The United States Supreme Court recently overturned an Oklahoma Supreme Court decision regarding whether arbitration should be used to consider whether employees had violated non-compete agreements.
Nitro-Lift Techs., L.L.C. v. Howard, No. 11-1377, 568 U.S. ____ (US SC November 26, 2012).The Oklahoma Supreme Court had decided that because the evaluation of non-compete agreements was a state law issue, arbitration was not required.
The Supreme Court held that because the court’s reliance on Oklahoma law was not “independent”—it necessarily depended upon a rejection of the federal claim, which was both “‘properly presented to’” and “‘addressed by’” the state court. Howell v. Mississippi, 543 U. S. 440, 443 (2005) (per curiam) (quoting Adams v. Robertson, 520 U. S. 83, 86 (1997) (per curiam)).
Nitro-Lift claimed that the arbitrator should decide the contract’s validity, and raised a federal-law basis for that claim by relying on Supreme Court cases construing the FAA. “‘[A] litigant wishing to raise a federal issue can easily indicate the federal law basis for his claim in a state-court petition or brief . . . by citing in conjunction with the claim the federal source of law on which he relies or a case deciding such a claim on federal grounds . . . .’” Howell, supra, at 444 (quoting Baldwin v. Reese, 541 U. S. 27, 32 (2004); emphasis added). The Oklahoma Supreme Court acknowledged the cases on which Nitro-Lift relied, as well as their relevant holdings, but chose to discount these controlling decisions. Its conclusion that, despite Supreme Court’s jurisprudence, the underlying contract’s validity was purely a matter of state law for state-court determination is all the more reason for this Court to assert jurisdiction.
The Supreme Court must abide by the FAA, which is “the supreme Law of the Land,” U. S. Const., Art. VI, cl. 2, and by the opinions of the Supreme Court interpreting that law. “It is this Court’s responsibility to say what a statute means,and once the Court has spoken, it is the duty of other courts to respect that understanding of the governing rule of law.” Rivers v. Roadway Express, Inc., 511 U. S. 298, 312 (1994). Our cases hold that the FAA forecloses precisely this type of “judicial hostility towards arbitration.” AT&T Mobility LLC v. Concepcion, 563 U. S. ___, ___ (2011) (slip op., at 8).
The state court reasoned that Oklahoma’s statute “addressing the validity of covenants not to compete, must govern over the more general statute favoring arbitration” was incorrect. 273 P. 3d, at 26, n. 21. The ancient interpretive principle that the specific governs the general (generalia specialibus non derogant) applies only to conflict between laws of equivalent dignity. Where a specific statute, for example, conflicts with a general constitutional provision, the latter governs. And the same is true where a specific state statute conflicts with a general federal statute. There is no general-specific exception to the Supremacy Clause, U. S. Const. Art. VI, cl. 2. “‘[W]hen state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.’” Marmet Health Care Center, Inc. v. Brown, 565 U. S. ___, ___–___ (2012) (per curiam)(slip op., at 3–4) (quoting AT&T Mobility LLC, supra, at ___–___ (slip op., at 6–7)). Hence, it is for the arbitrator to decide in the first instance whether the covenants not to compete are valid as a matter of applicable state law. See Buckeye, 546 U. S., at 445–446.
For the foregoing reasons, the petition for certiorari was granted. The judgment of the Supreme Court of Oklahoma was vacated, and the case is remanded for proceedings not inconsistent with this opinion.
Based on the Nitro-Lift Techs., L.L.C. v. Howard case many courts will likely uphold arbitration clauses even regarding issues that have been state law issues for quite some time.
If you think your employment contract contains an arbitration provision, and you want to sue your employer you may want to hire an attorney. Madathil Law Office specializes in employment law in Nebraska, and offers free consultations.
