Last week, the Federal Trade Commission continued to take enforcement action against non-compete agreements. The agency ordered Rollins Inc, one of the largest U.S.’s pest control companies to stop enforcing noncompete agreements against more than 18,000 employees.
According to the FTC, the company required many workers to sign noncompetes that limited their ability to work for competitors after leaving the organization. These agreements prevented employees from working in the pest control industry within a 75-mile radius of Rollins’ 700 locations two years after their term at the company. The FTC alleges the non-competes were often presented as non-negotiable and did not provide additional compensation or meaningful consideration in exchange for the restriction.
Why Individualized Noncompetes Matter
Why This Matters for Staffing Firms
Why This Matters for Contingent Workers
What Employers Should Do to Ensure Compliance
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Since federal courts struck down a blanket ban on noncompetes in 2024, the FTC is now pursuing companies case-by-case for what it considers unfair or anti-competitive labor practices. As seen in this case, individualized noncompetes matter more because the FTC challenged the use of noncompete agreements that were overbroad and non-individualized, now requiring the company to stop enforcing those agreements and notify workers that they were no longer bound by them.
A core theme in the Rollins action is the FTC’s objection to broad restrictions imposed as a default condition of employment rather than as a narrowly tailored response to a specific business risk. Employers still treat noncompetes as a standard back-office tool, even when workers do not hold senior positions, do not control strategic customer relationships, and do not have access to unusually sensitive information.
In September 2025, FTC Chairman Andrew Ferguson sent warning letters to several large healthcare employers and staffing firms urging them to conduct a comprehensive review of their employment agreements and ensure that any noncompete provisions were appropriately tailored and compliant with the law. For employers, the lesson is that restrictive covenants should be reviewed worker by worker, role by role, and market by market rather than copied across entire business units.
The FTC has signaled that labor market practices in staffing and placement are within scope. This enforcement matters for staffing firms because the FTC specifically pointed to its earlier warning letters to large healthcare employers and staffing firms, demonstrating that the staffing industry should also pay attention to sector risk. Staffing firms often use restrictive covenants to protect customer relationships, assignment continuity, and redeployment economics, all of which can become problematic if the restrictions are broader than necessary.
The FTC’s September 2025 letters focused on healthcare employers and staffing firms, a context where worker shortages and patient-care access can magnify the competitive harm of restrictive covenants. The Rollins matter suggests the agency is willing to challenge noncompetes even outside the healthcare industry and specifically where employers rely on scale, standardization, and deterrence rather than individualized justification and narrow drafting
The Rollins action matters for contingent workers because the issues the FTC highlighted including limited bargaining power, standardized agreements, and restrictions imposed without individualized assessment, also appear in staffing and temporary work arrangements.
Contingent workers often sign onboarding documents quickly, have less leverage to negotiate restrictive terms, and may be subject to broad post-assignment limits that are disconnected from any unique exposure to trade secrets or client-specific strategy. The FTC’s reasoning suggests that a noncompete is at greater risk when it is used as a blanket retention device rather than a targeted protection measure. That is relevant where a worker is one of many placed into comparable roles, where the staffing firm’s true concern is client non-solicitation or conversion fees, or where narrower tools such as confidentiality clauses, trade-secret protections, and limited nonsolicitation terms could address the legitimate business concern without restricting future work opportunities.
In practice, that means staffing firms should expect scrutiny not only of noncompete clauses, but also of any restrictive terms that operate like a noncompete by preventing workers from accepting reasonable next-step opportunities.
To ensure compliance, employers should reevaluate how they use noncompetes, audit their restrictive covenants (ex: noncompetes, nonsolicitation clauses, or nondisclosure agreements) to ensure they protect legitimate business interests, rewrite those covenants to be as limited as possible, and stay up to date with state laws relating to noncompetes and nonsolicitation agreements.
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