McMullen v. Meijer Inc ( 2004 )

RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 McMullen v. Meijer, Inc. No. 01-1211
ELECTRONIC CITATION: 2004 FED App. 0015A (6th Cir.)
File Name: 04a0015a.06 MEIJER, Grand Rapids, Michigan, for Appellee.
ON BRIEF: Patrick M. Kirby, Flint, Michigan, for
Appellant. Jeffrey Scott Rueble, ASSISTANT GENERAL
UNITED STATES COURT OF APPEALS COUNSEL, MEIJER, Grand Rapids, Michigan, for Appellee.
FOR THE SIXTH CIRCUIT _____________________
_________________
AMENDED OPINION
WENDY MCMULLEN, X _____________________
Plaintiff-Appellant, -
- PER CURIAM. Appellant Wendy McMullen brought this
- No. 01-1211 action against her former employer, Meijer Inc., seeking a
v. - declaratory judgment that her Title VII claims are not subject
> to the mandatory pre-dispute arbitration agreement she signed
, upon accepting employment with Meijer. Although
MEIJER, INCORPORATED , -
Defendant-Appellee. - McMullen acknowledges that the terms of the arbitration
agreement cover her statutory employment discrimination
N claims, she contends that the arbitration agreement is
Appeal from the United States District Court unenforceable with regard to her Title VII claims because it
for the Eastern District of Michigan at Detroit. grants Meijer exclusive control over the pool of potential
No. 99-71206—Anna Diggs Taylor, District Judge. arbitrators from which the arbitrator is selected.
Argued: February 7, 2003 After initially denying Meijer’s summary judgment motion,
the district court reconsidered and granted summary judgment
Decided and Filed: January 14, 2004 in favor of Meijer in light of a perceived change in controlling
case law. McMullen appeals the grant of summary judgment
Before: GILMAN and GIBBONS, Circuit Judges; in favor of Meijer and also the denial of her summary
ECONOMUS, District Judge.* judgment motion. We reverse both rulings because we find
that Meijer’s exclusive control over the pool of potential
_________________ arbitrators prevents McMullen from effectively vindicating
her statutory rights. However, we also find that an issue
COUNSEL remains as to whether the arbitrator-selection provision can be
severed from the rest of the arbitration agreement. Therefore,
ARGUED: Patrick M. Kirby, Flint, Michigan, for Appellant. we remand to the district court for further proceedings
Jeffrey Scott Rueble, ASSISTANT GENERAL COUNSEL, consistent with this opinion.
*
The Honorable Peter C. Economus, United States District Judge for
the Northern District of O hio, sitting by designation.
1
No. 01-1211 McMullen v. Meijer, Inc. 3 4 McMullen v. Meijer, Inc. No. 01-1211
I. then signed a form acknowledging receipt of the handbook
and assenting to the company’s policies and procedures.
In 1989, Meijer hired McMullen as a store detective at its
store in Flint, Michigan. McMullen faced discipline in 1998 Upon instituting termination appeal proceedings,
for an incident involving her pursuit and confrontation of a McMullen argued that her discharge had been motivated by
juvenile shoplifter in the store parking lot. Meijer offered an intent to discriminate against her on the basis of her
McMullen a choice between demotion with a 33% decrease gender. Meijer denied her appeal internally and informed her
in salary, or outright termination. McMullen chose that, “[i]f you would like to contest the results of this further
termination and decided to challenge her discipline through review, you must request an arbitration hearing . . . .”
Meijer’s termination appeal procedure (TAP). Subsequently, McMullen signed and filed the necessary
paperwork to begin the arbitral process.
