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Regulation and Compliance > Litigation

Ex-Creative Planning Employees Sue Over Non-Compete Agreements

By Melanie Waddell

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A new lawsuit filed by four former Creative Planning employees claims that their non-compete agreements with the Overland Park, Kansas-based firm illegally restrain them from working elsewhere in the industry.

The suit was filed Monday in the Superior Court of the State of California County of San Diego by Natalie DeWindt Cesmat, Darien Horton, Carleen Acosta and Monica Suzara, all of whom worked in Creative Planning’s San Diego office.

Creative Planning struck a deal on Monday with Goldman Sachs for the RIA to buy Goldman’s Personal Financial Management business, formerly United Capital, for an undisclosed sum.

“Until very recently, Plaintiffs were all employed by Creative Planning as financial professionals in Creative Planning’s San Diego office,” the suit states. Cesmat and Horton were employed as financial planners, and Acosta and Suzara were employed as administrative employees, according to the suit.

As of this year, Cesmat and Horton are now employed at Cascade Financial Partners in San Diego.

According to the suit, all of the plaintiffs “wish to continue working in California as financial professionals, but their employment agreements illegally restrain them from doing so.”

The suit contends that the “unlawful provisions in the employment agreements of Cesmat and Horton include, without limitation,” non-competition covenants that, among other things, effectively prohibit Cesmat and Horton from working in the financial industry and from soliciting business from Creative Planning’s clients and prospective clients for two years.

The Cesmat employment agreement also contains a social media ban “that requires Cesmat to affirmatively ‘disconnect’ from her clients on LinkedIn,” the suit states.

The employment agreements also include covenants “that purportedly grant Creative Planning ownership of all client relationships Cesmat and Horton developed or maintained while employed by the company,” as well as “choice-of-law covenants that substitute Kansas law for California law.”

Cesmat and Horton are also required to provide Creative Planning “with four weeks’ notice of their resignations, even though they were ‘at-will’ employees,” the suit states.

Creative Planning has not responded to a request for comment.

Credit: Adobe Stock

Melanie Waddell

@Think_MelanieW

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