2004 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit

6-18-2004 

# P alck o v . Airb or ne E x

pr es s

P r e c e de n t i al or N on-P r e c e de n t i al : P r e c e de n t i al

D ocke t N o . 03-2227

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" P alcko v . Air bor ne E xpr e s s " (2004). 2004 D e cisio n s
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w . v i l l a no va . e du/thir dc ir c uit_2004/546PRECE DENTI AL

UNIT ED STA TES C OURT OF AP PEA LS F OR TH E TH IRD CIR CU IT

No. 03-2227

MARGARET P ALCKO

v.

AI RB OR NE EX PR ES S, IN C.,

Appellant

On Appeal from the United St ates

District Cou rt for the Easte rn D istrict of P enns ylvania (D.C. No. 02-cv- 02990) Distric t Judg e: Ho n. Th om as N . O’N eill,

Jr.

Argued January12, 2004
Before: SLOVITER, REN DELL , and AL DI SE RT , Circu it Judges
(Fil ed: June 18, 2004)

Sha ron M . Erw in (Argued) Law Offi ces of Sharon M. Erwi n, LL C Philadelphia, PA 19129
Attorneyfor Appellant Da vid L . DaC osta (Argued) Joseph J. McA lee Sprague & Sprague Philadelphia, PA 19103
Attorney s for Appell ee

OPINI ON OF THE COURT

SL OV ITE R, Circuit

Judge

. The princi pal que sti ons before us
on this appeal ar e the scope of the exclusi on from the Federal Arbitr ation Act (“FA A”), 9 U.S.C. §§ 1-16 ( 20 04) , for a

“ clas s of workers engaged i n foreign or interstate c omm erce” and t he preempti ve effect, if any , of thestat utoryexclusi on. I.
Defendan t Airborne Expres s, I nc. (“Airborne”) appeals f rom the Dist

rict Cou rt’s order dated April 23, 2003 denyi ng Airborne’s m o tion to compel arbit rat i on of plaintiff M argaret Palck o’s cl ai ms und er Title V II of th e Civ il Righ ts Act of 1964 (“Title VII”) , 42 U.S .C. § 2000e (200 4), and the P enns ylvania Human Relati ons Act, 43 P a . Con s. Stat. Ann. §§ 9 51-9 63 (2004). Airborne conten ds t hat P alcko is requ ired to arbit rat e her claims pursuant to a contrac tual arbit

rati on agreement bas ed on the FAA an d Wa shingt on sta te law . Its appeal challenges the Distri ct Cou rt’s ruli ngs that Pal cko, as a tr ansport ation worker enga ged in inter state commerce, is excluded from the FA A’s co vera g e, and that this FA A e xem ption p reem pts enforcement of Palcko’s ar bitr ation2

a greement with Airbor ne un de r Was hi ngton s tate la w.

II.
Airbor n e is a pac kag e trans portation and d eli very company that engages in intra st ate, inter state, and int ernatio nal shippi ng. It began employ ing Palcko as a F ield Se rvices Sup erviso r in Philad elphia in 1998

. Palcko’s duties includ ed supervi sing between thirt y and thirty -five driver s who delivered packages fro m Airborn e’s facility near t h e Philad elphia Intern ationa l Airp ort to the ir ultima te desti nat ion s in the P hilade lphia area, and picked up packa ges from cust o mers in the Phi ladel phia are a and b roughtthem back to Air borne’s f

aci lit y fo r shipment. Palcko monit ored an d improved the perf

ormance of the drivers under her supervisi on to ensure timel y and efficient deli very of packages.
When Palcko was hired, she agreed to enter in to a “M utual A greem ent to Arb itrate Claims” with Airborne. The relevant porti ons of the Agreement , which covers “all clai ms,” provides: Except as provi ded in th is Ag reem ent, the Fede ra l Arbitr ationAct sha ll govern t h e interp retat ion , enforcement and al l proceedi ngs pursu ant to th is Ag re eme nt. To the extent that the Federa l Arbit

rati on Act is i napp licable , Washington l aw pertai ning to agree men ts to arbitrate sh all ap pl y. App. at 19.
Ac cording to Palcko, once s h e began performing he r duti es at Air borne she encounter ed immediat e resi stance and hostility from the dr ivers under her supervi sion

