On April 15, the Federal Trade Commission ordered Rollins, Inc. - the parent company of Orkin, HomeTeam Pest Defense, and Critter Control - to stop enforcing noncompete agreements it had imposed on more than 18,000 employees nationwide.
The FTC also sent warning letters to 13 other pest-control companies, urging them to review whether their employment contracts contain similar provisions.
That's a lot of workers in one industry. But the story is bigger than pest control.
What a Noncompete Actually Does (and Why It Matters to You)
A noncompete agreement is a clause in an employment contract that says: after you leave this job, you cannot work for a competitor - or start a competing business - for a set period of time, usually one to two years, usually within a defined geographic radius.
Rollins' version was aggressive. According to the FTC's complaint, it prohibited employees from working anywhere in pest control within a 75-mile radius of any of Rollins' 700-plus U.S. locations. That covers a huge chunk of the country.
And it applied to a wide range of workers - not just executives or sales people with access to trade secrets, but customer service reps, technicians, and other lower-wage employees. Workers who, the FTC said, had no ability to negotiate the terms, received no extra pay for signing, and were often given little time to read what they were agreeing to.
Rollins enforced these agreements. Hard. The FTC's complaint says the company sent hundreds of cease-and-desist letters to former employees and filed multiple lawsuits against people who tried to leave and start something new.
The Small Business Angle
Here's what this has to do with you, even if you have never heard of Orkin.
Noncompetes are not just a big-company tool. They show up constantly in small and mid-sized businesses, especially in service industries like landscaping, cleaning, security, home repair, and healthcare. And they are one of the main legal reasons people stay stuck instead of going independent.
The FTC framed this enforcement action explicitly around small business formation. The agency's statement said that noncompetes "prevent workers from changing jobs, starting competing businesses, and earning higher wages."
That is not an accident. The FTC under the current administration has made worker mobility and small business formation a consistent enforcement theme.
The message to employers is: if you are using noncompetes as a tool to lock in employees who are not genuinely protecting trade secrets or client relationships, the FTC is watching.
The message to workers is: if you have a noncompete and you want to start something, this is a legal environment that is moving in your direction.
What the FTC Order Actually Does
Under the proposed order, Rollins must:
- Stop enforcing noncompete agreements against current and former workers
- Notify those 18,000-plus employees that their agreements are no longer enforceable
- Drop any pending lawsuits or legal threats related to noncompetes
The 13 warning letters sent to other pest-control companies do not carry the same legal force - they are not orders. But they are a clear signal: clean up your contracts or you are next.
What This Doesn't Mean
The FTC's broad noncompete rule - the one passed in 2024 that would have banned most noncompetes nationwide - was blocked in federal court and is still tied up in litigation. This enforcement action is different. It is the FTC using its existing antitrust authority to go after specific companies case by case.
That approach is slower. But it is also legally sturdier than a sweeping national rule.
If you have a noncompete in your current employment contract and you are thinking about leaving to start your own business, you should still consult a lawyer. The legal landscape varies significantly by state - California, Minnesota, North Dakota, and a handful of others already ban most noncompetes. In other states, they are still enforceable.
But the direction of federal enforcement is clear. And if your noncompete looks anything like Rollins' - broad geography, applied to low-wage workers, no negotiation, no real trade secrets involved - you have more ground to stand on than you did a year ago.
The Bottom Line
The FTC just told one of the largest service-sector employers in the country that it cannot use legal threats to prevent workers from starting businesses. The agency sent warning letters to a dozen more. This is not a one-off. It is a pattern.
If you work in a service business and have been told you cannot compete, or if you are a small business owner who has used noncompetes to hold onto employees, this is a story worth understanding.