[Federal Register Volume 91, Number 77 (Wednesday, April 22, 2026)]
[Notices]
[Pages 21497-21501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2026-07844]
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FEDERAL TRADE COMMISSION
[File No. 251 0011]
Rollins, Inc.; Analysis of Proposed Agreement Containing Consent
Order To Aid Public Comment
AGENCY: Federal Trade Commission.
ACTION: Proposed consent agreement; request for comment.
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SUMMARY: The consent agreement in this matter settles alleged
violations of Federal law prohibiting unfair methods of competition.
The attached Analysis of Proposed Agreement Containing Consent Order to
Aid Public Comment describes both the allegations in the complaint and
the terms of the consent order--embodied in the consent agreement--that
would settle these allegations.
DATES: Comments must be received on or before May 22, 2026.
ADDRESSES: Interested parties may file comments online or on paper by
following the instructions in the Request for Comment part of the
SUPPLEMENTARY INFORMATION section below. Please file your comment
online at https://www.regulations.gov by following the instructions on
the web-based form. If you prefer to file your comment on paper, please
write ``Rollins, Inc.; File 251 0011'' on it and mail it to the
following address: Federal Trade Commission, Office of the Secretary,
600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex V), Washington, DC
20580.
SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal
Trade Commission Act, 15 U.S.C. 46(f), and FTC Rule 2.34, 16 CFR 2.34,
notice is hereby given that the above-captioned consent agreement
containing a consent order to cease and desist, having been filed with
and accepted, subject to final approval, by the Commission, has been
placed on the public record for a period of 30 days. The following
Analysis of Proposed Agreement Containing Consent Orders to Aid Public
Comment describes the terms of the consent agreement and the
allegations in the complaint. An electronic copy of the full text of
the consent agreement package can be obtained from the FTC website at
this web address: https://www.ftc.gov/news-events/commission-actions.
The public is invited to submit comments on this document. For the
Commission to consider your comment, we must receive it on or before
May 22, 2026. Write ``Rollins, Inc.; File 251 0011'' on your comment.
Your comment--including your name and your State--will be placed on the
public record of this proceeding, including, to the extent practicable,
on the https://www.regulations.gov website.
Because of the agency's heightened security screening, postal mail
addressed to the Commission will be delayed. We strongly encourage you
to submit your comments online through the https://www.regulations.gov
website. If you prefer to file your comment on paper, write ``Rollins,
Inc.; File 251 0011'' on your comment and on the envelope, and mail
your comment by overnight service to: Federal Trade Commission, Office
of the Secretary, 600 Pennsylvania Avenue NW, Mail Stop H-144 (Annex
V), Washington, DC 20580.
Because your comment will be placed on the publicly accessible
website at https://www.regulations.gov, you are solely responsible for
making sure your comment does not include any sensitive or confidential
information. In particular, your comment should not include sensitive
personal information, such as your or anyone else's Social Security
number; date of birth; driver's license number or other State
identification number, or foreign country equivalent; passport number;
financial account number; or credit or debit card number. You are also
solely responsible for making sure your comment does not include
sensitive health information, such as medical records or other
individually identifiable health information. In addition, your comment
should not include any ``trade secret or any commercial or financial
information which . . . is privileged or confidential''--as provided by
section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2),
16 CFR 4.10(a)(2)--including competitively sensitive information such
as costs, sales statistics, inventories, formulas, patterns, devices,
manufacturing processes, or customer names.
Comments containing material for which confidential treatment is
requested must be filed in paper form, must be clearly labeled
``Confidential,'' and must comply with FTC Rule 4.9(c). In particular,
the written request for confidential treatment that accompanies the
comment must include the factual and legal basis for the request and
must identify the specific portions of the comment to be withheld from
the public record. See FTC Rule 4.9(c). Your comment will be kept
confidential only if the General Counsel grants your request in
accordance with the law and the public interest. Once your comment has
been posted on https://www.regulations.gov--as legally required by FTC
Rule 4.9(b)--we cannot redact or remove your comment from that website,
unless you submit a confidentiality request that meets the requirements
for such treatment under FTC Rule 4.9(c), and the General Counsel
grants that request.
Visit the FTC website at https://www.ftc.gov to read this document
and the news release describing this matter. The FTC Act and other laws
the Commission administers permit the collection of public comments to
consider and use in this proceeding, as appropriate. The Commission
will consider all timely and responsive public comments it receives on
or before May 22, 2026. For information on the Commission's privacy
policy, including routine uses permitted by the Privacy Act, see
https://www.ftc.gov/site-information/privacy-policy.
