If You Can’t Explain Why Each Employee Needs a Noncompete, You May Have a Problem

Over 18,000 pest-control workers were allegedly barred from competing with their former employer for two years after leaving. The FTC says that’s 18,000 too many.

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TL;DR: The FTC filed an administrative complaint against the parent company of Orkin and other pest-control brands, alleging that its blanket noncompete policy covering more than 18,000 employees violated Section 5 of the Federal Trade Commission Act. A proposed consent order accepted for public comment would prohibit the company from entering or enforcing noncompetes against most of its workforce and require it to notify current and former employees that existing agreements are void.

📄 Read the complaint | 📄 the FTC Chair’s statement | 📄 the proposed consent order

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Everyone Signs. No Exceptions. No Negotiation.

According to the FTC’s complaint, the company had a standing policy: every newly hired employee, regardless of position or responsibilities, was required to sign a noncompete. That included pest-control technicians and customer service representatives, the bulk of the workforce. The alleged terms prohibited work in the pest-control industry within 75 miles of the employee’s former location for two years post-employment. Employees often had little time to review the agreement, received no extra compensation for signing, and in some cases were handed the document in the field following a company acquisition.

When workers left, the company allegedly sent hundreds of cease-and-desist letters and filed lawsuits to enforce the agreements. The complaint notes that former employees often lacked the resources to fight back.

Why the Commission Says the Agreements Don’t Pass the Test

The FTC charged a violation of Section 5 of the Federal Trade Commission Act (FTC Act), which prohibits unfair methods of competition. The commission’s analysis found little procompetitive justification to offset the anticompetitive harm. The company’s pest-control methods are publicly available online. Technicians don’t access genuinely proprietary information. And narrowly tailored non-solicitation agreements, the commission concluded, would adequately protect legitimate customer relationship interests without blocking where former employees can work.

The proposed consent order, not yet final, would bar noncompetes for essentially the entire non-executive workforce. Senior leaders eligible for equity grants would remain covered. The company did not admit liability as part of the proposed settlement.

What This Means for Employers Using the Same Playbook

The FTC’s concern isn’t that noncompetes exist. It’s that a blanket policy applying identical restrictions to a front-line tech and a senior executive signals an absence of individualized analysis, and that absence undercuts the procompetitive justification that might otherwise save the agreement.

The “confidential information” rationale requires actual confidential information. Publicly available training materials and standard service methods didn’t clear that bar here. Employers relying on the trade-secrets justification should audit whether employees subject to noncompetes genuinely have access to sensitive, non-public information.

Non-solicitation agreements are now the documented safer default for most workers. The consent order explicitly identifies them as a less restrictive alternative. For employers primarily concerned with protecting customer relationships, a well-drafted non-solicitation provides meaningful protection with far less FTC Act exposure.

Tiered agreements by role reduce risk company-wide. The order’s carve-out for senior leaders reflects the commission’s view that noncompetes can be justified in limited circumstances. Calibrating agreements to actual access to sensitive information, rather than applying one standard across all employees, is what separates defensible practice from what the FTC just challenged.

Blanket noncompete policies applied to an entire workforce are a target. Agreements tied to legitimate, specific business interests are far more likely to hold. The question is whether employers can actually show the difference.