On April 15, 2026, the Federal Trade Commission ordered Rollins, Inc. — one of the largest pest-control companies in the United States and parent of household brands Orkin, HomeTeam, and Critter Control — to stop enforcing non-compete agreements against more than 18,000 employees nationwide. The FTC’s complaint alleges that Rollins imposed non-competes on nearly all of its employees, regardless of role or seniority, typically prohibiting them from working anywhere in the pest-control industry for two years after separation within a 75-mile radius — from any of the company’s more than 700 U.S. locations. Alongside the consent order, the agency sent warning letters to 13 additional pest-control companies employing many thousands more workers, urging each to review its employment agreements and eliminate any unfair or anticompetitive non-compete provisions. Under the proposed consent order, Rollins must cease entering into, maintaining, enforcing, or threatening to enforce any non-compete agreement — and must provide written notice to all current and former employees that they are no longer bound by such agreements and are free to compete, including by starting their own businesses.
FTC enforcement ramp-up: a deliberate, escalating campaign
The Rollins order is not a one-off. It is the latest — and largest — in a series of enforcement actions the FTC has brought since abandoning its attempt to impose a nationwide non-compete ban by rule. After the FTC formally dismissed its appeals of the vacated Non-Compete Clause Rule in September 2025, Chairman Andrew Ferguson made clear that the agency would pivot to aggressive, industry-by-industry enforcement under Section 5 of the FTC Act. The pace of that enforcement has accelerated steadily: the Gateway Services action (pet cremation, ~1,800 workers) in September 2025; the Adamas Amenity Services action (building services, no-hire agreements) finalized in February 2026; a cross-agency Joint Labor Task Force launched to prosecute anticompetitive labor practices; and a January 2026 public workshop titled “Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements.”
The Rollins action marks a significant escalation in scale: it affects over ten times the number of employees reached by the Gateway order, and the accompanying warning letters extend the FTC’s reach across an entire industry. Employers should not view the demise of the blanket rulemaking ban as a relaxation of federal scrutiny. If anything, case-by-case enforcement exposes individual employers to targeted action in ways that a broad rule — applicable to all employers equally — would not.
Blanket non-competes are the primary target
The Rollins order underscores a consistent pattern in the FTC’s enforcement philosophy: the agency is targeting employers that apply non-competes indiscriminately across their entire workforce, without tailoring restrictions to employees who possess genuine protectable interests. The FTC’s complaint against Rollins emphasizes that the company imposed non-competes on “nearly all” employees — a workforce spanning technicians, sales representatives, and operational staff — with uniform two-year duration and 75-mile geographic restrictions covering 700+ locations. The same pattern appeared in Gateway, where non-competes applied “without any individualized consideration of an employee’s role,” reaching hourly laborers, drivers, and customer service representatives.
Converging federal and state pressure — healthcare in the crosshairs
The FTC’s campaign is compounded by an unprecedented wave of state-level legislative activity. Four states now ban non-competes entirely, 34 states plus the District of Columbia restrict their use, and 13 states enacted new restrictions in 2025 alone.
Healthcare has emerged as the focal point of both federal and state action. In September 2025, Chairman Ferguson sent warning letters specifically to healthcare employers and staffing firms, announcing the FTC is “focusing resources on enforcing Section 5 of the FTC Act against unlawful non-competes, particularly in the healthcare sector,” and warning that such restrictions can limit patients’ choices — particularly in underserved rural areas. State legislatures have moved in parallel: Washington enacted a comprehensive ban on all non-competes effective June 2027; Virginia barred enforcement of non-competes against employees terminated without cause and passed a broad healthcare and low-wage-earner non-compete ban (both effective July 2026); Utah prohibited non-competes with healthcare workers effective May 2026; and Montana expanded its physician non-compete prohibition. Nationally, the bills most successful in becoming law have been those that restricted non-competes for healthcare workers.
Practical takeaways
Audit and narrow existing agreements. Review all non-compete and restrictive covenant agreements currently in use. Evaluate whether each is justified by a protectable interest specific to the role, such as trade secrets, confidential information, or customer relationships, and consider eliminating non-competes for hourly, non-exempt, and lower-level employees. Where restrictions remain appropriate, ensure duration, geographic scope, and activity limitations are tailored to what is reasonably necessary.
Evaluate less restrictive alternatives. The FTC’s consent orders expressly permit employers to continue using non-solicitation and confidentiality agreements that comply with applicable law. Non-solicitation, non-disclosure, and garden leave provisions may adequately protect legitimate interests with significantly less legal exposure.
Review state-specific compliance. Multi-state employers should audit compliance jurisdiction by jurisdiction, with particular attention to healthcare-specific bans, new income-threshold requirements, and private rights of action that several states have recently enacted.
Document business justifications. For non-competes that remain in place, ensure the organization can articulate a clear, role-specific business rationale. The FTC’s ongoing public inquiry into non-compete practices is designed to inform future enforcement actions, and additional targeted industry sweeps should be expected.
Reed Smith’s Labor & Employment Group and Antitrust & Competition Team are actively tracking these developments and are prepared to assist your organization in assessing its exposure, redesigning its restrictive covenant program, and staying ahead of the evolving federal and state landscape.