FTC Noncompete Enforcement Turns to Pest Control

On April 15, 2026, the Federal Trade Commission (FTC) ordered Rollins, Inc. (Rollins) – a pest-control company that serves both residential and commercial clients across the United States – to cease enforcement of its employee noncompete agreements and inform its employees that they are no longer bound by these agreements.  In the same press release, the FTC noted it also sent warning letters to 13 other companies in the pest-control industry “strongly encourag[ing]” them to review their employment agreements to ensure antitrust compliance.  The present action against Rollins and the warning letters to pest control companies are the latest in a string of FTC enforcement actions targeting noncompete agreements.  For more background on the FTC’s noncompete enforcement activity see our prior blog post.

Key Takeaways

• Scrutiny of noncompetes is not limited to a particular industry. 

  The FTC’s recent noncompete enforcement actions include a consent agreement in the pet cremation industry and warning letters to healthcare employers.  Other targeted industries have included glass container manufacturers and security guards.  While the FTC has expressed particular interest in scrutinizing noncompetes for healthcare and minimum wage employees, no industry should expect to fly under the radar.  Whether the FTC became aware of Rollins through its request for information on noncompetes is unknown, but the message from Chairman Andrew Ferguson is clear: “The days of unreflective, unjustified, and anticompetitive noncompete agreements are over.”

• Requiring all employees to sign noncompetes may invite scrutiny. 

  The FTC takes a dim view of noncompete agreements applied to all employees regardless of seniority or access to proprietary information.  In its complaint against Gateway Services, Inc. (Gateway), the FTC noted that Gateway required “all newly hired employees” to sign noncompetes “without any individualized consideration of an employee’s role.”  Gateway’s noncompetes were nationwide and expired after one year.  Rollins’ agreements prohibited all employees from working in the pest-control industry near their Rollins location for two years.  With a longer duration but a more targeted geographic scope, the FTC still found these terms to be overbroad, primarily because they applied to virtually all employees regardless of role or responsibilities.

• Non-solicitation agreements and confidentiality protections remain available, if narrowly tailored. 

  The FTC’s latest noncompete action is not a wholesale prohibition on narrowly tailored post-employment restrictions.  Both the order and the complaint acknowledge that “[n]arrowly tailored non-solicitation agreements are available to promote Rollins’ continued investments in growing and maintaining customer relationships and client goodwill.”

Background on the Rollins Noncompete Order 

Rollins – the parent company of Orkin, HomeTeam Pest Defense, and Critter Control, among other brands – operates more than 700 locations across the United States with over 18,000 U.S.-based employees.  As a matter of longstanding policy, Rollins required all newly hired employees to sign noncompete agreements, regardless of their position or responsibilities.  Those agreements typically prohibited former employees from working in the pest-control industry within a 75-mile radius of their prior Rollins location for a period of two years.

The breadth of Rollins’ policy appears to have been a key factor in the FTC’s decision to bring an enforcement action.  The vast majority of its more than 18,000 U.S.-based employees – including many thousands of former employees – were subject to these agreements, with limited exceptions for certain locations.  Rollins has actively enforced these agreements by issuing hundreds of cease-and-desist letters and filing multiple lawsuits against former employees, and, according to the FTC, some employees believed that refusing to sign would cost them their jobs.

The FTC’s complaint charged Rollins with violating Section 5 of the FTC Act, alleging that its noncompete agreements constitute unfair methods of competition. The complaint identified three principal harms: (1) harm to employees through reduced wages, limited mobility, and restricted access to job opportunities; (2) suppression of competition by impeding the entry and expansion of Rollins’ rivals; and (3) deterrence of new small business formation by former Rollins employees.

The FTC also addressed the “less restrictive means” inquiry head-on.  According to the FTC, Rollins’ own conduct undercut any trade-secret justifications for having broad employee noncompetes, as the company published its pest control methods on its website and in YouTube videos.  Further, Rollins itself offers the same level of employee training in jurisdictions where it does not use or enforce noncompetes, which, according to the FTC, suggests that its investment in training does not depend on these agreements.

Under the FTC’s proposed order, Rollins may not enter into, maintain, enforce, or threaten to enforce noncompete agreements with “Covered Employees,” which includes current employees and those employed within the last two years, including third-party contractors.  Rollins must also inform all Covered Employees of the order’s invalidation of its existing noncompete agreements within 60 days.  The duration of the order is 10 years.  Mirroring the approach taken in the FTC’s consent agreement with Gateway last year, this order includes a “Senior Leader” carve-out – allowing noncompete agreements for certain senior employees – and preserves enforceability of confidentiality, trade secret, or non-solicitation agreements.

FTC Warning Letters

Contemporaneously with the Rollins order, Chairman Ferguson penned warning letters to 13 other pest-control companies.  The letters do not allege that recipients have engaged in illegal conduct.  Instead, they urge recipients to conduct a “comprehensive review” of their employment agreements, “immediately . . . discontinue” any noncompetes that are not “reasonably necessary to achieve procompetitive aims,” and provide “clear and accessible” notice to affected workers.

Looking Ahead

The FTC’s action against Rollins, together with the industry warning letters, reinforces three themes that have defined the FTC’s recent approach to noncompete enforcement.  First, the FTC has demonstrated that it will pursue noncompete enforcement across industries.  Second, the Rollins complaint brings further clarity to what the FTC views as insufficient tailoring in the noncompete context.  Duration and geographic scope matter, but the FTC’s central objection to Rollins’ policy was its indiscriminate application across all employee categories without individualized consideration.  Employers that apply noncompetes to low-wage or non-technical employees, particularly those without access to genuine trade secrets or confidential customer relationships, face the greatest exposure.  Finally, the FTC continues to signal that non-solicitation agreements and confidentiality protections remain permissible, provided they are narrowly tailored.  Employers seeking to preserve legitimate protections would be well advised to assess whether their existing agreements could withstand FTC scrutiny under the framework articulated by Commissioner Meador: whether the restraint is reasonably necessary to achieve a legitimate business purpose, whether the employer has market power, and whether the agreement operates as a barrier to entry. 

As the FTC continues its case-by-case enforcement of noncompete agreements, employers should proactively audit their employment agreements with particular attention to employee wage and skill level, geographic and temporal scope, and the availability of less restrictive alternatives.