Since withdrawing its proposed rule broadly banning noncompetes in September 2025, the Federal Trade Commission (“FTC”) has made clear that it will instead bring to bear its enforcement resources against what it deems anticompetitive worker noncompete agreements. The FTC’s latest related enforcement action, announced on April 15 via press release, is against the pest-control company Rollins, which allegedly employs more than 18,000 U.S.-based workers. Simultaneously, the agency announced that it had issued letters to thirteen additional pest-control companies warning them that its review of noncompetes in the pest-control industry “suggests they are not reasonably necessary to promote any procompetitive aims,” and that the FTC suspects the pest-control industry of using anticompetitive noncompetes. The letters instruct recipients to undertake a comprehensive review of their employment agreements, including any restrictive covenants.
The noncompetes at issue in the Rollins action allegedly prohibit employees from working in the pest-control industry for two years following the conclusion of their employment, usually within a seventy-five-mile radius from the location at which the employee worked. Additionally, the FTC claims that the company generally did not give employees any incremental consideration, whether in the form of additional compensation or any other benefit.
The Rollins action is similar to the FTC’s 2025 complaint and consent decree against a large pet cremation company. In both cases, the agency defines noncompetes as contract terms that, following the conclusion of employment with one employer, restrict the worker’s freedom to accept employment with competing businesses, to start a competing business, or otherwise to compete with the former employer post-employment. Both actions allege that the employers required virtually all of their personnel to agree to noncompetes, including low-skilled and low-wage employees, without individualized consideration of roles.
Both complaints allege that the challenged restrictive covenants are anticompetitive because they alter the bargaining position between employees and their employers and negatively impact the employees. Specifically, the FTC charged that employees bound by noncompete agreements are in a worse position to negotiate better terms of employment in the industry at issue (pet cremation or pest-control) due to the noncompete agreements’ denying them access to job opportunities and restricting their mobility. Further, the agency contends that noncompete agreements likely cause lower wages and salaries, reduced benefits, less favorable working conditions, and personal hardship to employees.
In 2025, the FTC issued similar warning letters to health care employers. Also in 2025, the agency challenged the blanket use of no-hire provisions in agreements with customers of a building services company. Although these no-hire provisions were not identical to the worker noncompetes challenged in the pest-control and pet cremation industries, they shared many of the same characteristics: they too allegedly applied to workers regardless of skill or wage level, and they were viewed by the FTC as reducing mobility, lowering wages and benefits, and creating less favorable working conditions and personal hardship for employees. In all three cases, the agency also claimed that the restrictions harmed competition in the market for the employers’ products or services by directly or indirectly impeding the entry and expansion of competing businesses.
The Rollins action and warning letters are also consistent with the FTC’s message from its January 2026 public workshop titled “Moving Forward: Protecting Workers from Anticompetitive Noncompete Agreements.” The workshop outlined the FTC’s approach to enforcement following its abandonment of the noncompete ban and broad rulemaking. The program included remarks by the FTC’s two current commissioners confirming that the agency intends to aggressively enforce antitrust violations posed by noncompete agreements even after the vacatur of its broad Non-Compete Clause Rule. However, the FTC’s future enforcement will be on a case-by-case basis, as opposed to a broad ban.
Chairman Andrew N. Ferguson framed the FTC’s strategy as using “the tools Congress actually gave us,” namely bringing individual enforcement cases. He emphasized that the agency would not step back from this charge, stating that the “days of unreflective, unjustified, and anticompetitive noncompete agreements are over.” Ferguson noted that Congress could, alternatively, choose to ban noncompetes outright. Commissioner Mark R. Meador added that noncompetes are especially likely to raise competitive concerns when they extend beyond one to two years after employment, reach geographic areas beyond the employer’s market, or restrict workers from engaging in unrelated lines of business.
The FTC’s 2025 warning letters to health care staffing companies, 2026 warning letters to pest-control firms, consent decrees, and workshop all confirm that the FTC’s retreat from its attempted nationwide ban does not signal an end to federal scrutiny of noncompete agreements. The agency continues to encourage workers and others to anonymously report potentially anticompetitive restrictions on employee movement.
The agency has explained that it will consider (a) whether purported procompetitive justifications are legitimate and (b) whether less restrictive alternative measures can incentivize any associated procompetitive investments. Employers must also consider the evolving landscape of state laws governing the use and scope of worker noncompetes, including recent Virginia and Maryland legislation.
For workers, the FTC’s sustained enforcement activity confirms that noncompete agreements—particularly those imposed on low-wage or low-skilled employees without individualized justification or additional compensation—are vulnerable to challenge. Workers subject to such agreements are encouraged to report potentially anticompetitive restrictions to the FTC and to consult counsel regarding the enforceability of any covenants restricting their post-employment mobility.
For employers, the central message is that the FTC will continue to bring individual enforcement actions, and employers should review existing noncompete and related restrictive covenant templates to ensure they satisfy existing state and federal guidance. The FTC’s latest enforcement action serves to again remind employers that they must not only be vigilant in monitoring the patchwork of rapidly evolving state and local noncompete laws, but must also stay alert to the FTC’s focus on policing the use of noncompetes within particular industries. If the applicable states’ laws permit the use of noncompetes, employers that cannot demonstrate legitimate, narrowly tailored procompetitive justifications for their noncompetes face exposure—both from the FTC and from employees who may seek relief under applicable law.
