FTC orders Rollins to scrap non-compete clauses for workers

The FTC has ordered Rollins, Inc. to abandon non-compete agreements with rank-and-file employees under a 10-year settlement. 

The Federal Trade Commission reached a consent order with Rollins, Inc., the Atlanta-headquartered pest control company, settling allegations that its use of non-compete clauses harmed competition by restricting worker mobility and new business formation. The order, a redacted public version of which was released by the Commission, carries a 10-year term and imposes a detailed set of obligations that will land directly on the desks of HR teams managing employment agreements at scale. 

At the heart of the settlement is a straightforward prohibition. Rollins must stop entering into, maintaining, enforcing, or threatening to enforce non-compete agreements with what the order calls "Covered Employees" – a category that takes in current workers, anyone employed by the company within the two years prior to the order's issuance, prospective hires, and third-party contractors across the United States. The order makes clear that branch-level staff – pest-control and termite technicians, sales inspectors, account managers, customer service representatives, service managers, and branch managers – are not considered senior leaders and fall within that protected group. Directors, officers, and senior leaders eligible for equity compensation are carved out. 

The Commission alleged that Rollins' non-compete practices violated Section 5 of the FTC Act. Rollins did not admit wrongdoing. The consent agreement states that the company's participation is for settlement purposes only and does not constitute an admission that the law was violated or that the FTC's factual allegations are true. 

The practical demands on Rollins' HR operations are significant. Within 60 days of the order's issuance, the company must deliver a notification letter and a copy of the order to each Covered Employee currently subject to a non-compete agreement. Delivery must be made by name, either by US Mail with return receipt requested or via electronic transmittal with proof of a read-receipt or delivery. Within 30 days, Rollins must also begin posting a notice in the documentation provided to each new Covered Employee upon hire, informing them that their employment will not be subject to a non-compete and that they are free to work for competitors, start competing businesses, or solicit Rollins customers through general advertisements after leaving the company. 

The notification obligations do not stop at rank-and-file workers. Within 30 days, every director, officer, HR officer, and the most senior HR employee overseeing hiring at each US location must receive a copy of the order and the FTC's complaint. Each must then submit a written statement within 30 days confirming they have read the order and understand that non-compliance may subject the company to penalties. 

Rollins must also file verified compliance reports on a prescribed schedule: interim reports at 60 days and six months, then annual reports beginning one year after issuance and continuing annually for the next nine years. Those annual filings require a sworn declaration that non-compete agreements with Covered Employees have been rescinded and not reimposed, and that the company's agreements comply with the order. Rollins must also disclose any cease-and-desist letters or similar threats of legal action, and any court filings, against Covered Employees related to non-solicitation agreements – a requirement that keeps the FTC's eye on how Rollins uses its remaining post-employment restrictions. 

Rollins does retain some tools. The order permits the company to continue enforcing agreements that protect confidential business information and trade secrets, and non-solicitation provisions, to the extent those agreements are permitted by law and the consent order. Non-competes tied to business acquisitions are also allowed, so long as the individuals involved hold a preexisting equity interest in the business being acquired. 

One detail in the template notification letter included in the order is worth noting. It states that Rollins had already provided written notice to employees that it would no longer enforce non-compete provisions, prior to the FTC settlement. The consent order now formalizes that position for a decade. 

For HR leaders tracking the FTC's enforcement approach on non-competes, this case offers a concrete look at what a consent order demands in practice – not just a prohibition, but a layered compliance structure involving individual employee notifications, onboarding documentation changes, leadership acknowledgments, sworn annual declarations, and document retention obligations spanning years. The order terminates 10 years from the date of issuance.