The terms of the TAP establish a two-step procedure
requiring binding arbitration of all disputes arising out of Once an arbitration hearing is requested, the TAP grants
termination of employment. The TAP expressly incorporates Meijer the right to unilaterally select a pool of at least five
the Employment Dispute Resolution Rules of the American potential arbitrators, each of whom must be: (1) an attorney,
Arbitration Association (AAA).1 Further, the TAP (2) unemployed by and unaffiliated with the company,
specifically asserts that: (3) generally recognized as a neutral and experienced labor
and employment arbitrator, and (4) listed on the rosters of the
This procedure is intended to be the sole and exclusive Federal Mediation and Conciliation Service (FMCS) or the
remedy and forum for all claims arising out of or relating AAA, as well as other arbitration rosters.2 Then, counsel for
to an eligible team member’s termination from the company and the aggrieved employee mutually select an
employment. arbitrator from that pool by alternatively striking names until
only one remains. On August 20, 1998, counsel for
The decision and award of the arbitrator is final and McMullen and Meijer, following this procedure, selected
binding between the parties as to all claims arising out of arbitrator William Daniel to hear McMullen’s appeal.3
or relating to an [sic] team member’s termination from
employment which were or could have been raised at any Several months later, and only one day prior to the
step in this procedure and judgment may be entered on scheduled date of the arbitration hearing, McMullen filed this
the award in any circuit court or other court of competent declaratory judgment action in state court challenging the
jurisdiction. fairness of the TAP’s arbitrator-selection process. Asserting
federal question jurisdiction, Meijer removed the action to the
Contemporaneous to hiring McMullen, Meijer had
provided her with a copy of an employee handbook
describing both the TAP and the company’s policy of 2
At the time McM ullen initiated the TAP process, Meijer maintained
terminating employees only with “just cause.” McMullen had a standing panel of potential arbitrators that it used for every arbitration
in which it participated in the state of Michigan.
1 3
The American Arbitration Association, a non-profit public service As a member of Meijer’s standing panel of potential arbitrators in
organization, assists in the design of alternative dispute resolution systems Michigan, Daniel had served as the arbitrator in seven arbitrations
for corpo rations, unions, govern ment agenc ies, law firms and the courts. involving M eijer by the time M cM ullen initiated the TAP process.
No. 01-1211 McMullen v. Meijer, Inc. 5 6 McMullen v. Meijer, Inc. No. 01-1211
United States District Court for the Eastern District of II.
Michigan.
The district court’s decision to grant Meijer’s motion for
On December 13, 1999, Meijer brought a motion to compel summary judgment is reviewed de novo, Smith v. Ameritech,
arbitration and for summary judgment. On March 23, 2000, 129 F.3d 857, 863 (6th Cir. 1997), as is the district court’s
the district court denied both motions from the bench. The decision to grant Meijer’s motion to compel arbitration,
court’s ruling indicated that the procedures used by Meijer to Wiepking v. Prudential-Bache Securities, Inc., 940 F.2d 996,
select an arbitrator did not comport with the requisite level of 998 (6th Cir. 1991). Similarly, the district court’s decisions
fairness for such mandatory-arbitration contracts to be regarding the existence of a valid arbitration agreement and
binding. In conjunction with its decision, the court criticized the arbitrability of a particular dispute are reviewed de novo.
the extent of control exercised by Meijer over the arbitral Floss v. Ryan’s Family Steakhouses, Inc., 211 F.3d 306, 311
panel. The court also stated, “I’m sorry that there were not (6th Cir. 2000). A district court’s denial of summary
cross motions in the case. There weren’t, so we’ll still have judgment is an interlocutory order that is not ordinarily
this case alive here.” appealable, but when the appeal from a denial of summary
judgment is presented together with an appeal from a grant of
On September 21, 2000, McMullen moved for summary summary judgment, we have jurisdiction to review the denial.
judgment. On October 2, 2000, Meijer moved for Thomas v. United States, 166 F.3d 825, 828 (6th Cir. 1999).
