Filed: Jul. 25, 2003
Latest Update: Mar. 02, 2020
Summary: 5RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 McMullen v. Meijer, Inc. No. 01-1211 ELECTRONIC CITATION: 2003 FED App. 0247P (6th Cir.) File Name: 03a0247p.06 ON BRIEF: Patrick M. Kirby, Flint, Michigan, for Appellant. Jeffrey Scott Rueble, Grand Rapids, Michigan, for Appellee. UNITED STATES COURT OF APPEALS _ FOR THE SIXTH CIRCUIT _ OPINION _ WENDY MCMULLEN, X - PER CURIAM. Appellant Wendy McMullen brought this Plaintiff-Appellant, action against her former employer
Summary: 5RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 2 McMullen v. Meijer, Inc. No. 01-1211 ELECTRONIC CITATION: 2003 FED App. 0247P (6th Cir.) File Name: 03a0247p.06 ON BRIEF: Patrick M. Kirby, Flint, Michigan, for Appellant. Jeffrey Scott Rueble, Grand Rapids, Michigan, for Appellee. UNITED STATES COURT OF APPEALS _ FOR THE SIXTH CIRCUIT _ OPINION _ WENDY MCMULLEN, X - PER CURIAM. Appellant Wendy McMullen brought this Plaintiff-Appellant, action against her former employer,..
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5RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206 2 McMullen v. Meijer, Inc. No. 01-1211
ELECTRONIC CITATION: 2003 FED App. 0247P (6th Cir.)
File Name: 03a0247p.06 ON BRIEF: Patrick M. Kirby, Flint, Michigan, for
Appellant. Jeffrey Scott Rueble, Grand Rapids, Michigan, for
Appellee.
UNITED STATES COURT OF APPEALS
_________________
FOR THE SIXTH CIRCUIT
_________________ OPINION
_________________
WENDY MCMULLEN, X
- PER CURIAM. Appellant Wendy McMullen brought this
Plaintiff-Appellant, action against her former employer, Meijer Inc., seeking a
-
- No. 01-1211 declaratory judgment that her Title VII claims are not subject
v. - to the mandatory pre-dispute arbitration agreement she signed
> upon accepting employment with Meijer. Although
, McMullen acknowledges that the terms of the arbitration
MEIJER, INC., -
Defendant-Appellee. - agreement cover her statutory employment discrimination
claims, she contends that the arbitration agreement is
N unenforceable with regard to her Title VII claims because it
Appeal from the United States District Court grants Meijer exclusive control over the pool of potential
for the Eastern District of Michigan at Detroit. arbitrators from which the arbitrator is selected.
No. 99-71206—Anna Diggs Taylor, District Judge.
After initially denying Meijer’s summary judgment motion,
Argued: February 7, 2003 the district court reconsidered and granted summary judgment
in favor of Meijer in light of a perceived change in controlling
Decided and Filed: July 25, 2003 case law. McMullen appeals the grant of summary judgment
in favor of Meijer and also the denial of her summary
Before: GILMAN and GIBBONS, Circuit Judges; judgment motion. We reverse both rulings because we find
ECONOMUS, District Judge.* that Meijer’s exclusive control over the pool of potential
arbitrators prevents McMullen from effectively vindicating
_________________ her statutory rights.
COUNSEL I.
ARGUED: Patrick M. Kirby, Flint, Michigan, for Appellant. In 1989, Meijer hired McMullen as a store detective at its
Jeffrey Scott Rueble, Grand Rapids, Michigan, for Appellee. store in Flint, Michigan. McMullen faced discipline in 1998
for an incident involving her pursuit and confrontation of a
juvenile shoplifter in the store parking lot. Meijer offered
McMullen a choice between demotion with a 33% decrease
*
The Honorable Peter C. Economus, United States District Judge for in salary, or outright termination. McMullen chose
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
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 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 United States District Court for the Eastern District of
provided her with a copy of an employee handbook Michigan.
