Federal Arbitration Act Reigns Supreme
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In Nitro-Lift Technologies, L.L.C. v. Howard, 133 S. Ct. 500 (2012), the U.S. Supreme Court recently overturned a decision by the Oklahoma Supreme Court that enjoined an arbitration proceeding on the ground that the relevant provision of the underlying employment contract was flatly prohibited by Oklahoma law. According to the U.S. Supreme Court, the Oklahoma Supreme Court had no business interpreting the enforceability of the employment contract under Oklahoma law, at least not before the arbitrator was given the opportunity to rule on the same issue. In reversing the Oklahoma Supreme Court, via a stinging per curiam opinion issued after review of the defendant’s certiorari petition, the U.S. Supreme Court sent a clear message to all state courts that the Federal Arbitration Act precludes any interference with arbitration proceedings based upon valid arbitration agreements, even if those proceedings seek to enforce a contract provision that violates state law. The U.S. Supreme Court did not comment on what would happen if the appointed arbitrator found that Oklahoma law applied to the dispute but then ignored the Oklahoma Supreme Court’s substantive ruling and enforced the violative noncompete provision.
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