reconsideration of its earlier motions based on this court’s When a district court denies a motion for summary judgment
intervening decision in Haskins v. Prudential Insurance because it determines that there exists a genuine issue of
Company of America, 230 F.3d 231 (6th Cir. 2000). The material fact, we review the denial only for an abuse of
district court held a hearing on the motions on November 27, discretion. Garner v. Memphis Police Dep’t, 8 F.3d 358, 363
2000, and subsequently denied McMullen’s motion for (6th Cir. 1993). When, however, the district court denies
summary judgment, granted Meijer’s motion for summary judgment based solely upon legal grounds, we
reconsideration, and, upon reconsideration, granted Meijer’s review the denial de novo. Id. Because the district court
motions for summary judgment and to compel arbitration.4 denied McMullen’s summary judgment motion solely upon
legal grounds, we review this denial de novo.
The Supreme Court has held that agreements to arbitrate
employment disputes as a condition of employment are
4 generally enforceable under the Federal Arbitration Act,
The district judge’s decisions on the motions for summary judgment
consisted of brief oral rulings from the bench, rather than written 9 U.S.C. § 1 et seq. (FAA). Circuit City Stores, Inc. v.
opinions. W ith regard to the propriety of issuing oral rulings on summary Adams, 532 U.S. 105, 109 (2001). This court has consistently
judgment motions, unaccompanied by written findings, this court upheld the validity of pre-dispute mandatory arbitration
previously has noted:
This reviewing court, and more importantly, the parties, are
agreements. Haskins, 230 F.3d at 239; Willis v. Dean Witter
much better se rved when, as is the custom in this circuit, the Reynolds, Inc., 948 F.2d 305, 310 (6th Cir. 1991). It is well
district court prepares a written opinion explaining its ruling and settled that judicial protection of pre-dispute arbitral
the reasoning, factual and legal, in support, especially when the agreements extends to agreements to arbitrate statutory
ruling disposes of the case in a final judgment. employment discrimination claims. Gilmer v.
Peck v. Bridgeport Machines, Inc., 237 F.3d 61 4, 617 (6th Cir. 2001).
This observation is equally appropriate here.
Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991);
No. 01-1211 McMullen v. Meijer, Inc. 7 8 McMullen v. Meijer, Inc. No. 01-1211
Willis, 948 F.2d at 312. Arbitration of statutory claims is McMullen did not agree to waive any right to sue by
appropriate because “[b]y agreeing to arbitrate a statutory signing this form. The form was merely an administrative
claim, a party does not forgo the substantive rights afforded step required to initiate the arbitration process that McMullen
by the statute; it only submits to their resolution in an arbitral, agreed to upon her hire. The form itself does not constitute an
rather than a judicial, forum.” Gilmer, 500 U.S. at 26 arbitration agreement because it contains no promise not to
(quoting Mitsubishi Motors Corp. v. Soler sue on behalf of either party. Moreover, the form does not
Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985)). constitute an enforceable agreement because it lacks
contractual consideration. It is an elemental tenet of
Notwithstanding a general policy favoring such Michigan contract law, which applies here, that past
agreements, there are circumstances under which courts will consideration cannot serve as legal consideration for a
not enforce pre-dispute mandatory arbitration agreements subsequent promise. Shirey v. Camden, 22 N.W.2d 98, 102
with regard to statutory employment discrimination claims. (Mich. 1946). Meijer did not offer McMullen any new
In Floss, we held that, “even if arbitration is generally a consideration in return for signing the form, which Meijer did
suitable forum for resolving a particular statutory claim, the not sign.