Analysis of Proposed Agreement Containing Consent Orders To Aid Public
Comment
I. Introduction
The Federal Trade Commission (``Commission'') has accepted for
public comment, subject to final approval, The Federal Trade Commission
(``Commission'') has accepted for public comment, subject to final
approval, an Agreement Containing Consent Order (``Consent Agreement'')
with Rollins, Inc. (``Rollins'' or ``Respondent''). The proposed
Decision and Order (``Proposed Order''), included in the Consent
Agreement and subject to final Commission approval, is designed to
remedy the anticompetitive effects that have resulted from Respondent's
use of post-employment covenants not to compete (``Non-Compete
Agreements''). A Non-Compete Agreement refers to contract terms that,
after a worker has ceased working for an employer, restricts the
worker's freedom to accept
[[Page 21498]]
employment with a competing business, to form a competing business, or
otherwise to compete with the employer.
The Consent Agreement settles charges that Respondent has engaged
in unfair methods of competition in violation of section 5 of the FTC
Act, as amended, 15 U.S.C. 45, by entering into Non-Compete Agreements
with its employees and enforcing them against its former employees.
The Proposed Order has been placed on the public record for 30 days
in order to receive comments from interested persons. Comments received
during this period will become part of the public record. After 30
days, the Commission will again review the Consent Agreement and the
comments received and will decide whether it should withdraw from the
Consent Agreement and take appropriate action or make the Proposed
Order final.
II. The Respondent
Rollins is a corporation organized, existing, and doing business
under, and by virtue of, the laws of the State of Delaware, with its
principal place of business located in Atlanta, Georgia. Respondent is
one of the largest pest-control companies in the United States. Rollins
operates over 700 locations with over 18,000 U.S-based employees.
III. The Complaint
The complaint makes the following allegations.
Respondent provides pest-control services in the United States.
Respondent long had a policy requiring all newly hired employees to
enter Non-Compete Agreements, regardless of their position or
responsibilities, with limited exceptions that depend on the employee's
location of employment.
Respondent's Non-Compete Agreements have covered a broad range of
employees, including pest-control technicians, customer-service
representatives, and other employees earning relatively low wages.
These types of employees account for the bulk of Respondent's U.S.-
based employees subject to Non-Compete Agreements.
As alleged in the complaint, Respondent's Non-Compete Agreements
have contained a clause prohibiting, for two years following the
conclusion of employment with Rollins, the employee from working in the
pest-control services industry within a predetermined distance--usually
a 75-mile radius around the Rollins location at which the employee
worked, but often a multi-county region.
The complaint alleges Respondent's Non-Compete Agreements are
unfair and anticompetitive because they degrade employees' ability to
negotiate for better terms of employment in the pest-control industry.
The Non-Compete Agreements deny employees access to job opportunities
and restrict their mobility, including their ability to start their own
pest-control businesses. The complaint alleges this has the tendency or
likely effect of restricting business formation, lowering worker
earnings (including but not limited to wages and salaries), reducing
benefits, and causing less favorable working conditions and other
personal hardships to employees. The complaint further alleges that
Respondent's Non-Compete Agreements are unfair and anticompetitive
because they suppress competition to sell pest control services to
consumers, including by inhibiting current competition in the pest-
control industry and by impeding competitive entry.
The complaint further alleges that any procompetitive objectives
Respondent sought to achieve through its Non-Compete Agreements do not
depend on the use and enforcement of Non-Compete Agreements and could
have been achieved through significantly less restrictive means. In
particular, the complaint alleges that Respondent's Non-Compete
Agreements are not reasonably necessary to incentivize Respondent to
continue investing in developing confidential information and employee
training. The complaint also alleges Respondent offers the same level
of employee training where it does not use or enforce Non-Compete
Agreements and is incentivized to provide adequate training to compete
on the merits by offering quality services. The complaint further
alleges Respondent can use narrowly tailored non-solicitation
agreements, which may promote continued investment in growing or
maintaining customer relationships and client goodwill. These
agreements may reduce or eliminate the harms associated with more
restrictive Non-Compete Agreements.
