Following the late-2025 vacatur of the Federal Trade Commission's sweeping rule that would have broadly banned noncompete agreements, the agency has not retreated from the issue. Instead, it has recalibrated its approach, pursuing noncompete restrictions on a case-by-case basis under Section 5 of the FTC Act. For employers that may have assumed the rule's defeat ended federal scrutiny of restrictive covenants, recent enforcement activity offers a clear and important corrective.
The agency's current posture was put on vivid display when it ordered Rollins, Inc. to cease enforcing noncompete agreements covering more than 18,000 employees. In tandem with that action, the FTC issued warning letters to 13 additional pest-control companies, signaling that scrutiny of restrictive covenants in this industry extends well beyond a single employer. The message to the broader pest-control sector is unmistakable: noncompete practices are being examined at the industry level, and companies that maintain expansive restrictions on rank-and-file workers should expect heightened attention.
The FTC has also identified healthcare employers and staffing firms as explicit enforcement priorities. Companies in these sectors should treat that signal seriously. The combination of workforce mobility concerns, public interest considerations around access to care, and the prevalence of broad restrictive covenants in clinical and staffing contexts makes these industries natural focal points for Section 5 review. Employers operating in healthcare or staffing should not wait for an inquiry letter to evaluate their exposure.
Practically, this enforcement environment calls for a careful audit of existing noncompete agreements. Employers should examine whether restrictions are narrowly tailored as to duration, geographic scope, and the categories of employees covered, and whether the legitimate business interests being protected are clearly articulated and defensible. Overbroad covenants applied indiscriminately across a workforce are precisely the category of restrictions drawing FTC attention. Where appropriate, employers may wish to consider alternatives such as targeted nonsolicitation provisions, confidentiality agreements, or trade secret protections that achieve similar protective aims with less regulatory risk.
This article is provided for general informational purposes and does not constitute legal advice. Employers should consult qualified counsel for guidance tailored to their specific circumstances and workforce.