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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