. She alle ges that other Airborne employe es fals elyaccused her of
sexu al m isc on du ct, ve rb all y an d p hys icall y inti midatedher duri ng work, created a hostile work env iro nment through sexist remarks, spread offensive rumors a bou t her sex li fe and moral characte r thr ough Airb orne’s i nternal communicati on s sy st em, and g enera ll y discrimin ated againsthe r b ecause o f her gen der. Pl.’s Co mp l. at 3-7. Palcko contends t hat Airborne did not mea ning fully inve stigate and address t

hese inc idents , which she reported to the c ompany manage men t. According to Palcko, when her im med iate supervisor, M ich ae l M ate y, told he r in the presence of

others during aMarch 5, 2001 meeting that “ [m]aybe you don’ t belong in this in du str y” a nd “[ m ]a yb e you sho uld justleave, ” she lef

t the meeting and never returned to herposition at Airborn e. Pl.’s Co mp l. at 7. Airborn e denies all Palck o’s factual allegati ons of compan y wrongdoing. Def. ’s Answer at 3- 6.
Palcko file d a charge against Airborne with th e Equa l Em p loy ment Op portu n ity Commission on May 31, 2001, seeking admi nist

rati ve remedies f

or her al le gatio ns u nde r Ti tl e VI I, 42 U. S. C. § 2000e-5. After 180 day s elaps ed without
a findin g by th e Co mm ission on Pa lcko’s charge again st Air bor ne, she requested a Dismissaland Notice of Right s from the Commission. 42 U .S.C. § 200 0e-5(f)(1).3

The Commission is sued the Dis missaland Notice, thereby exhau sting Palcko ’s
a dminist rati ve remedies and allowing h e r to seek j udicia l recour se. Palcko file d a complai nt against Airborne in the District Co urt for the Eastern Distri ct of Pennsy lvania on May 20, 2002 under Title V II and the Pen nsylvan ia Human Relations Act. After the parties re solve d issue s unre lated to this appeal pertai ning to t

he servi ce of process, Ai rb orne file d a motion t o compel arbit rati on of Palcko’ s c laims under the partie s’ arbit

rati on agreement. The Distri ct Co urt den ied A irborn e’s m otio n
on April 24, 20 03, holding that Palcko’s employment contrac t is “excl uded from the coverage of the FAA because of the natu re of her work.” App. at 14, 17-18. The
co urt also found t

hat theexclusi ona r y effectof th e FAA preempts alternative
en forcementof the arbitration co ntra c t under Washington stat e law, as s uch enforcement“w ould directly con flict w ith Con gress’s expr ess pu rpose ” of e xem pti n g
a certain cla ss of workers “fr om a f ederal law otherwis e favori ng arbit rati on.” App. at 18. Airb or ne now appeals from the District Cou rt’s order.

III.
A. The Federal Arbi tration Act
1. Juris dicti on The Distri ct Court ha d subject matter jurisdiction over Pa lcko’s Title V II claim under 28 U.S.C. §§ 1331, 1343. The FAA, 9 U .S .C . § 16(a) , provi des for appe llate jurisdiction over A irborne’s appeal from the Dist rict Court’s order denyi ng its motion to compel ar bitr ation. 1 Brayman Constr. Corp. v. Home Ins. Co. , 319 F.3d 62 2, 624-25 (3d Cir. 200 3). Palcko contends, however, that because the Distri ct Cou rt found Palcko’ s employment

contrac t to be exem pt from the FA A, w e hav e no ju risdic tio n to review that c ourt’ s denial of A irborne’s motion to com pel a rbit ration unde r 9 U.S .C. § 16(a), which is a s ecti on of the FAA. Appellee’s Br. at 1.