IV. Legal Analysis
Section 5 of the Federal Trade Commission (FTC) Act prohibits
unfair methods of competition.\1\ This prohibition includes agreements
in restraint of trade proscribed by section 1 of the Sherman Act \2\ as
well as agreements or other practices that ``conflict with the basic
policies of the Sherman and Clayton Acts'' even if they ``may not
actually violate these laws.'' \3\ Section 5 claims typically ``bear
the characteristics of recognized antitrust violations.'' \4\ Courts
have long found agreements not to compete between workers and their
current or former employers to be ``proper subjects for scrutiny''
under Federal antitrust law.\5\ That courts at common law prior to the
passage of the Federal antitrust laws treated agreements between
workers and business owners not to compete as presumptively unlawful
further suggests that these agreements often conflict with the basic
policies of the antitrust laws.\6\
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\1\ 15 U.S.C. 45.
\2\ 15 U.S.C. 1; see FTC v. Cement Inst., 333 U.S. 683, 693-94
(1948).
\3\ FTC v. Brown Shoe, 384 U.S. 316, 321 (1966).
\4\ Atl. Ref. Co. v. FTC, 381 U.S. 357, 369-70 (1965).
\5\ See Newburger, Loeb & Co., Inc. v. Gross, 563 F.2d 1057,
1081-82 (2d Cir. 1977); see also Polk Bros., Inc. v. Forest City
Enters., Inc., 776 F.2d 185, 189 (7th Cir. 1985) (``A covenant not
to compete following employment does not operate any differently
from a horizontal market division among competitors--not at the time
the covenant has its bite, anyway.'').
\6\ See United States v. Addyston Pipe & Steel Co., 85 F. 271,
281-82 (6th Cir. 1898), aff'd, 175 U.S. 211 (1899) (collecting cases
and relating the treatment of agreements not to compete at common
law to Sherman Act principles, describing them as permissible only
where shown to be ancillary to the sale of a business, a
partnership, a lease, or where otherwise shown ``reasonably
necessary'' to protect confidential knowledge); cf. Mitchel v.
Reynolds, 24 Eng. Rep. 347, 351 (Q.B. 1711) (analyzing noncompete
accompanying the sale of a bakery and presuming noncompetes ``prima
facie to be bad'' unless shown otherwise).
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In applying antitrust scrutiny to such agreements, courts typically
make a fact-specific determination to assess the agreements' likely
effects on competition.\7\ Agreements between market participants not
to compete may suppress competition by limiting the entry or growth of
competitors or otherwise giving rise to the types of harms the
antitrust laws are aimed at preventing. These harms include higher
consumer prices, reduced availability of services, lower quality
services, and reduced worker earnings and benefits. Courts have long
held that agreements between market participants that restrain
competition but are not reasonably necessary to achieve some
procompetitive purpose can be unlawful ``even in the absence of
elaborate market analysis.'' \8\ Moreover, a growing volume
[[Page 21499]]
of empirical evidence indicates agreements not to compete between
workers and their current or former employers can harm both competition
between market participants and the workers subject to them.\9\ One
notable study found such agreements can hinder the formation and growth
of competitors.\10\
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\7\ See Ohio v. Am. Express Co. (``Amex''), 585 U.S. 529, 541
(2018). This analysis is similar to but distinct from that under
many State employment law tests for enforceability of non-compete
agreements, which tend to focus on balancing the interests of the
two parties to the case rather than on competitive effects. See
DeSantis v. Wackenhut Corp., 793 SW2d 670, 688 (Tex. 1990) (``Rule
of reason analysis under antitrust laws must not be confused with
reasonableness analysis under the common law. . . . An agreement may
be reasonable as between the parties and nevertheless violate
antitrust laws. Conversely, an agreement may be unreasonable as
between the parties and yet not violate the rule of reason test
under the antitrust laws.'').
\8\ FTC v. Ind. Fed'n of Dentists, 476 U.S. 447, 459-61 (1986)
(citations omitted); see also, e.g., Newburger, 563 F.2d at 1082
(suggesting similar framework for analysis of agreements not to
compete between workers and their former employers); Mitchel, 24
Eng. Rep. at 351 (non-compete agreements presumed ``prima facie to
be bad'' unless shown otherwise); Cal. Dental Ass'n v. FTC, 526 U.S.
756, 770 (1999) (affirming that an abbreviated rule of reason
analysis is appropriate where ``an observer with even a rudimentary
understanding of economics could conclude that [they] would have an
anticompetitive effect on customers and markets'').
