that it’s restricting his ability to gain further employment.

Darren Reinig, a resident of San Diego and a former partner in a Hightower subsidiary, also contends that the non-compete, non-solicitation and non-hire clauses of the agreement are “illegal” and “unenforceable,” according to the suit, filed with the U.S. District Court for the Southern District of California.

The parties are also clashing over the venue of the lawsuit. Reinig wants the case adjudicated in California, while Hightower is pushing for Delaware, where the company is incorporated. In recent years, California has taken a more aggressive stance against non-compete clauses, with a judge in 2022 ruling that Google’s non-disclosure agreements were too broad and illegal.

The lawsuit argues that Hightower’s “restrictive covenants are wide and/or unenforceable under either California or Delaware law.”

The filing said that Reinig, who began managing money for high-net-worth clients in 2006, helped found Delphi Private Advisors, based in San Diego. Reinig is seeking an undisclosed amount in punitive damages. The lawsuit says he has since started his own advisor firm.

Hightower officials did not respond to requests for comment by press time.

“It makes no business sense [for Hightower] to litigate this,” Reinig’s lawyer, Robert Traylor, a partner with Stratege Law in San Diego, said in an interview. “If they lose, it might put all their non-competes at risk.”

Reinig’s lawsuit comes at a time when lawsuits over non-disclosure and non-compete clauses are on the rise, with many of them involving wealth management giants. Hightower is among that group, with $131 billion in assets under management and 130 financial advisory offices in 34 states. As private equity continues to invest in RIA aggregators like Hightower, many advisors fear the RIA world will start to more closely resemble that of litigious Wall Street wirehouses.

In January, the Federal Trade Commission proposed rules banning employers from imposing non-compete clauses, which the agency says stymies business startups and suppresses wages.

In the filed complaint, Reinig argues that “California has a strong public policy against non-competition provisions and expressly bars them, except in the limited context of the sale of a business.”

Reinig worked as a consultant for Hightower affiliate LMDP, an advisory firm with $4.8 billion in assets that was formed in 2019, a product of the Hightower-facilitated merger of LourdMurray, a Beverly Hills, Calif., wealth management firm, and Delphi Private Advisors, Reinig’s company.

Hightower agreed to pay Reinig to move clients to LMDP from Delphi’s San Diego office under a partnership deal that ran from December 28, 2021, to December 28, 2024, according to the lawsuit.

The lawsuit argues that the non-compete clause “purports to bind and prejudice Reinig from legally starting any business that Hightower or any Hightower affiliate may be engaged again or may engage in the indeterminate future.”

Such “patently overboard” language makes it impossible for Reinig or any third party to know whether they can work in any capacity with almost any person or client, according to the lawsuit.

Furthermore, Hightower doesn't want Reinig to compete against the parent company or any of its “direct or indirect subsidiaries” or affiliates, the plaintiff argues in the filing.

This story was updated with comment's from Reinig's attorney.