State file — Montana
Severance itself is almost never required by law — but the paper around your exit is. In Montana, three state rules shape your negotiation: when your last paycheck must arrive, whether a non-compete can follow you to your next job, and what notice a layoff required. If you are 40 or older, the federal clocks (21 or 45 days, plus 7 days to change your mind after signing) apply on top of everything here.
Federal rule only — no Montana consideration or revocation period for severance/settlement agreements beyond the federal OWBPA.
Run the deadline checker — it counts the federal clock and Montana's clock together and gives you the dates.
Hybrid: the statute says any contract restraining a lawful profession, trade, or business is void except for sale of business goodwill (§ 28-2-704) and partnership dissolution (§ 28-2-705), BUT Montana courts do NOT read § 28-2-703 as a California-style ban — they apply a rule of reason and enforce employment non-competes that are limited in time and place, supported by good consideration, afford only reasonable protection, and impose no unreasonable burden on the employee or the public. A non-compete is generally unenforceable against an employee terminated without cause who did not misappropriate trade secrets (Wrigg line of cases). Separate sector ban: HB 620 (signed May 13, 2025, effective Jan. 1, 2026) expands Mont. Code Ann. § 28-2-724 to void non-competes and patient non-solicits for ALL licensed physicians and other covered health care professionals in contracts made or renewed after Jan. 1, 2026 (sale-of-practice contracts excepted).
Why it matters at the exit table: a non-compete you sign on the way out can matter more than the severance check. If the clause would block your next job, narrowing it is one of the most common — and most granted — negotiation asks.
When an employee is separated for cause or laid off, all unpaid wages are due and payable immediately upon separation (administratively: within 4 hours or by the end of the business day, whichever is first), UNLESS the employer has a written personnel policy extending payment to the employee's next regular payday for the pay period or to within 15 days of separation, whichever occurs first.
Unused vacation: Once vacation is earned under the employer's policy it is considered wages and is due and payable like regular wages at separation (Attorney General Opinion, Vol. 23 No. 56, per MT DLI). 'Use it or lose it' vacation policies are prohibited; reasonable accrual caps are allowed. No law requires an employer to offer vacation in the first place.
Final pay is owed whether or not you sign anything. If the date passes without your money, your state labor agency takes these complaints — and many states add penalties for every day of delay.
Montana has no state layoff-notice law of its own, so the federal WARN Act is the rule: employers with 100+ workers generally owe 60 days' notice of a plant closing or mass layoff (50+ jobs at one site).
Notice failures have their own remedies (back pay for each day of missed notice, in the federal law's case) — separate from the severance agreement, and worth a question if your layoff was large and sudden.
Included in the $49 SeveranceDecoded Kit
One payment. Yours to keep. Works for any severance agreement, any state.
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