specific arbitral forum provided under an arbitration
agreement must nevertheless allow for the effective Meijer’s second preliminary argument is that our decision
vindication of that claim.” Floss, 211 F.3d at 313. The in Haskins prevents us from considering whether a pre-
central issue in this case is whether Meijer’s exclusive control dispute arbitration agreement allows for the effective
over the pool of potential arbitrators renders the arbitral forum vindication of statutory claims. Meijer notes that we decided
so fundamentally unfair as to prevent McMullen from Haskins after we decided Floss. In Haskins, this court held
effectively vindicating her statutory rights, thereby precluding that “absent a showing of fraud, duress, mistake, or some
enforcement of the pre-dispute agreement to arbitrate the other ground upon which a contract may be voided, a court
statutory claims. must enforce a contractual agreement to arbitrate.” Haskins,
230 F.3d at 239. Meijer requests that we construe Haskins
Before reaching this central issue, however, we must narrowly, arguing that McMullen can only escape from her
address two preliminary arguments made by Meijer. First, agreement to arbitrate by showing “fraud, duress, or mistake.”
Meijer argues that, regardless of the viability of the pre- In other words, Meijer contends that McMullen cannot ask a
dispute agreement, McMullen should be compelled to court to “inquire into the fairness of the terms of these
arbitrate her claims because she voluntarily and knowingly arbitration contracts and to void them because one of their
agreed to arbitration after the dispute had occurred. When terms - the method of selecting the arbitrator - is allegedly
Meijer internally reviewed McMullen’s claim after her unfair to her.” The district court concurred with Meijer,
termination, it issued a “results of review” statement on a opining that “Haskins has substantially narrowed the grounds
Meijer “Termination Appeal Form.” The form states that to on which one may challenge a contractual agreement to
challenge the termination, an employee must request arbitrate.” Consequently, the district court granted Meijer’s
arbitration. Part 3 of the form states, “I request that my case motion for reconsideration.
be submitted to arbitration in accordance with the Company’s
Termination Appeal Procedure.” Beneath this statement, the The district court’s ruling, however, overstates the impact
form is signed solely by Wendy McMullen. of Haskins on the agreement signed by McMullen. In
Haskins, the plaintiff signed an agreement with a securities
No. 01-1211 McMullen v. Meijer, Inc. 9 10 McMullen v. Meijer, Inc. No. 01-1211
dealers’ association binding him to arbitrate any disputes For example, in Cooper, the court extensively discussed
arising with his employer. The plaintiff’s challenge to the Haskins in the course of assessing the validity of a pre-dispute
agreement focused on his ignorance as to the existence of the agreement to arbitrate signed by a restaurant employee. In so
mandatory arbitration agreement, rather than on any perceived doing, the court essentially divided the Haskins analysis into
unfairness in the arbitration process. Haskins, 230 F.3d at two separate stages. First, it undertook the Haskins
239-40. The Haskins court adopted a contracts-law approach contractual analysis that Meijer promotes in the instant appeal
to determining the validity of the agreement, holding that, as the only means for invalidating such an agreement.
despite plaintiff’s ignorance, the agreement was enforceable Secondly, contrary to the position Meijer espouses, the court
absent fraud, mistake, duress, or another contractual ground held that:
for challenge.
Even if this Court found no contractual defenses to the
In arguing that McMullen can only escape arbitration by enforcement of the [arbitration agreement], Plaintiff’s
showing fraud, mistake, or duress, Meijer ignores the substantive rights are affected by the agreement. Courts
remaining portion of the holding in Haskins, where this court have recognized that, although arbitration agreements are
made an allowance for “some other ground upon which a generally favored, they will not be enforced if they affect
contract may be voided.” Haskins, 230 F.3d at 239. This an individual’s substantive rights. Gilmer, 500 U.S. at
language sufficiently encompasses the “effective vindication” 28, 111 S. Ct. 1647. Where an individual is unable to
analysis prescribed by the United States Supreme Court and vindicate his or her rights because of an obstacle erected
endorsed by this circuit in Floss.5 Indeed, subsequent cases by an arbitration agreement, the court may not enforce
have arrived at this precise conclusion, construing the Floss that arbitration agreement.
“effective vindication” analysis as another ground on which
a mandatory arbitration agreement can be voided. See Cooper, 199 F. Supp. 2d at 780-81.
