On April 15, 2026, the Federal Trade Commission (FTC) targeted the widespread use of noncompete agreements by Rollins, Inc., the parent company of pest-control brands including Orkin, HomeTeam, and Critter Control. In a proposed consent order, the FTC required Rollins to stop enforcing non-compete restrictions for more than 18,000 employees for the next 10 years and provide notice to the affected employees that they have been released from their non-compete restrictions. Notably, the consent order excludes and does not prohibit non-compete agreements for Rollins’ directors, officers or other senior leaders (defined as employees who exercise significant policy-making authority) who are eligible for grants of equity or equity-based interest as a benefit of their employment.
Rollins drew the FTC’s ire with its overly broad approach in requiring non-competes for a wide range of employees and not just key management employees or those with access to sensitive information. The non-compete agreements typically barred employees from working in the pest control industry for two years following the termination of their employment anywhere within a 75-mile radius of any of Rollins’ 700 + locations across the United States. The FTC alleged that Rollins’ employees had minimal ability to negotiate their non-compete agreements, received no extra compensation for signing them, and were often not fully aware of their consequences.
Rollins aggressively enforced its non-compete agreements against former employees who attempted to work following the termination of their employment. According to the FTC’s complaint, Rollins sent “hundreds of threatening cease-and-desist letters” to former employees and filed lawsuits to bar their former employees from working for competitors. The FTC emphasized the impact of these practices on frontline and lower-wage roles, such as technicians and customer-service staff.
Along with the proposed consent order, the FTC issued warning letters to thirteen other companies in the pest-control industry, signaling that the agency is actively scrutinizing non-competes it views as overly broad or applied to employees regardless of their roles in the company. The warning letters urged the companies to review their employment agreements and cautioned them about potential harm to worker mobility and competition.
Potential Problems with Non-Competes:
- Avoid one-size-fits-all non-competes. Non-competes that apply to virtually all employees, regardless of job duties, may be unenforceable and may attract the scrutiny of the FTC.
- Tailor duration and geography to business needs. Be certain that non-competes are geographically limited or are tied to the employee’s role, territory, or customer relationships.
- Consider less restrictive alternatives. Narrow non-solicitation clauses that restrict solicitation of customers or employees and confidentiality and trade-secret protections may address risk with less competitive impact.
Employers Should Take Action
Although the FTC withdrew its proposed rule restricting non-competes, it has not abandoned its efforts to review non-compete clauses that improperly restrict competition. The Rollins enforcement order and the FTC’s warning letters suggest that the FTC continues to scrutinize non-competes that are not narrowly tailored, apply broadly to all employees, or are overly restrictive. Companies with expansive, standardized non-compete requirements, especially if they affect low-income employees or employees lacking access to trade secrets or sensitive information, may see increased enforcement. Employers should review their non-competes to make certain that are narrowly tailored to protect only legitimate business interests so that they do not attract the attention of the FTC. Please reach out to your employment team for assistance.