describing both the TAP and the company’s policy of
terminating employees only with “just cause.” McMullen had On December 13, 1999, Meijer brought a motion to compel
then signed a form acknowledging receipt of the handbook arbitration and for summary judgment. On March 23, 2000,
and assenting to the company’s policies and procedures. the district court denied both motions from the bench. The
court’s ruling indicated that the procedures used by Meijer to
Upon instituting termination appeal proceedings, select an arbitrator did not comport with the requisite level of
McMullen argued that her discharge had been motivated by
an intent to discriminate against her on the basis of her
gender. Meijer denied her appeal internally and informed her 2
At the time McM ullen initiated the TAP process, Meijer maintained
that, “[i]f you would like to contest the results of this further 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
fairness for such mandatory-arbitration contracts to be the arbitrability of a particular dispute are reviewed de novo.
binding. In conjunction with its decision, the court criticized Floss v. Ryan’s Family Steakhouses, Inc., 211 F.3d 306, 311
the extent of control exercised by Meijer over the arbitral (6th Cir. 2000). A district court’s denial of summary
panel. The court also stated, “I’m sorry that there were not judgment is an interlocutory order that is not ordinarily
cross motions in the case. There weren’t, so we’ll still have appealable, but when the appeal from a denial of summary
this case alive here.” judgment is presented together with an appeal from a grant of
summary judgment, we have jurisdiction to review the denial.
On September 21, 2000, McMullen moved for summary Thomas v. United States, 166 F.3d 825, 828 (6th Cir. 1999).
judgment. On October 2, 2000, Meijer moved for When a district court denies a motion for summary judgment
reconsideration of its earlier motions based on this court’s because it determines that there exists a genuine issue of
intervening decision in Haskins v. Prudential Insurance material fact, we review the denial only for an abuse of
Company of America,
230 F.3d 231 (6th Cir. 2000). The discretion. Garner v. Memphis Police Dep’t,
8 F.3d 358, 363
district court held a hearing on the motions on November 27, (6th Cir. 1993). When, however, the district court denies
2000, and subsequently denied McMullen’s motion for summary judgment based solely upon legal grounds, we
summary judgment, granted Meijer’s motion for review the denial de novo.
Id. Because the district court
reconsideration, and, upon reconsideration, granted Meijer’s denied McMullen’s summary judgment motion solely upon
motions for summary judgment and to compel arbitration.4 legal grounds, we review this denial de novo.
II. The Supreme Court has held that agreements to arbitrate
employment disputes as a condition of employment are
The district court’s decision to grant Meijer’s motion for generally enforceable under the Federal Arbitration Act, 9
summary judgment is reviewed de novo, Smith v. Ameritech, U.S.C. § 1 et seq. (FAA). Circuit City Stores, Inc. v. Adams,
129 F.3d 857, 863 (6th Cir. 1997), as is the district court’s
532 U.S. 105, 109 (2001). This court has consistently upheld
decision to grant Meijer’s motion to compel arbitration, the validity of pre-dispute mandatory arbitration agreements.
Wiepking v. Prudential-Bache Securities, Inc.,
940 F.2d 996,
Haskins, 230 F.3d at 239; Willis v. Dean Witter Reynolds,
998 (6th Cir. 1991). Similarly, the district court’s decisions Inc.,
948 F.2d 305, 310 (6th Cir. 1991). It is well settled that
regarding the existence of a valid arbitration agreement and judicial protection of pre-dispute arbitral agreements extends
to agreements to arbitrate statutory employment
discrimination claims. Gilmer v. Interstate/Johnson Lane
4
The district judge’s decisions on the motions for summary judgment Corp., 500 U.S. 20, 26 (1991);
Willis, 948 F.2d at 312.
consisted of brief oral rulings from the bench, rather than written Arbitration of statutory claims is appropriate because “[b]y
opinions. W ith regard to the propriety of issuing oral rulings on summary agreeing to arbitrate a statutory claim, a party does not forgo
judgment motions, unaccompanied by written findings, this court the substantive rights afforded by the statute; it only submits
previously has noted:
This reviewing court, and more importantly, the parties, are to their resolution in an arbitral, rather than a judicial, forum.”
much better se rved when, as is the custom in this circuit, the Gilmer, 500 U.S. at 26 (quoting Mitsubishi Motors Corp. v.
district court prepares a written opinion explaining its ruling and Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628 (1985)).
the reasoning, factual and legal, in support, especially when the
ruling disposes of the case in a final judgment. Notwithstanding a general policy favoring such
Peck v. Bridgeport Machines, Inc., 237 F.3d 61 4, 617 (6th Cir. 2001).