\9\ See, e.g., Michael Lipsitz & Mark Tremblay, Noncompete
Agreements and the Welfare of Consumers, 16 (4) Am. Econ. J.
Microecon. 112 (2024) (showing empirically that when non-compete
agreements are enforced more at the State level, market
concentration increases, with the potential for harm the greatest in
industries in which non-compete agreements are likely to be used at
the highest rate); Matthew S. Johnson, Kurt J. Lavetti & Michael
Lipsitz, The Labor Market Effects of Legal Restrictions on Worker
Mobility, J. Pol. Econ. 133(9), 2735-279 (2025) (linking non-compete
agreement enforcement to negative worker earnings); Bo Cowgill,
Brandon Freiberg & Evan Starr, Clause and Effect: Theory and Field
Experimental Evidence on Noncompete Clauses (Jan. 10, 2024) (last
revised July 18, 2025), https://ssrn.com/abstract=5012370 (causal
study finding that removing non-compete agreements increases
workers' earnings and mobility without generating information
leakage).
\10\ Evan Starr, Natarajan Balasubramanian & Marik Sakakibara,
Screening Spinouts?: How Noncompete Enforceability Affects the
Creation, Growth, and Survival of New Firms, 64 Mgmt. Sci. 552
(2018) (detailing how noncompete enforcement can hinder startup
employment).
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Determining agreements' lawfulness also typically requires
consideration of whether (a) any purported procompetitive
justifications are in fact legitimate,\11\ and (b) less restrictive
alternative measures can incentivize any associated procompetitive
investments.\12\ The existence of less restrictive alternatives can be
dispositive.\13\ In assessing the validity of potential justifications,
the basic fact that a company trains its employees, for example, does
not mean that any worker restraints are necessary to incentivize
investments in training.\14\ And even if an employer submits persuasive
evidence of procompetitive investments that it aims to promote through
its restrictive agreements, less restrictive alternatives often exist
to advance those aims, including narrowly-tailored non-disclosure
agreements and non-solicitation agreements.\15\
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\11\ See Newburger, 563 F.2d at 1082 (suggesting non-compete
agreements would be invalid if, as an initial step, they ``serve no
legitimate purpose at the time they are adopted'').
\12\ See Amex, 585 U.S. at 540-41.
\13\ See NCAA v. Alston, 594 U.S. 69, 100 (2021) (``[R]estraints
of trade may wind up flunking the rule of reason to the extent the
evidence shows that substantially less restrictive means exist to
achieve any proven procompetitive benefits.'').
\14\ See, e.g., Addyston Pipe, 85 F. at 281 (discussing employee
training only in context of whether the noncompete is necessary to
protect confidential information); Deslandes v. McDonald's USA, LLC,
81 F.4th 699, 704 (7th Cir. 2023) (advocating scrutiny of whether
restraints that affect employees are actually necessary for
promoting output and do not ``just take advantage of workers' sunk
costs and help[ ] [the] business's bottom line''); AWP, Inc. v. Safe
Zone Servs., LLC, No. 3:19-CV-00734-CRS, 2022 WL 989133, at *10-11
(W.D. Ky. 2022) (finding that even though the employer ``made some
investment of `time, effort and money' in training its employees,
whether this investment is `significant' enough to constitute a
legitimate business interest is questionable at best'').
\15\ See, e.g., AWP, 2022 WL 989133, at *8 (``Insofar as any
Former Employees . . . had access to sensitive information, the fact
that the Employee Agreement contains a separate nondisclosure
provision forecloses any argument that [the employer] needed a
noncompete agreement to protect it.''); Total Quality Logistics, LLC
v. EDA Logistics LLC, No. 23-3713, 2024 WL 4372312, at *5 (6th Cir.
Oct. 2, 2024) (affirming lower court decision that found employer's
customer goodwill and relationship interest to be ``adequately
protected by the agreement's non-solicitation provision'').
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Applying these principles, the factual allegations described in the
complaint support concluding that Respondent's Non-Compete Agreements
constitute unfair methods of competition in violation of section 5 of
the FTC Act, as amended, 15 U.S.C. 45. As detailed above, the Non-
Compete Agreements likely have anticompetitive effects, including by
inhibiting new business formation and restricting worker mobility and
self-determination. The Non-Compete Agreements are not needed to
advance any procompetitive aims--for example, Respondent provides the
same training to employees regardless of whether they are subject to a
Non-Compete Agreement. And even if there were procompetitive aims
associated with the Non-Compete Agreements, alternatives such as
narrowly tailored non-solicitation agreements are available to promote
them.
