WASHINGTON, D.C. — Federal Trade Commission Chairman Andrew N. Ferguson sent a warning letter to mortgage services provider Mortgage Connect urging the company to review its employment contracts, including noncompete agreements and other restrictive covenants, to ensure compliance with federal law.
The letter follows information disclosed in ongoing litigation in which Mortgage Connect is attempting to enforce a noncompete agreement against a former employee and a competing company that hired her.
According to the FTC, information contained in the lawsuit suggests Mortgage Connect may have used noncompete agreements that were not justifiable and could negatively affect workers and market competition.
Ferguson urged the company to discontinue any noncompete or restrictive agreements that are not reasonably necessary and to notify affected workers if those agreements are withdrawn.
The FTC said the action reflects its broader effort to investigate and challenge potentially anticompetitive labor practices involving noncompete agreements.
In February, the agency launched a Joint Labor Task Force focused on investigating deceptive, unfair and anticompetitive labor-market practices affecting workers.
The FTC also recently ordered Rollins Inc., one of the nation’s largest pest-control companies, to stop enforcing noncompete agreements against more than 18,000 employees nationwide.
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