This observation is equally appropriate here.
agreements, there are circumstances under which courts will
No. 01-1211 McMullen v. Meijer, Inc. 7 8 McMullen v. Meijer, Inc. No. 01-1211
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
McMullen did not agree to waive any right to sue by dealers’ association binding him to arbitrate any disputes
signing this form. The form was merely an administrative arising with his employer. The plaintiff’s challenge to the
step required to initiate the arbitration process that McMullen agreement focused on his ignorance as to the existence of the
agreed to upon her hire. The form itself does not constitute an mandatory arbitration agreement, rather than on any perceived
arbitration agreement because it contains no promise not to unfairness in the arbitration process. Haskins, 230 F.3d at
sue on behalf of either party. Moreover, the form does not 239-40. The Haskins court adopted a contracts-law approach
constitute an enforceable agreement because it lacks to determining the validity of the agreement, holding that,
contractual consideration. It is an elemental tenet of despite plaintiff’s ignorance, the agreement was enforceable
Michigan contract law, which applies here, that past absent fraud, mistake, duress, or another contractual ground
consideration cannot serve as legal consideration for a for challenge.
No. 01-1211 McMullen v. Meijer, Inc. 9 10 McMullen v. Meijer, Inc. No. 01-1211
In arguing that McMullen can only escape arbitration by Secondly, contrary to the position Meijer espouses, the court
showing fraud, mistake, or duress, Meijer ignores the held that:
remaining portion of the holding in Haskins, where this court
made an allowance for “some other ground upon which a Even if this Court found no contractual defenses to the
contract may be voided.” Haskins, 230 F.3d at 239. This enforcement of the [arbitration agreement], Plaintiff’s
language sufficiently encompasses the “effective vindication” substantive rights are affected by the agreement. Courts
analysis prescribed by the United States Supreme Court and have recognized that, although arbitration agreements are
endorsed by this circuit in Floss.5 Indeed, subsequent cases generally favored, they will not be enforced if they affect
have arrived at this precise conclusion, construing the Floss an individual’s substantive rights. Gilmer, 500 U.S. at
“effective vindication” analysis as another ground on which 28,
111 S. Ct. 1647. Where an individual is unable to
a mandatory arbitration agreement can be voided. See vindicate his or her rights because of an obstacle erected
Cooper v. MRM Inv. Co.,
199 F. Supp. 2d 771, 775 (M.D. by an arbitration agreement, the court may not enforce
Tenn. 2002); French v. First Union Securities, Inc., 209 that arbitration agreement.
F.Supp.2d 818, 826 (M.D. Tenn. 2002); Rembert v. Ryan’s
Steakhouse,
596 N.W.2d 208, 218 (Mich. App. 1999).6
Cooper, 199 F. Supp. 2d at 780-81.
For example, in Cooper, the court extensively discussed Furthermore, even if Meijer’s interpretation of Haskins
Haskins in the course of assessing the validity of a pre-dispute were correct, Haskins has been superseded by our en banc
agreement to arbitrate signed by a restaurant employee. In so decision in Morrison v. Circuit City Stores, Inc.,
317 F.3d 646
doing, the court essentially divided the Haskins analysis into (6th Cir. 2003). As we held in Morrison, “[t]he Supreme
two separate stages. First, it undertook the Haskins Court has made clear that statutory rights, such as those
contractual analysis that Meijer promotes in the instant appeal created by Title VII, may be subject to mandatory arbitration
as the only means for invalidating such an agreement. only if the arbitral forum permits the effective vindication of
those rights.” 317 F.3d at 658. “Under Gilmer, the arbitral
forum must provide litigants with an effective substitute for
5 the judicial forum. . . .” Id. at 659.