Cooper v. MRM Inv. Co., 199 F. Supp. 2d 771, 775 (M.D.
Tenn. 2002); French v. First Union Sec., Inc., 209 F. Supp. Furthermore, even if Meijer’s interpretation of Haskins
2d 818, 826 (M.D. Tenn. 2002); Rembert v. Ryan’s were correct, Haskins has been superseded by our en banc
Steakhouse, 596 N.W.2d 208, 218 (Mich. Ct. App. 1999).6 decision in Morrison v. Circuit City Stores, Inc., 317 F.3d 646
(6th Cir. 2003). As we held in Morrison, “[t]he Supreme
Court has made clear that statutory rights, such as those
created by Title VII, may be subject to mandatory arbitration
5
The “effective vindication” test referenced in Floss derives from only if the arbitral forum permits the effective vindication of
Gilm er, where the Supreme Court proclaimed, “[S]o long as the those rights.” 317 F.3d at 658. “Under Gilmer, the arbitral
prospective litigant effec tively may vindicate [his or her] statutory cause forum must provide litigants with an effective substitute for
of action in the arbitral forum, the statute will continue to serve bo th its
remedial and deterrent function.” Gilmer, 500 U.S. at 28 (quoting
the judicial forum. . . .” Id. at 659.
Mitsubishi Motors Corp., 473 U.S. at 637).
6
Although the Rem bert decision predated Haskins, it did not pred ate
Beauchamp v. Great West Life Assurance Co., 918 F. Supp. 1091 (E.D. voided, a court must enforce a contractual agreement to arbitrate,” is
Mich. 1996), the underlying case on which Haskins rested its holding. adopted from Beauchamp, 918 F. Supp. at 1098. Thus, the Rem bert
Indeed, the language in Haskins stating that “absent a showing of fraud, court’s conc lusion tha t Beauchamp permits a fairness challenge to an
duress, mistake or some other ground upon which a contract may be arbitration agreement applies with equal force to Haskins.
No. 01-1211 McMullen v. Meijer, Inc. 11 12 McMullen v. Meijer, Inc. No. 01-1211
Therefore, we must decide whether Meijer’s TAP provides The Hooters court described the selection procedure as
McMullen with an effective substitute for the judicial forum follows:
to pursue her Title VII claims. The TAP adopted by Meijer
is commendably fair except in one important respect: it The employee and Hooters each select an arbitrator, and
grants Meijer unilateral control over the pool of potential the two arbitrators in turn select a third. Good enough,
arbitrators. except that the employee’s arbitrator and the third
arbitrator must be selected from a list of arbitrators
McMullen relies heavily on Hooters of America v. Phillips, created exclusively by Hooters. This gives Hooters
173 F.3d 933 (4th Cir. 1999), to support her argument that control over the entire panel and places no limits
Meijer’s TAP is so unfair that it does not provide an effective whatsoever on whom Hooters can put on the list. Under
means of vindicating her Title VII rights. In Hooters, the the rules, Hooters is free to devise lists of partial
Fourth Circuit invalidated an arbitration agreement that it arbitrators who have existing relationships, financial or
found “so one-sided that [its] only possible purpose [was] to familial, with Hooters and its management. In fact, the
undermine the neutrality of the proceeding.” Id. at 938. The rules do not even prohibit Hooters from placing its
Hooters court stated, “By promulgating [a] system of warped managers themselves on the list.
rules, Hooters so skewed the process in its favor that Phillips
has been denied arbitration in any meaningful sense of the Id. at 938-39.
word.” Id. at 941.