1 9 U.S.C. § 16(a) states: (a ) An appe al maybe t ake n fr om– (1) an orde r– (A) refusi ng a stayof any acti on under section 3 of this title, (B) deny ing a petiti on und er sectio n 4 o f this title to ord er arbitra tion to proceed, (C) deny ing an appl ication und er sectio n 20 6 of this title to c ompel arbi tration, (D) confirming or deny ing confirm ation of an award or partial a ward, or (E) modify ing, c orrecting, or vacating an award; (2) an i nterl ocutoryorder granti ng, continuing, or modifyi ng an injunc tion again st an ar bitration that is subject to thi s ti tle; or (3) a f inal de cision w ith respect to an arbi tration that i s subjec t to t

his titl e.4

Palcko’s contention is without merit. We have held in Sa ndvik AB v. Advent International Corporation , 220 F.3d 99 ( 3d Ci r. 200 0), that the FA A’s provisi on fo r in ter lo cu to ry app eals of orders denyi ng motions to c ompel arbitr ationclearlyendows us wit h
a ppella te juri sdiction even i n inst anc e s when the va lidit y of the underl yi ng contrac t to arbitr at e is in do ubt, as in Palcko’s ca se with r espect to the arbit rati on agreement’ s refer ence to the FAA. See id. at 100 (s tati ng that t he FA A’s “p l ain language contemplates inte rlocutory app eal s f

ro m o rders” denyin g arbit rati on because of

ques tions re lated to the validi tyof

the underl yi ng contrac t, and that “other parts of

the st atuteevince cl ear Congressiona l inte nt that ch alleng es to refus als to compel arbi tration be prom ptly reviewe d by appellate cou rts”). Acceptance of Palcko’s argument
wo uld creat e the curious si tuati on in which eithe r all district co urts ’ orders de nyi ng arbit rati on based on section 1’s exempti on clause wo uld be be yond ap pellate re vi ew, which contradi ct s sectio n 16 (a)’s pla in language, or t he determinati on of our appe llate jurisdictio n w ould be conti ngent
on the ou tcom e of o ur rev iew o f the m erits of t he District Court ’s fi nding on the exemption ques t ion, w hich is p recisely what we are barred f

rom do ing in the absence of app el late ju ri sd ic ti on. As we stated in San dvik , “The more n a tural reading [of

Sectio n 16 (a) is] to tre at all orders decli ning to compelar bi tration as
rev iew able .” Id. at 103 . No appe llate
co ur t h as he ld to th e c on tra ry. Our juri sdiction over t he District Cou rt’s order here, therefo re, is clear.
2. Exempt ion Under Section 1 of th e FA A
Section 1 of the FAA provides:

. . . [N] othing herein contai ned shall ap ply to contra cts of employ ment of
seam en, railroad employees , or any o ther cl ass of
wo rkers engaged in foreign or interst ate commerce. 9 U.S.C. § 1.
In Circuit CityStores, Inc . v. Adams , 532 U .S. 105 (200 1), th e Su pr eme Cou rt cons idered the sco pe of th i s
e xemption from the FAA. The employ e r in that c ase, C irc ui t C ity, sought t o compel arbit rat ion as provi ded for in its emp loymen t contra cts. Th e N inth Circu it held that arb itration w as no t appro priate because section 1 of the F AA exem pts fr om its c overage al l employ men t
c ontracts. The S uprem e Cou rt revers ed , rejectin g the Ninth Ci rcuit ’s expansi ve reading of secti on 1. The Court noted t hat “[m]ost Courts of Appeals conclude the exclus ion provisi on is l imit ed t o trans portation worker s, de fine d, f o r inst ance, as those w orke rs ‘actu ally
en g aged in the m ovem ent of goo ds in inte rs tate commerce.’” Id. at 112 (ci ting Co le v. Burns Int’l Securit y Servs. , 105 F.3d 146 5, 147 1 ( D.C. Ci r . 1997)). Looking to the sta tuto ry language, the Court appli ed the interpre tation m axim of ejusdem gene ris and rea d th e words “any5