The “effective vindication” test referenced in Floss derives from
Gilmer, where the Supreme Court proclaimed, “[S]o long as the Therefore, we must decide whether Meijer’s TAP provides
prospective litigant effectively may vindicate [his or her] statutory cause
of action in the arb itral forum , the statute will continue to serve bo th its McMullen with an effective substitute for the judicial forum
remedial and d eterrent function.”
Gilmer, 500 U.S. at 28 (quoting to pursue her Title VII claims. The TAP adopted by Meijer
Mitsubishi Motors
Corp., 473 U.S. at 637). is commendably fair except in one important respect: it
6
grants Meijer unilateral control over the pool of potential
Although the Rem bert decision predated Haskins, it did not predate arbitrators.
Beauchamp v. Great West Life Assurance Company, 918 F. Supp. 1091
(E.D. Mich. 19 96), the underlying case on which Haskins rested its McMullen relies heavily on Hooters of America v. Phillips,
holding. Indeed, the language in Haskins stating that “absent a showing
of fraud, duress, mistake or some other ground upon which a contract may
173 F.3d 933 (4th Cir. 1999), to support her argument that
be voided, a court must enforce a contractual agreement to arbitrate,” is Meijer’s TAP is so unfair that it does not provide an effective
adopted from
Beauchamp, 918 F. Supp. at 1098. Thus, the Rembert means of vindicating her Title VII rights. In Hooters, the
court’s conc lusion tha t Beauchamp permits a fairness challenge to an Fourth Circuit invalidated an arbitration agreement that it
arbitration agreement applies with equal force to Haskins.
No. 01-1211 McMullen v. Meijer, Inc. 11 12 McMullen v. Meijer, Inc. No. 01-1211
found “so one-sided that [its] only possible purpose [was] to rules do not even prohibit Hooters from placing its
undermine the neutrality of the proceeding.”
Id. at 938. The managers themselves on the list.
Hooters court stated, “By promulgating [a] system of warped
rules, Hooters so skewed the process in its favor that Phillips
Id. at 938-39.
has been denied arbitration in any meaningful sense of the
word.”
Id. at 941. In addition to Hooters, McMullen cites our opinion in Floss
in support of her argument that Meijer’s TAP should not be
Many of the arbitration procedures criticized by the Fourth enforced in this case. In Floss, this court invalidated an
Circuit in Hooters were patently one-sided. For example, the arbitration agreement that gave a third-party arbitration
arbitration agreement at issue in Hooters required employees service, EDSI, complete discretion over the procedures and
to file a notice of the particulars of their claims, as well as a rules to be used during arbitration hearings. Floss, 211 F.3d
list of all fact witnesses along with a summary of their at 310. Because EDSI could change those rules without
knowledge, while the company was required to do neither. notice, and without the consent of the claimant, we held that
Hooters, 173 F.3d at 938-39. The company could expand the the agreement to arbitrate lacked consideration and mutuality
scope of arbitration to any matter, but the employee could of obligation.
Id. at 315-16.
only arbitrate matters asserted in the notice of claim. The
company, but not the employee, could create a record or Our opinion in Floss also criticized, albeit in dicta, the
transcript of the proceeding. The company also retained the fairness of EDSI’s arbitrator-selection process. Under EDSI’s
sole right to cancel the arbitration agreement or bring suit in rules, three “adjudicators” were selected from three separate
court to vacate or modify the arbitration award. Finally, the selection pools to preside over the arbitration hearing. The
company could unilaterally modify the rules at any time first of these pools consisted of supervisors and managers
without notice to the employee, even in the middle of an from another EDSI signatory company; the second consisted
arbitration hearing.
Id. of employees from another signatory; and the third contained
attorneys, retired judges, and other “competent professional
Moreover, the selection process in Hooters “[was] crafted persons.” Id. at 313-14 n.7. As described by the Floss court:
to ensure a biased decisionmaker.”
