Noncompetes face wider scrutiny

The Federal Trade Commission moved against Rollins on April 15, ordering the pest-control company to stop enforcing noncompete clauses on more than 18,000 workers nationwide. (ftc.gov) The agency said Rollins used the clauses for employees ranging from managers to technicians, and filed an administrative complaint alongside a proposed consent order now open for public comment. (ftc.gov) Rollins is the parent of Orkin, and the Federal Trade Commission said the order would bar the company from entering, enforcing, or threatening to enforce noncompetes against workers who are not senior executives. (ftc.gov) A noncompete is a contract term that can block a worker from joining a rival or starting a competing business after leaving a job. The Rollins case lands after a federal court in Texas blocked the Federal Trade Commission’s broader nationwide noncompete rule in 2024, leaving the agency to pursue company-by-company cases instead. (ftc.gov; ftc.gov)) States are tightening their own rules at the same time. In Virginia, a 2026 bill expands the state’s existing ban by adding health care professionals to the categories of workers who cannot be bound by a covenant not to compete. (lis.virginia.gov) Virginia’s change applies to contracts entered into on or after July 1, 2026, under an amended section of the state labor code that already barred noncompetes for certain lower-wage employees. (lis.virginia.gov; lis.virginia.gov) Washington went further this year. Engrossed Substitute House Bill 1155, signed as Chapter 149, Laws of 2026, takes effect June 30, 2027, and rewrites the state’s noncompetition law to broadly prohibit noncompete and nonsolicitation agreements, with specified exceptions. (leg.wa.gov; lawfilesext.leg.wa.gov) Washington’s statute says the chapter should be read liberally to support workforce mobility and narrowly for exceptions, a signal that employers will face a tougher standard if they try to restrict departing workers there. (app.leg.wa.gov) The result is a state-by-state map that is getting harder to navigate. A clause that survives in one state can trigger penalties, enforcement action, or outright invalidation in another, especially for hourly workers, lower-paid staff, and licensed professionals. (law.lis.virginia.gov; app.leg.wa.gov; ftc.gov) That is pushing employers toward narrower tools such as confidentiality, trade-secret, and customer nonsolicitation clauses, while regulators keep testing how far they can go against broad restraints on workers changing jobs. (ftc.gov; lawfilesext.leg.wa.gov)