FTC Orders Rollins, Inc. To Void Employee Non-Competes, Signaling Broader Crackdown

Key Takeaways

• The FTC has not abandoned its focus on non-compete agreements.
• The FTC is actively pursuing overly broad non-compete agreements as potential violations of federal competition law through individual actions.
• The FTC recently entered into a proposed consent order with Rollins, Inc. which would require Rollins to void existing non-competes for more than 18,000 employees and send individualized notices to any impacted employee or former employee confirming the non-compete restrictions are unenforceable.

FTC Enforcement Against Rollins Inc.

The Federal Trade Commission (FTC) has taken enforcement action against Rollins Inc., the parent company of pest control brands such as Orkin, HomeTeam and Critter Control, for its widespread use of non-compete agreements with its employees. In the proposed consent order, the FTC bars Rollins from enforcing or imposing non-compete clauses on the majority of its workers for the next 10 years, effectively eliminating non-compete restrictions for more than 18,000 employees. 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.

The FTC alleged that Rollins required nearly all of its employees, including pest-control technicians and sales representatives to enter into non-compete agreements. These 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 also 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, as alleged by the FTC, 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 workers and filed lawsuits to bar ex-employees from working for competitors. The FTC alleged that these practices had tangible negative effects on job opportunities and worker mobility, and that the Rollins’ use of non-competes harmed competition by impeding the expansion of pest control businesses and deterring employees from starting competing ventures. Facing these allegations, Rollins agreed to a consent order without admitting liability.

The proposed order, approved by a 2-0 Commission vote for public comment, imposes sweeping obligations on Rollins, including barring them from imposing, enforcing or attempting to enforce any non-compete with employees for 10 years, providing personal notice to each employee who was subject to a non-compete that their non-compete is void, and filing detailed annual Compliance Reports with the FTC. The public will now have 30 days to submit comments on the proposed consent order.

The Rollins Order in the Broader FTC Enforcement Landscape

The FTC’s action against Rollins comes on the heels of a broader push by the agency to use antitrust laws to target noncompete agreements. In early 2023, the FTC introduced a proposed “Non-Compete Clause Rule” that would have banned nearly all post-employment non-compete agreements in the U.S. as an “unfair method of competition” under Section 5 of the FTC Act. While the rule garnered significant attention, it was challenged in court and ultimately vacated by a federal judge in August 2024 on the grounds that the FTC likely lacked the authority to issue such a broad rule.¹ In September 2025, the FTC officially withdrew its appeal and abandoned the nationwide non-compete rule.² FTC leadership stated they will continue to target unlawful noncompete agreements using their existing authority.³ The Rollins settlement demonstrates this approach, highlighting the FTC’s use of Section 5 of the FTC Act to address post-employment restraints and restrictive covenants deemed anticompetitive.

What This Means for Employers

Employers should take note: the FTC has not abandoned its focus on non-compete agreements. The agency has shown it will pursue enforcement actions against companies whose non-compete practices it considers unlawful. Moving forward, companies with expansive, standardized non-compete requirements—especially those affecting low-income employees and/or employees lacking access to trade secrets or sensitive information—may see increased enforcement. The FTC’s actions in the Rollins matter also demonstrates its commitment to industry-wide impact. Alongside the consent order, the FTC issued warning letters to thirteen additional pest control companies, putting the entire sector on notice about the potential illegality of certain non-compete practices.

In addition to the FTC’s enforcement actions, employers must also be mindful that many states have also enacted laws governing the use of non-compete agreements, with many states increasingly restricting their use for low-income workers and some prohibiting them entirely. Employers should ensure that their non-compete agreements comply with applicable state laws wherever they conduct business.

Footnotes

1. Ryan LLC v. Federal Trade Commission, No. 3:2024cv00986 - Document 211 (N.D. Tex. 2024).

2. https://www.ftc.gov/news-events/news/press-releases/2025/09/federal-trade-commission-files-accede-vacatur-non-compete-clause-rule.

3. https://www.ftc.gov/system/files/ftc_gov/pdf/ferguson-holyoak-statement-re-noncompete-acceding-vacatur.pdf.

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