The Federal Trade Commission’s recent decision involving Rollins, Inc., one of the nation’s largest pest control companies, provides an important reminder for employers that non-compete agreements must be used sparingly, drafted carefully, and narrowly tailored to protect legitimate business interests.
Rollins, which provides commercial and residential pest control services, employs over 18,000 workers at more than 700 locations across the United States. The FTC investigated Rollins’ use of non-competes and ultimately ordered Rollins to cease using and enforcing non-competes against all employees except for senior level leadership. See FTC Press Release, dated April 15, 2026.
Although non-compete agreements remain an important tool for employers, Rollins highlights the risks of imposing broad restrictions on employees who do not possess highly sensitive information or occupy high-level positions.
Background
The FTC’s investigation alleged that Rollins required nearly all its employees, including pest control technicians and customer service representatives, to sign broad non-compete agreements prohibiting them from working in the pest control industry within 75 miles of their primary work location for 2 years after leaving Rollins. Employees allegedly were required to sign these non-competes regardless of their position or responsibilities, and when employees left Rollins for a competitor, Rollins allegedly went after them, sending cease and desist letters and initiating litigation, frequently against those with insufficient resources to defend themselves.
According to the FTC, “that sort of indiscriminate ‘general policy’ approach . . . cries out for scrutiny under antitrust laws.” See Statement of FTC Chairman Andrew N. Ferguson, dated April 15, 2026. The FTC emphasized that these onerous restrictions were not justified by pro-competitive interests. Rollins did not need the non-competes to invest in training employees or developing proprietary pest control methods, as its methods were already publicly available on its website and in YouTube videos. Moreover, its pest control technicians generally did not have access to proprietary information other than customer lists, which could be protected through less restrictive alternatives.
FTC’s Analytical Framework
When evaluating non-competes, the FTC applies a “reasonableness” balancing test, which assesses whether the anti-competitive effects outweigh the pro-competitive effects that could not be achieved through less restrictive means. Under this test, the FTC first looks at the anti-competitive effects of the restriction. Here, the broad non-competes, and Rollins’ enforcement of them, significantly curtailed competition. Employees at any level effectively could not leave, and those who did were forced to comply with Rollins’ demands. Second, the FTC looks at the pro-competitive interests that may justify the restrictions. Here, Rollins only needed the non-competes to protect its customer lists, customer goodwill, and relationships. While the FTC recognizes that these are important interests that warrant some protection, less restrictive alternatives were available to achieve the same level of protection, including non-solicitation agreements.
As a result, the FTC ordered Rollins to stop enforcing existing non-competes against its former employees and stop requiring new employees to sign them. The FTC made an important exception to this order, however, which demonstrates what the FTC believes to be an acceptable use of a non-compete. The FTC’s order excluded Rollins’ senior leadership, allowing Rollins to continue to use non-competes for, and enforce them against, its directors, officers and other decision-makers who are eligible for equity interest in the company. Non-competes for these employees are warranted under the reasonableness test because they have narrow application and are needed to protect the high-level strategic information or proprietary business knowledge these employees possess.
Lessons for Maryland Employers
Rollins is important because it sheds light on how the FTC intends to police non-competes. In September 2025, the FTC announced that it was shifting its focus from broad bans on non-compete agreements, which had been its prerogative in 2024, to case-by-case enforcement. While the Commission stated its intention to “patrol[] our markets for specific anticompetitive conduct” and “enforce the antitrust laws aggressively against noncompete agreements,” there was little guidance for employers about the nature and scope of this enforcement. Rollins provides that guidance.
A central lesson employers should take from Rollins is to avoid a “one size fits all” approach to restrictive covenants. Courts and regulators are increasingly focused on whether a restriction is reasonably connected to the employee’s actual role and whether the restriction goes further than necessary to protect the employer’s legitimate interests. For many employers, the primary concern is protecting confidential information, customer relationships, pricing information, and goodwill. But those interests often do not justify preventing an employee from working for a competitor altogether. In many circumstances, less restrictive tools, such as confidentiality agreements, trade secret protections, and non-solicitation provisions may adequately protect the employer’s interests without unnecessarily limiting employee mobility.
This lesson is particularly important for Maryland employers. Maryland courts and legislators typically disfavor broad restraints on trade and will closely examine whether a restriction is reasonable in scope, duration, and geographic reach. A restrictive covenant that is broader than necessary to protect the employer’s legitimate business interests may face significant enforcement challenges.
Employers should periodically review their employment agreements and consider whether each restrictive covenant is tied to the employee’s actual role and access to confidential information, customer relationships, or other protectable interests. To do this, ask yourself:
A non-compete agreement appropriate for a senior executive with access to strategic plans, proprietary technology, or acquisition information may not be appropriate for an employee whose primary access is limited to customer contact information or routine business practices.
Conclusion
The Rollins decision does not mean that employers cannot use non-competes. Rather, it reinforces a long-standing principle: restrictive covenants should be targeted, reasonable, and designed to protect legitimate business interests, not simply to prevent competition. A carefully drafted restrictive covenant agreement is more likely to withstand scrutiny and achieve its intended purpose. Broad restrictions imposed indiscriminately across an entire workforce may create unnecessary legal risk and attract regulatory attention.
The attorneys at Luchansky Law can help you craft strategic, compliant restrictive covenants tailored to protect your business interests while minimizing legal risk. I would welcome the opportunity to discuss with you how. For more information, call me at Luchansky Law 410.522.1020, or email me at ari@luchanskylaw.com.
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