otherclass of work ers e nga ged in . . . commerce,” as giving “eff ect to th e t er ms ‘seamen’ and ‘ rail ro ad em ployees.’” Circu it City , 532 U .S. at 115. The Cou rt held that t

he res idual phr ase “anyother class of wor kers e ngag ed . . . in inte rstate commerce” should “be cont roll ed and defined by r eference to the enum era ted categories of workers whi ch are rec ited justbefore i t . . . .” Id. at 115. Reading secti on 1 in thi s narrow manner, the Cou rt noted, also concur s with Congress ’s intent in enacti ng the FAA to co mpe l enforcementof arb itration a greem ents in response to then-p revale nt judic ia l hostilit y toward such agree men ts , e special lygiven t h e fact t hat more spec ific an d
c omprehensive fede ral arbitra tio n procedures for seamen and r ailroad employe es were alrea dy in exis tence or on t he ver ge o f pa ssag e. See id. at 121 (“ I t
wo uld be rational for Congress to e nsure that workers in ge neral would becovered by the prov isi on s of th e FA A, w hile
reser ving for itself m ore speci fi c legis lati on for t hose engaged i n transportation.”) (citation om itted).
To determ ine wh ether Palcko ’s employment

co ntract, includ ing th e arbit rati on agreement, is exempt f r om the FA A’s cove rage, w e mu st t her efore de termine wh eth er Palcko c an b e considered to be a “transportation w orker” in a “clas s of wo rke rs . . . en gag ed in

. . . commerce” wit hi n the meaning of t he FAA, as in ter pr ete d b y Circu it City . The Distri ct Cou rt, citing ou r decis ion in Tenney Engineeri ng, Inc. v. Unite d Electrical Rad io & Machine Workers of America , 207 F .2d 450, 45 2 (3d C ir. 19 53 ), reasoned that Palcko qualifies as a trans portation worker because her job “was so clo sely related [to the transport of t he goods] as to be in prac tica l effect pa r t of [the shippi ng of the goods] .” App. at 17 (internal qu otati ons omitted). Air borne chall enges the court ’s fi nding, arguing t hat Palcko, as a “management employ ee” with
no close conta ct with chan nels o f intersta te
commerce and notsubject to other existing statutory emp lo yment di spute r esolution
sc heme s, cannot qual ifyas an exempt
wo rkerund erse ctio n 1 o f the FAA. Appellant ’s Br. at 27-36. Fifty years ago, this court in Tenney
was required to const

rue the meani ng of th e ex cepti on clause i n the cont ext of a la bor dispute. The union sought a st a y pending arbit

rati on which was prov ided in t he col le ct ive bar gai nin g agreemen t. Th e parti es sti pulate d that t he employ e r was eng aged in the manufac ture of goods for sale in in te rstate commerce and t hat the employ ees we re eng aged in th a t manufactur e and inci dent al pla n t main ten ance. Pre sa gi ng the S upr eme Cou rt’s holding i n Circu it City , we h eld that the e xcep t i on wa s i napp l i cabl e. We stated that a s the language “any other class of workers engaged i n foreign or inters tate commerce” followed seamen and railroad
wo rke rs, the rul e of ejusdem gene ris demands that t he p hrase includ es “o nly those other cl asses of worke rs wh o are like wi se engaged dir ectl y i n commerce, that is, only those other classes of w orkers who are actual ly engaged in the movement of interstate or fo reign c om merc e or in6

