Employees can’t be asked to sign a noncompete to get their final paycheck

Q: Can we require an employee to sign a noncompete agreement before they receive their final paycheck?

The short answer is no, employees can’t be required to sign a noncompete agreement as a condition of receiving their final paycheck. For readers who aren’t familiar, a noncompete agreement is an agreement between an employer and an employee that restricts an employee’s ability to work in the same business in a certain geographical area for a limited amount of time. Usually, employees enter into these agreements at the commencement of their employment.

At the same time, an employer isn’t prohibited from asking an employee to sign a noncompete agreement in exchange for a new consideration because the agreement must satisfy the same elements as any contract. So, it’s important to recognize that the employee must agree to its terms. Failure to offer new consideration may make this agreement unenforceable.

With respect to the final paycheck, federal law doesn’t require employers to give the final paycheck immediately. Some states, however, may require immediate payment. For example, in West Virginia, whenever an employee is fired, quits, or resigns from employment, the employer must pay her final wages on or before the next regular payday.

In Tennessee, a terminated employee must be paid final wages by the next regular payday or 21 days following the termination, whichever comes later. The laws of North Carolina, South Carolina, and Kentucky are very similar to those of Tennessee and West Virginia.