FTC orders Rollins to drop noncompetes

The Federal Trade Commission moved to block Rollins from enforcing noncompete clauses against more than 18,000 workers at the pest-control company. (ftc.gov) The agency announced the action on April 15, 2026, and said Rollins had used the clauses across a broad swath of its workforce, including technicians and customer-service staff. The Federal Trade Commission also sent warning letters to 13 other pest-control companies. (ftc.gov) In its complaint, the Federal Trade Commission said Rollins operated more than 700 locations, employed more than 18,000 U.S.-based workers, and required new hires to sign agreements that typically barred them from pest-control work for two years within 75 miles of a Rollins branch. (ftc.gov) The proposed order says Rollins must stop entering, enforcing, or threatening to enforce the covered noncompetes and must notify affected current and former workers that the restrictions are no longer enforceable under the settlement. Rollins signed the consent agreement for settlement purposes and did not admit the complaint’s non-jurisdictional allegations. (ftc.gov) A noncompete is a contract term that limits where someone can work after leaving a job. The Federal Trade Commission is treating some of those clauses as a competition issue in labor markets, not just a contract dispute between one employer and one worker. (ftc.gov) That approach marks the agency’s clearest move away from relying mainly on a nationwide rule that is no longer being defended. In January, Federal Trade Commission officials said they would pursue case-by-case enforcement against noncompetes they see as overbroad or unsupported by a specific business need. (troutman.com) Chair Andrew Ferguson said on April 15 that “not all noncompete agreements are unlawful,” while describing labor-market competition as an enforcement priority. Commissioner Mark Meador, in January remarks summarized by Troutman Pepper Locke, said employers should be able to explain why a noncompete is the only way to protect their interests. (ftc.gov) (troutman.com) The Federal Register notice published on April 22 opened the Rollins consent agreement for public comment through May 22, 2026. That means the order is not the end of the process, but it is already a detailed signal of how the agency plans to challenge broad worker restrictions. (govinfo.gov) For employers, the record in the Rollins case is specific: the agency focused on low-wage and non-managerial roles, standard-form agreements, no added pay for signing, and hundreds of cease-and-desist letters sent to former workers. That fact pattern gives companies a checklist for reviewing which covenants they still use and why. (ftc.gov) The case leaves one plain result already on the table: the Federal Trade Commission is no longer waiting for a single sweeping rule to test noncompetes. It is picking employers, industries, and worker groups one case at a time. (troutman.com)