In addition to Hooters, McMullen cites our opinion in Floss
Many of the arbitration procedures criticized by the Fourth in support of her argument that Meijer’s TAP should not be
Circuit in Hooters were patently one-sided. For example, the enforced in this case. In Floss, this court invalidated an
arbitration agreement at issue in Hooters required employees arbitration agreement that gave a third-party arbitration
to file a notice of the particulars of their claims, as well as a service, EDSI, complete discretion over the procedures and
list of all fact witnesses along with a summary of their rules to be used during arbitration hearings. Floss, 211 F.3d
knowledge, while the company was required to do neither. at 310. Because EDSI could change those rules without
Hooters, 173 F.3d at 938-39. The company could expand the notice, and without the consent of the claimant, we held that
scope of arbitration to any matter, but the employee could the agreement to arbitrate lacked consideration and mutuality
only arbitrate matters asserted in the notice of claim. The of obligation. Id. at 315-16.
company, but not the employee, could create a record or
transcript of the proceeding. The company also retained the Our opinion in Floss also criticized, albeit in dicta, the
sole right to cancel the arbitration agreement or bring suit in fairness of EDSI’s arbitrator-selection process. Under EDSI’s
court to vacate or modify the arbitration award. Finally, the rules, three “adjudicators” were selected from three separate
company could unilaterally modify the rules at any time selection pools to preside over the arbitration hearing. The
without notice to the employee, even in the middle of an first of these pools consisted of supervisors and managers
arbitration hearing. Id. from another EDSI signatory company; the second consisted
of employees from another signatory; and the third contained
Moreover, the selection process in Hooters “[was] crafted attorneys, retired judges, and other “competent professional
to ensure a biased decisionmaker.” Hooters, 173 F.3d at 938. persons.” Id. at 313-14 n.7. As described by the Floss court:
No. 01-1211 McMullen v. Meijer, Inc. 13 14 McMullen v. Meijer, Inc. No. 01-1211
The selection process begins with EDSI furnishing both arbitration. But the arbitrator-selection process provided for
parties a list of potential adjudicators organized under Meijer’s TAP is less fair than the arbitrator-selection
according to each selection pool. Information regarding process described in Floss as “fundamentally unfair.” Id. In
each adjudicator’s recent employment history and related Floss, a third-party company had exclusive control over the
biographical information is provided to the parties along pool of potential arbitrators, while in the present case the
with this list. The parties may then move to strike any employer has exclusive control over the selection pool. The
adjudicator for cause. Following the removal of any Floss court was concerned that the company that selected the
adjudicators for cause, the parties each strike a name pool of potential arbitrators might be biased in favor of the
from the list until only one name remains from each employer, while here the company that selects the pool of
selection pool. potential arbitrators is the employer.
Id. The type of control exercised by Meijer over the potential
arbitrators is analogous to the “exclusive[] . . . control over
Although this process appears facially reasonable, we the entire panel” exercised by the employer in Hooters and
expressed our “serious reservations as to whether the arbitral rejected by the Fourth Circuit. Hooters, 173 F.3d at 939.
forum provided under the current version of the EDSI Rules Furthermore, the arbitrator-selection procedure used by
and Procedures is suitable for the resolution of statutory Meijer allows it to create the type of symbiotic relationship
claims.” Id. at 314. Specifically, we observed that “the with its arbitrators that we feared would promulgate bias in
neutrality of the forum is far from clear in light of the Floss. Floss, 211 F.3d at 314. The risk of bias inherent in
uncertain relationship between [the employer] and EDSI.” Id. Meijer’s procedure is demonstrated by the fact that Meijer
The record did not reflect whether EDSI, in contrast to the uses the same panel of five to seven arbitrators in each
AAA, was a for-profit entity, but we questioned whether an arbitration hearing in which it participates in the state of
alleged financial relationship between the employer company Michigan. We find Meijer’s exclusive control over the pool
and EDSI, compounded by the latter’s pecuniary interest in of potential arbitrators particularly problematic because
retaining its arbitration service contract, might foster bias in Meijer could easily have adopted a procedure in which an
favor of the employer client. Most significantly to the present unbiased third-party, such as the AAA or FMCS, selected the
case, we found in Floss that “[i]n light of EDSI’s role in pool of potential arbitrators.
