A Rollins pest-control tech pulls on the branded polo, loads the branded truck, and drives to a house to spray for termites using a method the company posted on its own YouTube channel. That tech signed a two-year noncompete with a 75-mile radius around any of the company's 700 locations. The clause had nothing left to guard.
"Protect your business with a noncompete." Every operator who has hired someone has heard this from a lawyer. It sounds like a strong move. It is not a strong move. It is a confession that you have nothing proprietary left to protect.
The Cost of the Facade
The FTC ordered Rollins to stop enforcing noncompete agreements against more than 18,000 workers earlier this spring. The order runs for ten years. The civil fine: $53,088 per violation. Before 2023, the FTC had never enforced antitrust law against a noncompete in this setting. The ground shifted.
Rollins had put nearly all its staff under these clauses. Techs. Customer-service reps. Workers whose daily tasks required no access to anything secret. The company imposed the agreements without extra pay and often without real explanation. One-third of workers across the country who sign these clauses see them only after they have already said yes to the job. The power runs one way from the start.
Then Rollins sent hundreds of cease-and-desist letters to former workers who left and started their own pest-control firms. Most of those workers lacked the money to fight back. They shut down their own businesses. Not because the clause would hold up in court. Because the cost of finding out was too high.
The clause did not work through law. It worked through friction.
Evan Starr, a researcher at the University of Maryland, has spent years studying this pattern. His findings, published in the Journal of Law and Economics and the Journal of Human Resources, show the mechanics plainly. States that enforce noncompetes see 12% fewer new firms. A broad national study found that banning noncompetes would raise the average worker's pay by 8.5%.
The noncompete does not fail people. It fails the system they are trying to run.
The Structural Flaw
That data tells us where the real problem sits. The problem is not that the clause is poorly written. The problem is that a blanket noncompete replaces the hard work of building something worth protecting.
FTC Chairman Andrew Ferguson put it in one line: "The days of unreflective, unjustified, and anticompetitive noncompete agreements are over." His own statement noted that Rollins's pest-control methods are publicly available on the internet. The work these techs did required no access to proprietary knowledge. The clause was a facade built on top of standard industry practice.
Here is the proof that the facade works even when the law does not back it. In California, noncompetes have been void under state law for decades. Yet 45.1% of firms in California still put them in their contracts. The clause works even when it cannot be enforced. That is not a legal tool. That is an intimidation tool with a legal shape.
What to Build Instead
The FTC order itself names the replacement: narrowly tailored nonsolicitation and NDA agreements. The agency that tore down the blanket clause told the company exactly what to use in its place. Once that is clear, three moves follow from it.
Move 1: Separate What Is Truly Proprietary From What Is Common Practice
List every method, process, and piece of knowledge your noncompete claims to protect. Then check how much of it shows up in a trade publication, a YouTube video, or a competitor's job posting. What remains after that test is your actual proprietary value. This requires an honest audit of what your business truly owns, not what it has always claimed to own. Most operators find the list is shorter than they thought.
Move 2: Write a Nonsolicitation Clause That Names the Asset
A nonsolicitation clause tells a former worker not to call your clients for a set period. It does not stop them from working in the field. It protects the relationship, which is the thing you actually built. Keep the radius tight. Keep the term short. Twelve months is defensible in most states. Two years across 700 locations is not.
Move 3: Use an NDA for What Is Genuinely Secret
Client lists. Pricing models. Internal margin data. Software you built in-house. These are real assets. An NDA protects them without blocking a worker from earning a living. The NDA is precise. The blanket noncompete is not. Courts can tell the difference, and so can the FTC.
What the System Shows You
Running this for 90 days does something the old advice never did.
You see which parts of your operation are truly distinct and which parts are industry standard dressed up as proprietary. You see which client ties hold because of value, not because of a legal threat backing them up. You see where your real edge sits. It is almost never in the methods. It is in the execution, the speed, and the trust you built over years.
The Feedback Loop
At the end of that 90-day window, ask three things.
→ Which client relationships held because of value, not because of a clause?
→ Which "trade secrets" turned out to be common knowledge in the field?
→ Which parts of the operation would survive if a competitor hired your best person next week?
That is the difference between advice that sounds right and a system that proves itself.
Where You Stand
Rollins posted its methods online for anyone to watch. Then it sued the people who watched. The FTC looked at that and put a price tag on it.
The techniques were never the asset. What you build around them is. If your business needs a blanket noncompete to survive, the clause is not the problem. The business model is.
