The Federal Trade Commission ordered Rollins, Inc. on Apr. 15 to stop enforcing noncompete agreements for more than 18,000 employees across the United States and sent warning letters to 13 other pest-control companies about similar practices.
The FTC said this action is intended to protect workers' ability to seek new jobs and start competing businesses without facing restrictions that could lower wages or limit job mobility.
Rollins, which owns brands such as Orkin, HomeTeam, and Critter Control, had required nearly all its employees—including technicians and customer-service representatives—to sign noncompete agreements preventing them from working in pest control within a set distance of their former workplace for two years after leaving the company. The FTC complaint alleges these agreements were imposed without negotiation or extra compensation and sometimes with little explanation given to workers.
According to the agency's proposed order, Rollins must notify current and former employees that they are no longer subject to any noncompete agreement with the company. The order also prohibits Rollins from entering into or attempting to enforce such agreements in the future.
Daniel Guarnera, Director of the FTC’s Bureau of Competition, said: “Once again, the FTC is fighting for American workers to ensure that they have the freedom to pursue new job opportunities and better pay. 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.”
Chairman Andrew N. Ferguson issued warning letters urging other pest-control companies employing thousands more people nationwide to review their employment contracts for potentially unlawful restrictions similar to those at Rollins.
The Commission has previously taken action against other firms using restrictive labor practices—including ordering a large pet cremation business not to enforce noncompetes against nearly 1,800 workers—and has created a cross-agency Joint Labor Task Force focused on unfair labor-market practices.
The public can submit comments on the proposed consent agreement within 30 days through Regulations.gov before it becomes final.
