Eddie Lee Howard and Shane D. Schneider worked for NitroLift Technologies LLC. As a condition of employment, they entered into confidentiality and noncompetition agreements that contained a clause...


Eddie Lee Howard and Shane D. Schneider worked for NitroLift Technologies LLC. As a condition of employment, they entered into confidentiality and noncompetition agreements that contained a clause requiring any dispute between NitroLift and its employees to be settled in arbitration. After working for Nitro-Lift on wells in Oklahoma, Texas, and Arkansas, the plaintiffs quit and began working for one of Nitro-Lift’s competitors. Claiming that the plaintiffs had breached their noncompetition agreements, Nitro-Lift served them with a demand for arbitration. The plaintiffs then filed suit in the District Court of Johnston County, Oklahoma, asking the court to declare the noncompetition agreements null and void and to enjoin their enforcement. The court dismissed the complaint, finding that the contracts contained valid arbitration clauses under which an arbitrator, and not the court, must settle the parties’ disagreement. On appeal, the Oklahoma Supreme Court reversed, holding that despite the “[U.S.] Supreme Court cases on which the employers rely,” the “existence of an arbitration agreement in an employment contract does not prohibit judicial review of the underlying agreement.” Finding that the arbitration clauses were no obstacle to its review, the Oklahoma Supreme Court held that the noncompetition agreements were “void and unenforceable as against Oklahoma’s public policy,” expressed in an Oklahoma statute. Did the Oklahoma Supreme Court err in preventing the arbitration of the noncompetition agreement? Explain.

Jan 01, 2022
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