V. Proposed Order
The Proposed Order seeks to remedy Respondent's unfair methods of
competition. Section II of the Proposed Order prohibits Respondent
from: entering into, maintaining, or enforcing a Non-Compete Agreement
against a Covered Employee; communicating to a Covered Employee or any
other prospective or current employer that the Covered Employee is
subject to a Non-Compete Agreement; and requiring any Covered Employee
to pay any fees or penalties relating to a Non-Compete Agreement.
Section II of the Proposed Order also specifies that Respondent cannot
prohibit Covered Employees from using general advertisements to solicit
customers in competition with Rollins nor prohibit Covered Employees
from responding to inquiries initiated by Rollins customers.
Section III of the Proposed Order requires Respondent to provide
clear and conspicuous written notice to Covered Employees that they (i)
are not subject to a Non-Compete Agreement; (ii) may compete with
Respondent, including by starting their own business; and (iii) may
solicit customers through general advertisements.
Other sections of the Proposed Order contain standard order
provisions regarding compliance reports, requirements for Respondent to
provide notice to the FTC of material changes to its business, and
access for the FTC to documents and personnel. The term of the Proposed
Order is ten years.
The purpose of this analysis is to facilitate public comment on the
Consent Agreement and Proposed Order to aid the Commission in
determining whether it should make the Proposed Order final. This
analysis is not an official interpretation of the Proposed Order and
does not modify its terms in any way.
By direction of the Commission.
April J. Tabor,
Secretary.
Statement of Chairman Andrew N. Ferguson Joined by Commissioner Mark R.
Meador
Over 18,000 workers are free from the constraints of unlawful
noncompete agreements. The Commission has secured this victory by
issuing an administrative complaint and accepting for public comment a
proposed consent agreement with Rollins, Inc. (``Rollins''), one of the
largest pest-control services companies in the United States, and the
parent company of the Orkin brand, among others.\1\ Rollins provides
pest-control services, including insect identification and treatment,
trapping and removing wildlife, and termite treatment and
prevention,\2\ through more than 700 locations in 49 States.\3\
[[Page 21500]]
Its customers are owners of residential and commercial real estate.\4\
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\1\ Rollins, Brands, https://www.rollins.com/brands (last
visited Apr. 13, 2026); Complaint, In re Rollins, Inc., Matter No.
2510011 (Apr. 13, 2026) (``Complaint''); Decision and Order, In re
Rollins, Inc., Matter No. 2510011 (Apr. 13, 2026) (``Order'').
\2\ Western Pest Services, Pest Control, https://www.westernpest.com/pest-control (last visited Apr. 13, 2026);
Orkin, Pest Control Services, https://www.orkinglobal.com/services/
(last visited Apr. 13, 2026).
\3\ See Today's Homeowner, Orkin Review, https://todayshomeowner.com/pest-control/reviews/orkin-reviews/ (last
visited Apr. 13, 2026).
\4\ Rollins, About Us, https://www.rollins.com/about-us (last
visited Apr. 13, 2026).
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The unlawful conduct the Commission today proscribes was the
alleged widespread imposition and enforcement of unfair and
anticompetitive noncompete agreements.\5\ As I have said before, a
priority for the Commission under my leadership is protecting American
workers from practices that adversely impact competition in labor
markets, including unlawful noncompete agreements.\6\ Of course, not
all noncompete agreements are unlawful. ``Sometimes noncompete
agreements have anticompetitive effects, and other times they have
procompetitive effects.'' \7\ For this reason, noncompete agreements
``present opposing economic considerations that require careful
analysis.'' \8\ As with nearly every other type of business restraint,
the Commission reviews the lawfulness of noncompete agreements on a
case-by-case basis under a reasonableness inquiry.\9\ Under that
balancing test, which is a particular application of the rule of
reason, a noncompete agreement violates the antitrust laws where the
anticompetitive effects of the restraint outweigh any procompetitive
effects that could not be achieved through substantially less
restrictive means.\10\
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\5\ Compl. ]] 7-11.
\6\ See Press Release, FTC, FTC Launches Joint Labor Task Force
to Protect American Workers (Feb. 26, 2025), https://www.ftc.gov/news-events/news/press-releases/2025/02/ftc-launches-joint-labor-task-force-protect-americanworkers; Statement of Chairman Andrew N.
