Noncompete Update: FTC Crackdowns and the New Kansas Statute

By Tara Eberline, Partner-in-Charge at Foulston Siefkin LLP & Scott Nehrbass, Trial Lawyer at Fouslton Siefkin LLP

Noncompete agreements can touch every industry, and lately, there has been an uptick in noncompete litigation and confusion among the masses.

Urban myths that noncompete agreements “aren’t worth the paper they’re written on” and have been “banned by the federal government” persist. Meanwhile, the Federal Trade Commission, or FTC, has actively targeted certain industries for overuse of noncompete agreements.

And right here in Kansas, our newly enacted noncompete statute is already becoming the subject of litigation. In this climate, clarity on the current regulatory reality is essential for businesses.

Under the Biden administration, the FTC threatened to ban noncompete agreements nationwide. A federal lawsuit and Trump’s election ended those efforts. However, the FTC has continued to scrutinize and stand up against “unfair and anticompetitive” noncompete agreements in particular industries.

For example, the FTC recently targeted the overuse of noncompete agreements in the pest control industry. On June 22, 2026, the FTC finalized a consent order against Rollins, Inc., one of the largest pest-control companies in the United States. Rollins imposed noncompete agreements on nearly all its employees (more than 18,000 nationwide), typically prohibiting them from working for another pest-control provider within a 75-mile radius of a Rollins location for two years after ending their employment with Rollins.

According to the FTC’s complaint, a “broad range” of employees were required to execute the noncompete agreements, including pest-control technicians, customer service representatives and “other employees earning relatively low wages.” The FTC noted these employees lacked the ability to negotiate the agreement, had little opportunity to “fully consider and understand the agreement,” and were not provided any additional pay or other consideration in exchange for signing the agreement.

The FTC determined that these factors, and others, likely caused the employees lower wages, reduced benefits, less favorable working conditions and “personal hardship.” In the consent order with the FTC, Rollins agreed to stop enforcing these noncompete agreements against thousands of these employees. The final consent order also imposes other conditions, including requiring Rollins to provide notice to current and former employees that they are no longer subject to a noncompete agreement and that they can compete against Rollins, including by starting their own pest control business.

At the same time, the FTC sent warning letters to 13 other companies in the pest-control industry, encouraging them to conduct a comprehensive review of any restrictive covenant agreements to “ensure that they comply with applicable laws and are appropriately tailored to the circumstances.” In the letters, the FTC indicated that its review of the industry suggested that other pest-control companies maintained agreements similar to Rollins’ noncompete, thereby similarly imposing the same “unlawful worker restraints” on employees.

In a statement discussing the Rollins complaint, FTC Chairman Andrew Ferguson indicated the FTC would continue to take action against noncompete agreements that unlawfully limit worker mobility and access to job opportunities, which, in turn, “deny consumers the benefits of vigorous competition.”

CURRENT STATUS:
ARE NONCOMPETE AGREEMENTS ENFORCEABLEIN KANSAS?

While the federal government and many states have been increasing restrictions on restrictive covenants, Kansas recently passed the first anniversary of Senate Bill 241, which provided Kansas businesses with additional assurances they will receive the benefit of the restrictive covenants they execute.

Effective July 1, 2025, SB 241 amended the Kansas Restraint of Trade Act (“Act”) with respect to non-solicitation agreements. The amendment created a conclusive presumption that customer non-solicitation provisions are enforceable if they are:

• Limited to material contact customers and

• Limited to a restricted period that does not continue for more than two years following the end of the employee’s employment (K.S.A. 50-163(c)(5)).

Employee non-solicitation provisions are enforceable if they are:

• For the protection of confidential or trade secret information or

• For a period not continuing more than two years following an employee’s employment (K.S.A. 50-163(c)(4)).

SB 241 provided similar assurances to business owners in connection with the sale and purchase of business entities. The amended Act created a conclusive presumption that non-solicitation agreements are enforceable if they are limited to no more than four years following the business owner’s involvement in the business entity, and for customer non-solicitation agreements, if they are limited to material contact customers (K.S.A. 50-163(c)(2)-(3)).

As amended, the Act expressly requires courts to modify any covenant found to be overbroad and directs courts to enforce the covenant as modified to protect the interests of the parties. Prior to SB 241, judicial reformation of overbroad covenants was permissible. Under the amended Act, judicial reformation is mandatory.