In Nitro-Lift Technologies, L.L.C. v Howard, (U.S. Nov. 26, 2012), Eddie Lee Howard and Shane D. Schneider (respondents) entered into a non-competition agreement with their employer, Nitro-Lift. The agreement contained an arbitration clause. When the respondents left and began working for one of Nitro-Lift's competitors, Nitro-Lift served them with a request for arbitration. The respondents ignored the request and filed suit in the Oklahoma state court, requesting that the non-competition agreement be declared null and void.

The state trial 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, however, the Oklahoma Supreme Court held that the existence of an arbitration agreement in an employment contract did not prohibit judicial review of the underlying agreement. The court went on to review the non-competition agreements and held that they were void and unenforceable as against Oklahoma's public policy.

Nitro-Lift appealed to the United States Supreme Court, arguing that federal law required the arbitrator, not the state court, to decide the contracts' validity.

In a per curiam opinion, the Supreme Court noted that it had jurisdiction over the case, based on questions of federal law governing interpretation of the Federal Arbitration Act (FAA). The court noted that it would not have jurisdiction over the case if the decision rested on "adequate and independent" state grounds, but that the Oklahoma Supreme Court's reliance on Oklahoma law was not independent because "it necessarily depended upon a rejection of the federal claim, which was both 'properly presented to' and 'addressed by' the state court."

The Supreme Court agreed with Nitro-Lift and held that the Oklahoma Supreme Court "chose to discount" and disregard controlling federal precedent on the FAA. The court emphasised that the substantive federal law created by the FAA is applicable in both state and federal courts. Under the FAA, when parties commit to arbitrate contractual disputes, attacks on the validity of the contract, as distinct from attacks on the validity of the arbitration clause itself, are to be resolved "by the arbitrator in the first instance, not by a federal or state court." Since arbitration clauses are severable from the remainder of the contract, if the arbitration provision is considered valid by an initial court determination, the validity of the remainder of the contract is for the arbitrator to decide.

The Supreme Court stated that, since the trial court found that the contract contained a valid arbitration clause, assessment of the validity of the remainder of the contract was reserved for the arbitrator. The Supreme Court faulted the Oklahoma Supreme Court because it assumed the arbitrator's role by declaring the non-competition agreements null and void. The Supreme Court stressed that the Oklahoma Supreme Court must abide by the FAA, which is "the supreme Law of the Land" according to the Supremacy Clause of the United States Constitution, and concluded that the FAA foreclosed precisely this type of "judicial hostility towards arbitration."

This case highlights the supremacy of the substantive federal law created by the FAA when state courts are assessing contracts with arbitration provisions. More generally, this case demonstrates the overriding strength of the national policy favouring arbitration.