Noncompetes Under Pressure

A Federal Trade Commission case against Rollins and a new Virginia law are narrowing how employers can use noncompete clauses in 2026. (ftc.gov) (lis.virginia.gov) The FTC said on April 15 that Rollins, the parent of Orkin, HomeTeam, and Critter Control, must stop enforcing noncompetes against more than 18,000 workers nationwide. The agency said the company used the clauses across a wide range of jobs, including pest-control technicians and customer-service representatives. (ftc.gov) According to the FTC, Rollins agreements typically barred employees from working in pest control for two years after leaving and within a 75-mile radius of one of the company’s more than 700 U.S. locations. The FTC also said Rollins sent hundreds of cease-and-desist letters to former workers. (ftc.gov) The Rollins order is not the same as the FTC’s 2024 nationwide noncompete rule. The FTC says that rule is not in effect, was blocked by a court on August 20, 2024, and the agency moved in September 2025 to dismiss its appeal. (ftc.gov 1) (ftc.gov 2) That leaves employers facing two pressures at once: case-by-case federal enforcement and a growing patchwork of state limits. The FTC said it also sent warning letters to 13 other pest-control companies after the Rollins case. (ftc.gov) Virginia added another restriction on April 13, when Gov. Glenn Youngkin approved Senate Bill 170. Starting July 1, 2026, a noncompete in Virginia is unenforceable if an employer fires a worker without cause and does not provide severance or another payment disclosed when the covenant was signed. (lis.virginia.gov) Virginia already barred noncompetes for low-wage employees, and a 2026 amendment extended that ban to health care professionals. State law still allows nondisclosure agreements aimed at protecting trade secrets and other confidential information. (lis.virginia.gov) The details matter because a noncompete is different from a confidentiality clause or a customer non-solicit term. Virginia’s statute defines a noncompete as a term that restricts a worker’s ability to compete after leaving, while carving out some limits that do not block a former employee from serving a customer the worker did not solicit. (lis.virginia.gov) For companies, the immediate problem is less about one federal rule than about how many existing contracts still assume broad post-employment restrictions will hold up. The FTC has now put one large employer’s forms, notice practices, and enforcement letters at the center of an antitrust case instead of a routine contract dispute. (ftc.gov 1) (ftc.gov 2) The next deadline is May 22, 2026, when public comments on the proposed Rollins consent order are due. Until then, the signal from Washington and Richmond is the same: broad noncompetes are getting harder to defend, even without a nationwide ban in force. (federalregister.gov) (ftc.gov)