determining the pool of potential arbitrators, any such bias
would render the arbitral forum fundamentally unfair.” Id. Meijer argues that the bias which McMullen fears will
(citing Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465, 1482 manifest itself during her arbitration hearing is, at this point,
(D.C. Cir. 1997) (“At a minimum, statutory rights include merely potential bias. This is not an insignificant argument.
both a substantive protection and access to a neutral forum in The Supreme Court, when presented with an allegation of
which to enforce those protections.”)). hypothetical bias, “decline[d] to indulge the presumption that
the parties and arbitral body conducting a proceeding will be
Meijer’s TAP is plainly more even-handed than the unable or unwilling to retain competent, conscientious and
arbitration agreement at issue in Hooters, which allowed for impartial arbitrators.” Gilmer, 500 U.S. at 30 (quoting
unfettered employer control over the potential arbitral panel Mitsubishi, 473 U.S. at 634). McMullen has not asserted that
and contained a myriad of unilaterally biased clauses and the particular arbitrator selected to hear her claim is biased
rules, giving Hooters an advantage in every aspect of the
No. 01-1211 McMullen v. Meijer, Inc. 15 16 McMullen v. Meijer, Inc. No. 01-1211
against her or that his arbitration decisions in the past have The parties’ appellate briefs do not address the issue of
unreasonably favored Meijer. whether invalidation of the arbitrator-selection provision
renders the TAP unenforceable in its entirety. Meijer raised
McMullen’s complaint here, however, goes beyond an the issue in a petition for rehearing filed after this court’s
allegation of a potentially biased arbitrator because McMullen original opinion declared the entire agreement unenforceable,
cites a lack of fairness inherent in the arbitrator-selection and McMullen has responded to the petition. Meijer
process. The Supreme Court in Gilmer recognized that fair concedes that the TAP lacks a severability clause. It argues,
and impartial “arbitration rules . . . provide protections against however, that the parties’ intent governs the issue of
biased panels.” Id. Meijer’s TAP contains many of the rules severability and urges us to find that the TAP’s incorporation
acclaimed by Gilmer for their ability to guard against of the Employment Dispute Rules of the AAA evidences an
potential arbitral bias, but unlike the rules considered in intent to have an arbitrator selected in accord with the AAA’s
Gilmer, Meijer’s TAP grants one party to the arbitration rule providing for selection of an arbitrator from its list when
unilateral control over the pool of potential arbitrators. This the parties’ agreement does not include an arbitrator-selection
procedure prevents Meijer’s TAP from being an effective method. Alternatively, it urges us to direct the district court
substitute for a judicial forum because it inherently lacks to appoint an arbitrator in accord with the Federal Arbitration
neutrality. 7 Act (FAA) procedure specified in 9 U.S.C. § 5. Finally,
Meijer relies on Chattanooga Mailers’ Union, No. 92 v.
Our conclusion that Meijer’s TAP is not an effective Chattanooga News-Free Press Co., 524 F.2d 1305 (6th Cir.
substitute for a judicial forum dictates that McMullen’s Title 1975) (abrogation on other grounds recognized by
VII claims are not subject to the TAP arbitrator-selection Bacashihua v. United States Postal Serv., 859 F.2d 402, 404
provision. The question remains whether Meijer’s TAP is (6th Cir. 1988)), in which this court enforced an arbitration
thus unenforceable in its entirety or whether the selection provision included in a collective bargaining agreement,
procedure can be severed and replaced with an appropriate despite the agreement’s inclusion of an allegedly illegal
equitable process. closed-shop provision and the absence of a severability
clause, and determined that utilization of the arbitrator-
selection procedure of § 5 was appropriate, given the fact that
the procedure specified in the parties’ agreement was
7
Meijer also argues that Gilmer clearly establishes that the preferred unworkable at the time.
