The Federal Trade Commission (FTC) is warning mortgage services provider Mortgage Connect about its use of noncompete agreements, urging the company to review and potentially discontinue restrictive covenants that may violate federal antitrust law.
Friday’s letter, signed by FTC Chairman Andrew N. Ferguson and addressed to Mortgage Connect’s outside counsel, was a reaction to information made public in ongoing litigation in a Pennsylvania state court.
“FTC staff has reviewed public materials from your client’s lawsuit seeking to enforce a noncompete agreement against a former worker and the competitor who hired her,” Ferguson wrote. “These materials indicate that Mortgage Connect may have broadly deployed unjustifiable noncompete agreements in employment contracts with potential adverse effects on workers and competition.”
Representatives for Mortgage Connect did not immediately reply to HousingWire’s request for comment.
According to Ferguson, evidence in the legal case suggests that Mortgage Connect requires all of its employees to sign noncompetes “without regard to the employee’s role or responsibilities.” But such blanket restrictions can burden workers, as well as smaller and new competitors, he added.
Ferguson also questioned whether the company’s stated reasons for using noncompetes (including the protection of confidential information, goodwill, reputation and employees’ specialized skills) could instead be addressed through less restrictive tools — for example, with nonsolicitation and nondisclosure agreements.
The court filings indicate Mortgage Connect already relies on these narrower restraints and that the employee at issue did not receive specialized training, the letter read.
The FTC did not take a position on the merits of the lawsuit and did not declare Mortgage Connect in violation of the law. Founded in 2008, Mortgage Connect is based in Coraopolis, Pennsylvania.
The warning letter is the latest in a series of actions signaling the FTC’s increased scrutiny of labor market practices, including in mortgage and real estate services.
Ferguson cited feedback the agency has received from mortgage industry participants who described noncompetes as “a huge problem” that reduce the pool of candidates and “hold loan officers, branch managers, and other employees hostage year after year.” This deters moves to competing mortgage firms and potentially chills recruiting efforts.
In February 2025, the FTC launched a Joint Labor Task Force to prioritize enforcement against deceptive, unfair and anticompetitive labor-market practices. In April 2026, it ordered Rollins Inc., one of the nation’s largest pest control companies, to stop enforcing noncompete agreements against more than 18,000 employees nationwide.
The agency has also pursued cases involving pet services and amenities management companies over labor restraints.
Flávia Furlan Nunes reported and wrote this article with drafting assistance from HousingWire Automation, an editorial tool that helps transform announcements and industry data into HousingWire-style news coverage.