work so clos e ly related the reto as to be in pr act ical effect par

t of it .” Tenney , 207 F.2d at 452. The Supreme Court’s l at e r decisi on in Circu it City essen tially affirmedthe Tenney anal ys is. 532 U.S. at 119. Adopting the narrow interpretation of sect ion 1 stated in Tenney and Circu it City , Airborne argues t

hat Palc ko’s work,
as a sup erviso r, was not o nly dissi milarto that of seamen or railr oad worker s, but al so did n ot direc tly involve the inte rstate delivery of p ack age s. Sh e there fore cannot be a “transportati on worker” in the sense
en visi oned by the Court in Circu it Cit y
. We do n ot a gree. Ac cording to P alcko’s affid avit, she was resp onsibl e fo r “mon itor ing and impr ovin g th e per formance of drivers un der m y
su pervis ion to in su re [s ic] tim ely a n d effici ent delive ry of packages. ” App. at 6 7. Such direct

supervi sion of packa g e shipm ents make s Palcko’s w ork “so closely related [to inters ta te and for eign commerce] as to be in prac tical effect part of it. ” Tenney , 207 F.2d at 452 ; see gene rally Grea t W. Mortgage Corp. v. Peacock , 110 F .3d 222, 22 6-27 (3d Cir. 1997) (decla ring tha t Tenney is stil l g ood law).
Airborne sugg ests that th e exemption clause shou ld be lim ite d to those truck drivers who phy si call y move the pac kag es. I f we were to accept that limi tati on, we wo uld unn ecess arily narrow the secti on 1 exempt ion in a way ne ver i ntended by the FAA; had Congres s intend e d the res idual c lause of t he
exem p tion to cover on ly those worke rs who physi ca llytransported goods across state lines , it

would have phrasedth e FA A’s lan gu ag e a cc or di ng ly. 2 We theref ore concu r with the D istrict Court’s finding that Palcko’s employment contrac t with Airborne i s exem pt from the FA A’s coverage b ecau se she i s a tr ansport ation worker engaged in i nters tateand forei gn commerce under sect

ion 1 of that st atute

. B. The FA A’s PreemptiveEffect over Wa shin g ton State Law Governing Arbitr ation
1. Juris dicti on Airborne also ar gues that even if its arbit rati on agree men t wit h Pa lcko is exempt fr om the FAA ’s coverage, the

2 We are not pers uaded by Airborne’ s suggestion that the inc lusi on of Palcko i n the cl ass of workers exempt from the FAA’s coverage would create a “slippe ry slope” prob lem th at wo uld ultima tely lead to th e exe mp tion of all “man age ment

empl oy ees ” i n the s ame chain of command. Pal cko was a direc t supervi sor of Airborne’s dri vers that transp orted p acka ges, an d ou r decis ion is base d on ly on her p articular relation s to the chann els of interstate com merce. In this regard Palck o’s situation differs from the employ ee li tigant s in Co le , 105 F.3d at 1469, and Kro pf el de r v . S na p- On Tools Corp. , 859 F. Supp. 952 (D. Md. 1994); ne ither the railroad security guard in Co le nor th e w areho use m anag er in Kropfelderwas a tran sportation w orker, let alone engaged i n the tr ansport ation of goods int erst ate.7

agreementis non ethele ss enf orcea ble under the al ternat

ive gr o und that t

he arbitratio n a greement i s vali d under Washington st at e l aw. Before we examine the mer it

of Ai rborne’ s argument , how ever, we mu st first asc ertai n whether there is a bas is for o ur juris di ction to in qui re in to th is st at e- la w cl ai m. The Distri ct Court e xercis ed supplemental juri sdicti on ove r Palcko’s Pen nsylvan ia st at e l aw c aus e of acti on under 28 U.S.C. § 1367, and issue d a n orderdenyin g Airb orne ’s mo tion to comp e l arbit

rati on on both FAA and Washington st ate l aw grounds. Whi le we may re view Airborne’ s appeal wit h respect to th e FA A un de r 9 U. S. C. § 16(a), that secti on does not cover our review of a
non -F AA, state-law arbit rati on clai m in an otherwise nonappealabl e i nterlocutory order. Our abili tyto revi ew the Washington sta te law is sue b efore us, if
an y, must therefore reston the doctrine of pendentappell ate j urisdi ction , wh ich is discr etionary and narrow in nat ure. In E.I. Dup ont de N emou rs and Co.

