US Supreme Court Upholds Arbitrators Authority to Decide the Validity of a Non-Compete Clause in an Arbitration Agreement

The US Supreme Court recently vacated a decision by the Oklahoma Supreme Court, holding that the national policy favoring arbitration found in the Federal Arbitration Act (“FAA”) and supporting case law, a policy which applies to both state and Federal courts, required that an arbitrator decide in the first instance whether a non-compete clause in a commercial contract was valid. Nitro-Lift Technologies v. Howard (Nov. 26, 2012)

The Court acknowledged that questions regarding the validity of an arbitration clause itself may be decided by a court, but questions regarding the validity of a contract which contains an arbitration clause for disputes arising thereunder are to be resolved by an arbitrator in the first instance.

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Topics:  Arbitration, Arbitration Agreements, Federal Arbitration Act, Nitro-Lift Technologies, Non-Compete Agreements, SCOTUS

Published In: Alternative Dispute Resolution (ADR) Updates, Business Torts Updates, General Business Updates, Franchise Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Peter S. Bauman - Senior Commercial Litigation Attorney Callahan & Blaine, (714) 241-4444 (office) / (949) 842-1720 (mobile) | Attorney Advertising

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