Ferguson, Joined by Comm'r Melissa Holyoak, In re Gateway Pet Mem'l
Servs., Matter No. 2210170, at 1 (Sept. 4, 2025) (``Ferguson Gateway
Statement''); Statement of Chairman Andrew N. Ferguson, Joined by
Comm'r Melissa Holyoak, Ryan, LLC v. FTC, No. 24-10951, at 2, 3
(Sept. 5, 2025).
\7\ Dissenting Statement of Comm'r Andrew N. Ferguson, Joined by
Comm'r Melissa Holyoak, In the Matter of the Non-Compete Clause
Rule, Matter No. P201200, at 41-42 (June 28, 2024) (``Ferguson
Noncompete Rule Dissent''). For example, noncompete agreements can
promote investment in employees by ``mitigating the risk that a
rival will lure employees away'' and ``allow business owners to sell
their enterprise profitably because no one would buy a business if
the seller could immediately compete again in the same field.''
Ferguson Gateway Statement at 3. Such agreements can also ``serve
legitimate business interest by protecting employer investments in
human capital development, safeguarding confidential information and
proprietary know-how that cannot be easily protected though other
means (e.g., non-disclosure and confidentiality agreements or
intellectual property), and encouraging intra-firm collaboration and
knowledge sharing.'' Statement of Mark R. Meador, In the Matter of
Non-Compete Clauses, Matter No. P201200, at 3 (Sept. 5, 2025)
(``Meador Noncompete Statement'').
\8\ Meador Noncompete Statement at 1.
\9\ Ferguson Gateway Statement at 4, 5; Meador Noncompete
Statement at 2-5. Similarly, the common law ``abandoned the
categorical proscription in the early eighteenth century in favor of
a case-specific reasonableness test.'' Id. at 3, n.20 (citing
Ferguson Noncompete Rule Dissent at 35 & Section I.B).
\10\ See Mitchel v. Reynolds, 24 Eng. Rep. 347 (Q.B. 1711); Ohio
v. Am. Express, 585 U.S. U.S. 529, 541-42 (2018); NCAA v. Alston,
594 U.S. 69, 100 (2021) (``[A]nticompetitive restraints of trade may
wind up flunking the rule of reason to the extent the evidence shows
that substantially less restrictive means exist to achieve any
proven procompetitive benefits.''); cf. Newburger, Loeb & Co., Inc.
v. Gross, 563 F.2d 1057, 1082 (2d Cir. 1977) (explaining that the
relevant inquiry in employee agreements not to compete should focus
on whether such restrictions ``operate in circumstances where no
valid business interest of the ex-employer is at stake'' and whether
they ``[a]re so burdensome that their anticompetitive purposes and
effects outweigh their justifications.''); Eichorn v. AT&T Corp.,
248 F.3d 131 (3d Cir. 2001) (challenged no-hire agreement ``not an
antitrust violation under the rule of reason'' where the particular
provision at issue ``did not have a significant anti-competitive
effect on the plaintiffs' ability to seek employment''); Aya
Healthcare Servs., Inc. v. AMN Healthcare, Inc., 9 F.4th 1102, 1110
(9th Cir. 2021) (challenged non-solicitation agreement, involving
employee outsourcing arrangement between healthcare staffing
agencies collaborating to supply traveling nurses not unlawful under
rule of reason where restraint was reasonably necessary to ensure
neither would lose personnel during collaboration).
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Here, staff obtained compelling evidence during their investigation
that gives me the required ``reason to believe'' that Rollins's use of
the vast majority of its noncompete agreements violates section 5 of
the FTC Act,\11\ as charged in the Complaint.\12\ Let me briefly
explain.
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\11\ 15 U.S.C. 45(b); FTC v. Standard Oil of Cal., 449 U.S. 232,
241 (1980); see also AMREP Corp. v. FTC, 768 F.2d 1171, 1177 (10th
Cir. 1985); Boise Cascade Corp. v. FTC, 498 F. Supp. 772, 779 (D.
Del. 1980).
\12\ Compl. ] 19.
