Noncompete Agreements for Crew Members After the FTC Rule Fell

“Can I stop a crew member from going to a competitor?” In much of the country you can still ask him to sign a promise not to. In a growing list of states that promise is void, and in some of them asking for it breaks the law. The federal ban you may have read about in 2024 never took effect. What decides the answer today is your state’s law, plus a Federal Trade Commission that still goes after noncompetes one company at a time, including a pest-control company in 2026. Here is where things stand, and what a non-solicit or confidentiality clause can do instead.

What happened to the FTC’s rule

In 2024 the FTC adopted a rule that would have banned almost all noncompete clauses for workers, effective September 4, 2024. It never took effect. On August 20, 2024, a federal court in Texas, in Ryan LLC v. FTC, held that the FTC had exceeded its statutory authority and that the rule was arbitrary and capricious, set the rule aside, and ordered that it not be enforced or take effect on September 4, 2024 or after. The FTC appealed. Then, on September 5, 2025, the Commission voted 3–1 to dismiss its appeals and accept the court’s ruling. The FTC’s own page now says the rule “is not in effect and it is not enforceable,” and the most recent Federal Register notice it lists, dated February 12, 2026, is titled in part “Removal of the Non-Compete Rule To Conform These Rules to Federal Court Decisions.”

The FTC still brings cases, including in home services

Dropping the rule did not mean dropping the issue. In his statement on the dismissal, Chairman Andrew Ferguson wrote that the Commission “will continue to enforce the antitrust laws aggressively against noncompete agreements,” and that firms in industries with many of them would receive warning letters.

On April 15, 2026, the FTC ordered Rollins, Inc., the parent of brands including Orkin, HomeTeam and Critter Control, to stop enforcing noncompetes against more than 18,000 employees. According to the FTC, the agreements typically barred workers from pest-control work for two years after leaving, within 75 miles of any of the company’s more than 700 U.S. locations, and covered pest-control technicians, customer-service representatives and other employees earning relatively low wages. The order requires Rollins to tell current and former employees they are free to compete, including by starting their own business. The FTC sent warning letters to 13 other pest-control companies and approved the final order on June 22, 2026. A two-year, wide-radius noncompete on hourly technicians is the kind of clause that case was about.

State law decides most of it

Noncompetes are mainly a matter of state law, and the states run from outright bans to statutes that tell courts to enforce reasonable ones. Eight that show the range:

California. Section 16600 voids any contract restraining someone from a lawful trade, and tells courts to read that broadly against any employment noncompete “no matter how narrowly tailored.” Section 16600.1 makes it unlawful to put one in an employment contract or require an employee to sign one. Section 16600.5 says a void contract is unenforceable “regardless of where and when the contract was signed,” and lets an employee or applicant sue for an injunction, actual damages and attorney’s fees.

Virginia. No employer may “enter into, enforce, or threaten to enforce” a noncompete with a low-wage employee, and the definition includes anyone, whatever he earns, who is entitled to overtime under federal law. An hourly crew member entitled to overtime is covered. The Commissioner can impose a $10,000 civil penalty for each violation, and every employer must post a copy of the section, or an approved summary, where its other required notices hang.

Illinois. Both noncompetes and non-solicits are “void and illegal with respect to individuals employed in construction,” except those who mainly do management, engineering or architectural, design or sales work, and owners. For other employees, a noncompete is allowed only above $75,000 a year ($80,000 from January 1, 2027) and a non-solicit only above $45,000 ($47,500 from 2027), and either one is void unless you advise the employee in writing to consult a lawyer and give him 14 calendar days to review it.

Wyoming. A noncompete restricting anyone’s right to be paid for “skilled or unskilled labor” is void, except for the sale of a business, protecting trade secrets, executive and management personnel and their professional staff, and a clause recovering relocation, education and training costs on a sliding scale: up to 100 percent if the employee leaves within two years, 66 percent in the third year and 33 percent in the fourth.

Florida goes the other way. Its statute lets a court enforce a restrictive covenant that is in a signed writing, reasonable in time, area and line of business, and supported by a legitimate business interest, such as trade secrets, valuable confidential information, substantial relationships with specific customers, goodwill in a specific area, or extraordinary or specialized training. Against a former employee, a court presumes six months or less reasonable and more than two years unreasonable.

What a non-solicit or confidentiality clause can do

What most owners actually want is narrower than a noncompete: do not take my customers, do not take my crew, do not take my price book. Several of these laws draw that line themselves.

• Minnesota says a covenant not to compete does not include a nondisclosure agreement, or a nonsolicitation agreement restricting the use of client lists or soliciting the employer’s customers.
• Oklahoma allows exactly one restriction: no direct solicitation of your established customers.
• Virginia says a noncompete may not stop an employee from serving your customer “if the employee does not initiate contact with or solicit the customer.” The customer who calls him is fair game.
• Illinois treats a non-solicit separately, with a lower pay floor, but for construction workers a non-solicit is void too.
• California tells courts to read its ban broadly. Ask a California employment lawyer before you rely on any clause that limits whom a former employee may serve.

A confidentiality agreement protects information, such as your customer list, pricing and supplier terms, rather than his right to work. If it governs trade secrets or other confidential information, federal law requires it to give notice of the whistleblower immunity in the Defend Trade Secrets Act, or a cross-reference to a policy document that sets out your reporting policy. Leave it out and you cannot recover exemplary damages or attorney’s fees from that employee in a trade-secret suit (18 U.S.C. §1833(b)(3)).

A worked example

Say a Virginia pest-control owner has an hourly technician who has run the same route for three years and gives two weeks’ notice to join a competitor. A noncompete is off the table: he is entitled to overtime, so he is a low-wage employee under the statute, and even threatening to enforce one is a violation. What the owner can still do is hold him to a confidentiality agreement over the customer list and pricing, if he signed one with the immunity notice, and make sure the customers know the company and not only the technician. If customers call him on their own, Virginia’s definition lets him serve them.

Move the same technician to Florida, with a signed six-month restriction tied to the specific customers he served. There a court starts from the presumption that six months is reasonable in time, but the owner still has to prove a legitimate business interest and that the restriction is reasonably necessary to protect it.

What to do this month

• Pull every agreement your crew has signed and check each against the law of the state where that person works.
• In California, Minnesota, North Dakota, Oklahoma, Wyoming, Virginia or Illinois, stop using a blanket noncompete for crew members. In Virginia, post the notice.
• Replace it with what your state allows: a confidentiality agreement with the immunity notice, and a non-solicit where the law permits one.
• Keep the customer relationship with the company: your business number on the truck and the invoice, and customer records in your system rather than on a technician’s personal phone.
• When someone leaves, collect company devices and keys, change shared passwords, and pay the last check on your state’s deadline. Final paychecks covers those deadlines.

These laws change: Minnesota’s ban arrived in 2023 and Wyoming’s in 2025, and the FTC has shown it will look at technicians’ contracts. Before you write a new restriction, check the current text of your state’s statute.

General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.