Wyatt Employment Law Report

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U.S. Supreme Court Vacates State Court Decision That Had Refused to Allow Arbitration of Dispute Over a Non-Competition Agreement

By Edwin S. Hopson

The U.S. Supreme Court has just issued a decision re-affirming the supremacy of the Federal Arbitration Act over state laws purporting to limit arbitration.  In Nitro-Lift Technologies v. Eddie Lee Howard, et al., 568 U.S. ____ (2012), the court reversed the Oklahoma Supreme Court that had taken the position that a state law limiting the enforcement of non-competition agreements entered into by employers and their employees controlled as a matter of state law. The Oklahoma court had refused to allow the matter to be heard by an arbitrator as called for in the contract between Nitro-Lift and two of its employees who left to go to work for a competitor. The U.S. Supreme Court, in a Per Curiam opinion, vacated the Oklahoma Supreme Court decision and remanded the case to the state court with instructions to allow the issue of whether the non-competition agreement had been violated by the former employees to be heard by an arbitrator.