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On one side of the scale, the Commission evaluates the
anticompetitive effect of the noncompete agreements. We start with the
scope and coverage of Rollins's noncompete agreements that have applied
to the vast majority of its workforce of more than 18,000 people. The
noncompete agreements prohibited Rollins employees from working in the
pest-control industry generally within 75 miles of the Rollins location
at which the employee worked for two years after the end of the
employment relationship.\13\ As our Complaint explains, Rollins
required all newly hired employees, regardless of their position or
responsibilities, to enter into these noncompete agreements--including
employees at firms that Rollins acquired.\14\ That sort of
indiscriminate ``general policy'' approach of requiring every single
worker to sign a noncompete agreement irrespective of the worker's
position or responsibilities cries out for scrutiny under the antitrust
laws.
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\13\ Id. ] 7.
\14\ Id. ]] 7, 9, 10.
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These noncompete agreements were not merely pro forma. When workers
left Rollins to seek opportunities elsewhere or start their own
businesses, we allege that Rollins sent hundreds of threatening letters
or initiated litigation to enforce the noncompete agreements.\15\ The
targets of this enforcement campaign often lacked the resources to
litigate and acceded to the threat at great personal and professional
expense.\16\ And our Complaint alleges that the agreements imposed
additional anticompetitive effects, including impeding the expansion of
existing competitors and delaying entry of new small-business
competitors who could challenge Rollins.\17\
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\15\ Id. ] 11.
\16\ See id. ]] 11-12.
\17\ See id. ]] 13-14.
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Turning to the procompetitive interests that could justify these
onerous agreements, we come up nearly empty. As the Complaint charges,
Rollins did not need the challenged provisions to continue making any
capital investments in training or the development of associated
proprietary information--in fact, Rollins's pest control methods are
publicly accessible on the internet, so they are hardly a secret.\18\
The majority of Rollins's workforce in the U.S. is comprised of pest
control technicians and customer service representatives.\19\ Although
technicians are critical to providing pest-control services, their job
duties do not require access to proprietary information that may
justify noncompete restrictions in other circumstances. Rollins's
technicians had access to customer lists, and Rollins has an interest
in protecting those lists to safeguard customer relationships and
client goodwill. But Rollins has available to it the less restrictive
alternative of narrowly tailored non-solicitation provisions to
vindicate those interests.\20\ And, indeed, Rollins has available to it
the alternative of tailored non-solicitation agreements.\21\ Therefore,
Rollins's noncompete agreements flunk the test as to these categories
of Rollins employees and those similarly situated.
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\18\ Id. ] 15.
\19\ See id. ] 9.
\20\ Id. ]] 15-16.
\21\ Cf. Order at Section II.D.
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Nevertheless, the Commission's Order today, as was the case in
Gateway,\22\ recognizes that noncompete agreements can have their
(limited) place--it
[[Page 21501]]
excludes from the prohibition certain employees who do meet a
heightened bar for access to competitively sensitive information. That
list includes directors, officers, or other defined senior leaders who
exercise policy-making authority and are eligible for grants of equity
or equity-based interests in Rollins as a benefit of employment.\23\
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\22\ Decision and Order, In re Gateway Pet Mem'l Servs., Matter
No. 2210170, Section I.F (Nov. 25, 2025).
\23\ Order at Section II; see also Order at Section I.D.
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Today's Order is consistent with the enforcement approach the
Commission announced in 2025. We follow the general common-law rule
from which our antitrust laws arose that noncompete agreements are
lawful when they go no further than necessary to protect specific,
identifiable, valid interests of the employer that could not be
protected without the noncompete agreement.\24\ But we demand exacting
proof to ensure that the dangers of unfair or anticompetitive
noncompete agreements do not take hold. And the Commission will
continue to act against noncompete agreements that unlawfully limit
worker mobility and access to job opportunities, which in turn deny
consumers the benefits of vigorous competition.
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\24\ See Ferguson Gateway Statement at 7, n.50 (citing Horner v.
Graves, 131 Eng. Rep. 284, 287 (C.P. 1831) (English courts upheld
noncompete agreements if ``the restraint is such only as to afford a
fair protection to the interests of the party in favour of whom it
is given, and not so large as to interfere with the interests of the
public.''); 15 Corbin on Contracts Sec. 80.6 (2024) (describing
multifactor reasonableness test); Restatement (2d) of Contracts
Sec. 188 (1981) (same); United States v. Addyston Pipe & Steel Co.,
85 F. 271, 281 (6th Cir. 1898), aff'd, 175 U.S. 211 (1899)
(collecting cases and relating noncompete agreements' treatment at
common law to antitrust principles).
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[FR Doc. 2026-07844 Filed 4-21-26; 8:45 am]
BILLING CODE 6750-01-P