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Supreme Court’s Decision on Arbitration of Noncompetes

Posted in Business Litigation, Noncompete Agreements, Other Legal Issues

Noncompetes are generally thought of as unique agreements given the varying way states view the restrictive covenants imposed on employees by such agreements. The U.S. Supreme Court recently clarified that that Federal Arbitration Act, 9 U. S. C. §1 et seq., requires arbitration, not litigation, as the proper dispute resolution method for determining enforceability of noncompetes if the applicable noncompete agreement contains an enforceable arbitration clause. In, NITRO-LIFT TECHNOLOGIES, L. L. C. v. EDDIE LEE HOWARD, the Supreme Court vacated the Oklahoma Supreme Court’s decision that the state court was the proper forum for deciding whether the particular noncompete was enforceable under state law.