The chairman of the Federal Trade Commission sent a warning letter Friday to national mortgage services provider Mortgage Connect over employee contracts.

Andrew Ferguson, who has served as the agency's commissioner since April 2024, urged the company to review its employment contracts, including any noncompete agreements or other restrictive covenants, to ensure they are appropriately tailored and comply with the law.

The letter comes as a response to material made public in an ongoing lawsuit, Mortgage Connect, L.P. v. Melissa Harvey & First Title & Escrow, Inc., in which Mortgage Connect seeks to enforce a noncomplete agreement against a former employee and the competitor that hired her. The materials indicate the company may have used unjustifiable nonagreements in employment contacts with potential adverse effects on workers and compensation, according to the letter.

"Aside from unfairly burdening workers, this practice may have the effect of depriving smaller competitors and new entrants from hiring workers with relevant experience who could enable them to compete against Mortgage Connect," the letter said. "It appears that at least some of Mortgage Connect's purported procompetitive aims for using and enforcing noncompete agreements ... may be achieved through less restrictive means."

The letter suggests Mortgage Connect review and end the use of any noncompete or other agreements that aren't necessary and to notify relevant workers of any changes made.

The letter is the latest action the FTC has taken to investigate potentially anticompetitive noncompete agreements and bring enforcement actions to restore competition. The agency launched a Joint Labor Task Force to find and prosecute deceptive, unfair and anticompetitive labor-market practices that harm Americans, according to a press release.

The FTC recently ordered Rollins Inc., a pest control company, to stop enforcing noncomplete agreements against its more than 18,000 employees.

Sen. Josh Hawley, R-Mo., also launched his own investigation into Fair Isaac Corp., emphasizing prior criticism of a "monopoly." Hawley urged the FTC in March to start an investigation of its own in a letter to the agency.

Prior to taking over as chairman, Ferguson served as solicitor general of the Commonwealth of Virginia and chief counsel to Sen. Mitch McConnell, R-Ky.