method of challenging allegations of bias is to pursue the underlying
claims through the arbitration process and then seek review only “[w]here McMullen responds that the TAP’s specific exclusion of
there was evident partiality or corruption in the arbitrators.” Gilmer, 500 AAA administration of any arbitration under the TAP negates
U.S. at 30 (quoting 9 U.S.C. § 10(b)). W hile this is true for allegations of any inference that the parties intended application of AAA’s
potential or hyp othetical bias amon g the arb itrators, it do es not apply to arbitrator selection rule. She also asserts that Chattanooga
an allegation, as is pre sent here, that the arbitrato r-selection process is
fundamentally unfair. The Hooters court and the Floss court both Mailers’ Union is factually dissimilar to this case. She cites
recognized that procedural unfairness inherent in an arbitration agreement NLRB v. Rockaway News Supply Co., 375 U.S. 71 (1953), and
may be challenged before the arb itration. When the proce ss used to select Michigan case law, which in her view set forth a rule that,
the arbitrator is fundamentally unfair, as in this case, the arbitral forum is even when a severability clause is present, the agreement is
not an effective substitute for a jud icial forum , and the re is no need to unenforceable in its entirety when the invalidated provision
present separate evidence of bias or corruption in the particular arbitrator
selected. is central to the agreement or “so interwoven with all of its
No. 01-1211 McMullen v. Meijer, Inc. 17 18 McMullen v. Meijer, Inc. No. 01-1211
terms that it must stand or fall as an entirety.” Id. at 78. The court so that it can determine in the first instance, after full
arbitrator-selection provision is so central, in her view, that its briefing and development of any necessary additional record,
invalidation requires invalidation of the entire agreement. whether the TAP can be enforced without the impermissible
arbitrator-selection provision. If the district court decides that
In determining whether the TAP should be enforced absent the remainder of the agreement can be enforced, it will also
the invalid arbitrator-selection mechanism and, if it should, have to determine how an arbitrator should be selected.
how to select an arbitrator, the parties’ intent is a primary
issue. See generally Morrison, 317 F.3d at 676-77 III.
(interpreting arbitration contract provision as manifesting
parties’ intent to sever invalid terms when construction For all of these reasons, we reverse the district court’s grant
unclear under state law, given Supreme Court precedent of summary judgment to Meijer and the district court’s denial
requiring resolution of doubt in favor of arbitration); Great of summary judgment to McMullen. We remand the case to
Earth Cos. v. Simons, 288 F.3d 878, 890-91 (6th Cir. 2002) the district court for further proceedings consistent with this
(finding clause requiring arbitration in New York severable opinion.
from remainder of arbitration agreement based on parties’
intent); Chattanooga Mailers’ Union, 524 F.2d at 1315
(requiring arbitration consistent with parties’ intent although
arbitration procedure they selected was unworkable); Brucker
v. McKinlay Transp., Inc., 557 N.W.2d 536, 541 (Mich. 1997)
(refusing to invalidate entire arbitration agreement containing
invalid provision when parties stipulated to arbitration rules);
Samuel D. Begola Servs., Inc. v. Wild Bros., 534 N.W.2d 217,
220 (Mich. Ct. App. 1995) (noting that in determining
severability “the primary consideration is the intention of the
parties” and finding attorney fee provision severable from
rescinded purchase agreements). Yet, in this context, intent
is not the only consideration. Federal policy favoring
arbitration may figure into the analysis, see Morrison, 317
F.3d at 675, 679-80, as may the interplay between state law
and that federal policy, see id. In addition, as Morrison
indicates, reliance on Chattanooga Mailers’ Union is still
appropriate in cases concerning the severability of arbitration
contract provisions. 317 F.3d at 678 n.22.
Here, the parties did not raise any factual issues involving
their intent before the district court and, indeed, did not
address the legal issues surrounding severability at any time
until Meijer’s petition for rehearing was filed. Under these
circumstances, we find it appropriate to remand to the district