WASHINGTON, D.C. — Thousands of pest-control workers nationwide will no longer be bound by noncompete agreements under a federal enforcement action targeting labor practices that regulators say limited job mobility and wages.
What This Means for You
- More than 18,000 workers can seek jobs or start businesses without restrictions
- Noncompete clauses that limit where you can work after leaving a job face increased scrutiny
- Employers may be required to revise contracts to comply with federal law
The Federal Trade Commission ordered Rollins, Inc., a major pest-control company, to stop enforcing noncompete agreements against current and former employees, while also warning other firms in the industry to review similar practices.
Noncompete agreements are contracts that restrict employees from working for competitors or starting similar businesses for a set period of time after leaving a job.
Allegations Against Rollins
According to the FTC, Rollins imposed noncompete agreements on a broad range of employees, including technicians and customer service workers, often without additional compensation or meaningful opportunity to negotiate terms.
The agreements typically barred workers from taking jobs in the pest-control industry for two years and within a 75-mile radius of company locations.
Regulators also allege the company sent cease-and-desist letters and filed lawsuits against former employees accused of violating those agreements.
“The American economy runs best when workers are not limited by noncompete agreements that distort competition and prevent workers from changing jobs,” said Daniel Guarnera, director of the FTC’s Bureau of Competition.
Impact on Workers and Competition
The FTC said the agreements restricted job opportunities, reduced wages and benefits, and discouraged workers from starting competing businesses.
Regulators also allege the practices limited competition by preventing new companies from entering or expanding within the pest-control market.
Under the proposed order, Rollins must stop enforcing existing noncompete agreements and notify affected workers that they are free to seek other employment or start competing businesses.
Broader Industry Review
The FTC also issued warning letters to 13 other pest-control companies, advising them to review employment contracts for similar provisions that could violate antitrust laws.
Officials said such agreements may harm workers by limiting mobility and suppressing wages, while also reducing competition across the industry.
Next Steps
The proposed order is open for public comment for 30 days before final approval. If finalized, it will carry the force of law and require Rollins to comply with the restrictions moving forward.
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