Might differ State to State, but the US Department of Labor will always have the final say. No "employment contract" that allow conditions of employment will ever pass a Department of Labor case, or subsequent lawsuit. If your current or past employee was to file a claim with the DOL, claiming you garnished and/or with held wages for repayment of company owned property, I can guarantee you it will backfire on the employer. Worst case scenario the DOJ case could cost you three times the original "claim", plus your legal costs.
You can terminate the employee, but you can not deduct any monies owed to that employee.
Even if that employee was a friend, and owed you money from a personal loan, that personal loan can not be deducted from the wages earned. The employee must repay you separately (ie, cash or a check).
Your local Department of Labor office works with both employers and employees, and they will be happy to answer any questions you have. I learned the hard (headed) way, many years ago in a different business venture.
In some States a no compete contract is not worth the paper it is written on. Someone told me recently that California (go figure) a no compete contract is not a legal document. I have not researched this so do not take this as verified information. But my experience with the DOJ above is from personal experience.
Phillip, DJ and Wesley all provide excellent advice. It is an employers market these days, way too many highly qualified technicians out there looking to work. We receive at least a couple calls a week from someone who cold calls us looking for employment, many times they have worked for our legit competitors and have plenty of verifiable experience and references.