Hooters, 173 F.3d at 938.
The Hooters court described the selection procedure as The selection process begins with EDSI furnishing both
follows: parties a list of potential adjudicators organized
according to each selection pool. Information regarding
The employee and Hooters each select an arbitrator, and each adjudicator’s recent employment history and related
the two arbitrators in turn select a third. Good enough, biographical information is provided to the parties along
except that the employee’s arbitrator and the third with this list. The parties may then move to strike any
arbitrator must be selected from a list of arbitrators adjudicator for cause. Following the removal of any
created exclusively by Hooters. This gives Hooters adjudicators for cause, the parties each strike a name
control over the entire panel and places no limits from the list until only one name remains from each
whatsoever on whom Hooters can put on the list. Under selection pool.
the rules, Hooters is free to devise lists of partial
arbitrators who have existing relationships, financial or Id.
familial, with Hooters and its management. In fact, the
No. 01-1211 McMullen v. Meijer, Inc. 13 14 McMullen v. Meijer, Inc. No. 01-1211
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 Security Services,
105 F.3d 1465, manifest itself during her arbitration hearing is, at this point,
1482 (D.C. Cir. 1997) (“At a minimum, statutory rights merely potential bias. This is not an insignificant argument.
include both a substantive protection and access to a neutral The Supreme Court, when presented with an allegation of
forum in 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 against her or that his arbitration decisions in the past have
arbitration. But the arbitrator-selection process provided for unreasonably favored Meijer.
under Meijer’s TAP is less fair than the arbitrator-selection
process described in Floss as “fundamentally unfair.”
Id. In McMullen’s complaint here, however, goes beyond an
Floss, a third-party company had exclusive control over the allegation of a potentially biased arbitrator because McMullen
pool of potential arbitrators, while in the present case the cites a lack of fairness inherent in the arbitrator-selection
employer has exclusive control over the selection pool. The process. The Supreme Court in Gilmer recognized that fair
Floss court was concerned that the company that selected the and impartial “arbitration rules . . . provide protections against
pool of potential arbitrators might be biased in favor of the biased panels.”
Id. Meijer’s TAP contains many of the rules
employer, while here the company that selects the pool of acclaimed by Gilmer for their ability to guard against
potential arbitrators is the employer. potential arbitral bias, but unlike the rules considered in
Gilmer, Meijer’s TAP grants one party to the arbitration
The type of control exercised by Meijer over the potential unilateral control over the pool of potential arbitrators. This
arbitrators is analogous to the “exclusive[] . . . control over procedure prevents Meijer’s TAP from being an effective
No. 01-1211 McMullen v. Meijer, Inc. 15
substitute for a judicial forum because it inherently lacks
neutrality. Therefore, we conclude that McMullen’s Title VII
claims are not subject to the mandatory pre-dispute arbitration
agreement she signed upon accepting employment with
Meijer.
Meijer also argues that Gilmer clearly establishes that the
preferred method for challenging allegations of bias is to
pursue the underlying claims through the arbitration process
and then seek review only “[w]here there was evident
partiality or corruption in the arbitrators.” Id. (quoting
9 U.S.C. § 10(b)). While this is true for allegations of
potential or hypothetical bias among the arbitrators, it does
not apply to an allegation, as is present here, that the
arbitrator-selection process is fundamentally unfair. The
Hooters court and the Floss court both recognized that
procedural unfairness inherent in an arbitration agreement
may be challenged before the arbitration. When the process
used to select the arbitrator is fundamentally unfair, as in this
case, the arbitral forum is not an effective substitute for a
judicial forum, and there is no need to present separate
evidence of bias or corruption in the particular arbitrator
selected.
III.
For all of these reasons, we reverse the district court’s grant
of summary judgment to Meijer and the district court’s denial
of summary judgment to McMullen. We remand the case to
the district court so that it may enter judgment in favor of
McMullen in accordance with this opinion.
