November 29, 2012
Earlier this week, the Supreme Court issued a per curiam opinion in Nitro-Lift Technologies, L.L.C. v. Howard, 2012 WL 5895686 (Nov. 26, 2012), ruling that the FAA preempted a decision by the Supreme Court of Oklahoma to rule on the validity of a covenant not to compete in the first instance, despite the existence of an arbitration clause. The Court ruled that the Oklahoma high court blatantly and improperly ignored the Court’s FAA separability doctrine, which declares that arbitrators decide in the first instance the enforceability of contracts containing a pre-dispute arbitration clause. See Buckeye Check Cashing and Prima Paint. The decision offers no new law: it just reiterates and reaffirms fundamental principles of the Court’s FAA jurisprudence, including broad FAA preemption, separability, and the power of the arbitrators to decide the enforceability of contracts containing an arbitration clause.
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