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Nitro-Lift Techs., L.L.C. v. Howard, No. 11-1377, 568 U.S. ____ (US SC November 26, 2012).The Oklahoma Supreme Court had decided that because the evaluation of non-compete agreements was a state law issue, arbitration was not required.
The Supreme Court held that because the court’s reliance on Oklahoma law was not “independent”—it necessarily depended upon a rejection of the federal claim, which was both “‘properly presented to’” and “‘addressed by’” the state court. Howell v. Mississippi, 543 U. S. 440, 443 (2005) (per curiam) (quoting Adams v. Robertson, 520 U. S. 83, 86 (1997) (per curiam)).
Nitro-Lift claimed that the arbitrator should decide the contract’s validity, and raised a federal-law basis for that claim by relying on Supreme Court cases construing the FAA. “‘[A] litigant wishing to raise a federal issue can easily indicate the federal law basis for his claim in a state-court petition or brief . . . by citing in conjunction with the claim the federal source of law on which he relies or a case deciding such a claim on federal grounds . . . .’” Howell, supra, at 444 (quoting Baldwin v. Reese, 541 U. S. 27, 32 (2004); emphasis added). The Oklahoma Supreme Court acknowledged the cases on which Nitro-Lift relied, as well as their relevant holdings, but chose to discount these controlling decisions. Its conclusion that, despite Supreme Court’s jurisprudence, the underlying contract’s validity was purely a matter of state law for state-court determination is all the more reason for this Court to assert jurisdiction.The Supreme Court must abide by the FAA, which is “the supreme Law of the Land,” U. S. Const., Art. VI, cl. 2, and by the opinions of the Supreme Court interpreting that law. “It is this Court’s responsibility to say what a statute means,and once the Court has spoken, it is the duty of other courts to respect that understanding of the governing rule of law.” Rivers v. Roadway Express, Inc., 511 U. S. 298, 312 (1994). Our cases hold that the FAA forecloses precisely this type of “judicial hostility towards arbitration.” AT&T Mobility LLC v. Concepcion, 563 U. S. ___, ___ (2011) (slip op., at 8).
The state court reasoned that Oklahoma’s statute “addressing the validity of covenants not to compete, must govern over the more general statute favoring arbitration” was incorrect. 273 P. 3d, at 26, n. 21. The ancient interpretive principle that the specific governs the general (generalia specialibus non derogant) applies only to conflict between laws of equivalent dignity. Where a specific statute, for example, conflicts with a general constitutional provision, the latter governs. And the same is true where a specific state statute conflicts with a general federal statute. There is no general-specific exception to the Supremacy Clause, U. S. Const. Art. VI, cl. 2. “‘[W]hen state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.’” Marmet Health Care Center, Inc. v. Brown, 565 U. S. ___, ___–___ (2012) (per curiam)(slip op., at 3–4) (quoting AT&T Mobility LLC, supra, at ___–___ (slip op., at 6–7)). Hence, it is for the arbitrator to decide in the first instance whether the covenants not to compete are valid as a matter of applicable state law. See Buckeye, 546 U. S., at 445–446.
For the foregoing reasons, the petition for certiorari was granted. The judgment of the Supreme Court of Oklahoma was vacated, and the case is remanded for proceedings not inconsistent with this opinion.
Based on the Nitro-Lift Techs., L.L.C. v. Howard case many courts will likely uphold arbitration clauses even regarding issues that have been state law issues for quite some time.
If you think your employment contract contains an arbitration provision, and you want to sue your employer you may want to hire an attorney. Madathil Law Office specializes in employment law in Nebraska, and offers free consultations.
If you live in Omaha, Lincoln, Lancaster County, Douglas County, Otoe, or Cass Counties in Nebraska and you need an employment lawyer, consider contacting Angela Y. Madathil and the Madathil Law Firm. The firm serves clients in all of these areas.
Contact us at angela@madathil-law.com or by telephone at 402.577.0686. The firm offers free consultations. For more information feel free to look at our website www.madathil-law.com.
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