What happened
The Federal Trade Commission said Wednesday it had ordered Rollins Inc. to stop enforcing noncompete agreements against more than 18,000 employees nationwide, while also warning 13 other pest-control companies to review employment agreements for unfair or anticompetitive noncompete provisions.
Rollins, the parent of Orkin, HomeTeam and Critter Control, allegedly imposed noncompetes on nearly all employees, typically barring work in pest control for two years after leaving Rollins and within a 75-mile radius of one of the company's more than 700 U.S. locations. The FTC said the proposed order would require Rollins to stop enforcing noncompetes against current and former workers.
According to the FTC, the agreements covered technicians, customer-service representatives and other relatively low-wage employees who had no ability to negotiate, received no extra compensation and had little or no opportunity to fully consider the restrictions. The FTC further alleged Rollins sent hundreds of cease-and-desist letters to former employees and filed multiple lawsuits over alleged noncompete breaches.
The agency says the noncompetes denied workers job opportunities, restricted mobility, likely lowered compensation and benefits, and suppressed competition by limiting entry and expansion by Rollins rivals and discouraging worker-founded competitors. The action is part of the FTC's broader labor-market enforcement push targeting noncompetes and other practices the agency says constrain worker mobility and competition.
The proposed order would bar Rollins from entering, maintaining, enforcing or threatening to enforce noncompete agreements, and would require notice to current and former employees that they are no longer subject to such agreements and may compete with Rollins, including by starting their own businesses.
The FTC said Chairman Andrew N. Ferguson also issued warning letters to 13 other pest-control companies advising that noncompetes elsewhere in the industry may cause harms similar to those alleged against Rollins. The letters urge companies to review employment agreements, including noncompetes, for tailoring and legal compliance.
The Commission voted 2-0 to issue the complaint and accept the proposed consent agreement for public comment, and the public will have 30 days to submit comments. The FTC said an administrative complaint reflects the Commission's reason to believe the law has been or is being violated, while a consent order carries the force of law once issued on a final basis.