FTC Cracks Down on Noncompetes, Orders Pest-Control Giant to Free 18,000 Workers and Advances Nationwide Ban

The Federal Trade Commission has intensified its crackdown on noncompete agreements, ordering a major U.S. pest-control company to stop enforcing such contracts against thousands of workers while advancing a broader nationwide ban the agency says will boost wages, innovation, and business formation.

In its latest enforcement action, the FTC ordered Rollins, Inc.—one of the largest pest-control companies in the country and parent to brands including Orkin, HomeTeam, and Critter Control—to cease enforcing noncompete agreements affecting more than 18,000 employees nationwide. The agency also sent warning letters to 13 other pest-control companies, urging them to review employment contracts for potentially unlawful or anticompetitive provisions.

The action against Rollins follows a complaint alleging the company imposed noncompete agreements on nearly all employees, from technicians to customer service staff, many of whom earned relatively low wages. The agreements typically barred workers from taking jobs in the pest-control industry for two years after leaving the company and restricted employment within a 75-mile radius of more than 700 Rollins locations across the United States.

According to the FTC, workers often had little or no ability to negotiate these agreements, received no additional compensation for signing them, and were given limited time to review the terms. The agency further alleged that Rollins issued hundreds of cease-and-desist letters and filed lawsuits against former employees accused of violating the noncompete provisions.

Regulators said the agreements limited worker mobility, reduced job opportunities, and suppressed wages and benefits, while also restricting competition by discouraging employees from joining rival firms or starting their own businesses.

Under a proposed consent order, Rollins must stop entering into, enforcing, or threatening to enforce noncompete agreements and must notify current and former employees that such provisions are no longer in effect. Workers will be informed they are free to seek employment with competitors or start their own businesses.

“Once again, the FTC is fighting for American workers to ensure that they have the freedom to pursue new job opportunities and better pay,” said Daniel Guarnera, director of the FTC’s Bureau of Competition. He added that the economy functions best when workers are not constrained by agreements that limit mobility and earnings potential.

The enforcement action comes as the FTC moves forward with a sweeping rule finalized in 2024 that bans noncompete agreements nationwide. The rule, issued after a public comment period that drew more than 26,000 responses—most in support—declares noncompetes an unfair method of competition under the FTC Act.

The agency estimates that roughly 30 million U.S. workers, or nearly one in five, are currently subject to noncompete clauses. These agreements often force workers to remain in jobs they wish to leave or face significant consequences such as relocating, switching to lower-paying fields, or exiting the workforce altogether.

Under the new rule, existing noncompetes for most workers will become unenforceable after the rule takes effect. Employers will be required to notify affected workers that the agreements will not be enforced. A narrow exception allows existing noncompetes for senior executives—defined as workers earning more than $151,164 annually in policymaking roles—to remain in place, though employers are barred from entering into new noncompetes even for those individuals.

FTC Chair Lina M. Khan said the rule is intended to restore worker freedom and stimulate economic growth. The agency projects that banning noncompetes will increase new business formation by 2.7% annually, resulting in more than 8,500 additional businesses each year.

The FTC also estimates the rule will raise average worker earnings by approximately $524 per year and reduce health care costs by up to $194 billion over the next decade. In addition, officials expect the policy to spur innovation, generating between 17,000 and 29,000 additional patents annually over the next 10 years.

The Commission concluded that noncompetes harm both labor and product markets by limiting competition, increasing market concentration, and contributing to higher prices for consumers. As alternatives, regulators pointed to existing legal tools such as trade secret protections and non-disclosure agreements, which are already used by a majority of workers subject to noncompetes.

The FTC’s recent actions are part of a broader enforcement effort targeting anticompetitive labor practices. The agency has also ordered other companies to stop enforcing restrictive employment agreements and has issued warnings across multiple industries, including healthcare and staffing.

In the pest-control sector, the FTC’s warning letters cautioned companies that noncompete agreements can lead to reduced wages, fewer job opportunities, and barriers to new business entry. Firms were urged to review their employment practices to ensure compliance with antitrust and consumer protection laws.

Authorities are taking multiple steps to curb anticompetitive labor practices: banning a major pet cremation company from enforcing noncompete clauses on about 1,800 workers, stopping Adamas Amenity Services and related firms from using no-hire agreements, and urging large healthcare employers and staffing agencies to review their employment contracts to ensure legal compliance.

Officials said the combined rulemaking and enforcement actions reflect a coordinated push to eliminate practices that restrict worker mobility and hinder competition across the U.S. economy.

FTC moves to halt alleged collusion among major ad agencies over “brand safety” standards

The Federal Trade Commission on Monday announced action against several of the world’s largest advertising agencies, accusing them of colluding to impose uniform “brand safety” standards that distorted competition in the digital advertising market.

According to a complaint filed in federal court, agencies including WPP, Publicis and Dentsu coordinated beginning in 2018 to adopt common standards that governed where ads could appear online. The FTC alleges the companies worked alongside rivals Omnicom and Interpublic Group through industry groups to create what it describes as a “brand safety floor” aimed at limiting the placement of ads next to content labeled as misinformation.

Regulators said that arrangement reduced competition by preventing agencies from independently developing and marketing their own brand-safety tools, which are typically used by advertisers to avoid reputational risks. Instead, the FTC argues, the coordinated standards insulated firms from normal competitive pressures such as price and quality.

The complaint also points to the role of third-party organizations, including NewsGuard and Global Disinformation Index, which the agency said were used to classify content in ways that could limit advertising revenue for certain publishers. Regulators allege that sites flagged under these standards risked being broadly excluded from ad placements.

To settle the charges, the agencies agreed to a proposed court order that would bar them from coordinating on shared brand-safety standards or engaging in similar conduct in the future. The order must still be approved by a federal judge.

FTC Chair Andrew N. Ferguson said the alleged conduct undermined both market competition and the broader flow of information online. He argued that the agreement deprived advertisers of customized options and may have affected which voices could generate revenue in the digital ecosystem.

The case was filed in the U.S. District Court for the Northern District of Texas, with support from a coalition of states including Florida, Texas and Utah. Separate but similar orders are being applied to Omnicom and Interpublic Group.

The FTC said the action is part of a broader effort to ensure that digital advertising markets remain competitive and free from coordinated practices that could influence both pricing and the availability of online content.