Abusive non-competes: US Federal Trade Commission takes action against pest control company

The Federal Trade Commission has ordered Rollins Inc. – one of the largest pest-control companies in the United States – to stop enforcing noncompete agreements against more than 18,000 employees nationwide.  The agency also sent warning letters to 13 other companies in the pest control industry that employ many thousands more workers, urging the firms to review their employment agreements to ensure they do not contain any unfair or anticompetitive noncompete provisions.

The FTC’s 15 April 2026 full media release is here: FTC Takes Action Against Noncompete Agreements, Securing Protections for Workers | Federal Trade Commission

Rollins imposed noncompete agreements on nearly all its employees, which typically prohibited them from working in the pest-control industry for two years after ending employment with Rollins. The company’s noncompete agreements prohibited employees from working in pest control within a predetermined distance, typically within a 75 mile (120km) radius from one of Rollins’ more than 700 locations in the U.S., the FTC’s complaint alleges.

Under the proposed FTC order, Rollins must, among other obligations, stop enforcing noncompete agreements against thousands of current and former Rollins workers, which will free them from these alleged unfair and anticompetitive agreements.

“Once again, the FTC is fighting for American workers to ensure that they have the freedom to pursue new job opportunities and better pay,” said Daniel Guarnera, Director of the FTC’s Bureau of Competition. “The American economy runs best when workers are not limited by noncompete agreements that distort competition and prevent workers from changing jobs, starting competing businesses, and earning higher wages. The FTC’s actions today build on its work to enforce the antitrust laws to protect American workers.”

EDITOR’S NOTE:  While noncompete agreements in New Zealand are generally only moderately enforceable, employers that succeed in getting a restraint of trade injunction often go on to claim damages and penalties from the former employee, the end-game likely being financial ruin.  In [2023] NZERA745 Cookright Filtering Service Ltd v Hill, the Employment Relations Authority granted a six-month injunction against a low-paid commercial cleaner.  Soon after the injunction lapsed, and Mr Hill was back at work, he and his new employer (and domestic partner) were ordered to pay Cookright $28,854 (USD17,000) in penalties and damages, and $7,641 (UDS4,500) in costs.  However, due to Cookright’s own conduct (which Leighton Associates can’t elaborate on because we advised on the appeal), the Employment Court overturned the award by consent, and swept away a troubling precedent.

Tristam Price, Editor