v. Rhone Poulenc Fiber and Res in Intermediat es , S.A.S. , 269 F.3d 187 ( 3d Cir. 2001), we explained that “[t ]he doctri ne of pendent appel latejuri sdiction, in its broa dest fo rmu latio n, allows an appe llate court in it s discreti on to exercise juri sdiction o ver is sues that are not indep ende ntly appe alable but t h at are inter twined with is sues over whic h the appe llate court pr operlyand i ndep ende ntly exerci ses its juri sdiction.” Id. at 202-03. Rec ogn izin g that t

he Supreme Court has endorsed, but als o limi ted, the use of pendentappell ate j urisdi ctionby Court s of Appeals, w e c oncluded that “the doctri ne shou ld be used ‘sparingly ,’ andonly where there is suff icient o verla p i n the f acts relevant to both t

he appealab l e and
non appe alable issues to w arr ant plenary
rev iew .” Id. at 203 (em phasis in original). Here, both the FAA exem ption and Washington st at e l aw i ss ues ar is e fr om a singl e arbit

rati on agreementthat

provides
a lternativegrounds for t he arbit rati on of all cl ai ms aris ing from Palcko’ s
em ploy ment with Airborne. Moreove r , both Palck o’s Title V II and Pen nsylvan ia Human Rela tion s Act clai ms arisefrom the
sa me set of facts relat ed to her c onditi ons
as an Airborne empl oyee. Thus, no t only does suffici ent overl ap o f facts e xist to
warr ant pl enary rev iew, b ut th e Washington state law arbitratio n is su e is
so closel y i ntertwined with the FA A c laim that our tak ing o f pen dent a ppella t e juri sdiction over the f

ormer is nece ssary to
ensure meaningful review of the Dis tri ct Cou rt’s order in its entirety. We therefo re conclude w e may exer cise pende nt appe llate juri sdiction over t he state-law portion of the District Cou rt’s order.
2. Discussi on The Distric t C ourt ruled that the
ex emption of Palcko’s employmen t contrac t fr om th e FAA ’s coverage also preclude s e nforcement of t he arbit rati on agreementu nde r Wa sh in gt on s tate la w. The court foundthat “ [a]lt hough th e FA A contai ns no exp ress preem ptive pro vis ion
an d i ts pree mp tive ef fect is lim ited, its preempti ve effect do es encompas s8

q uesti ons of a rbitra bility.” A pp. a t 17

. I t reasoned that e nfor cem ent of th e arbit rati on agreement between Palcko and Airborne “in ac co rd an ce wit h s tate la ws favoring a rbitratio n would directlyconfli ct wi th Congress’s express pur pose,” i n drafti ng the exempti on clause i n secti on 1 of the FA A, of ex empting work ers engaged in inter st ate commerce fr om arbit rati on. App. at

18.
In considering w heth er th e in clusi on of

th e e xe mptio n c laus e wa s intende d to pree mpt state law regar ding enforcementof arbit

rati on agreements, we
m ust keep in min d that C ong ress en acte d the FAA “t o en sure j udicial enforc ement of priv ately m ade agr eem ents to ar bitra te,” rather than res tri ctthe forc e of arbi tration agreements. Dean W itter Reynolds, Inc. v. Byrd , 470 U.S. 213 , 219 (1985). The Supreme Court has st ated that “pass age of the Ac t was mo tivated , first and forem ost, by a c o ngressi onal desi re to enf orce agree men ts into whichparti es had ente red, and [cou rts] mu st not o verloo k this pri nc ipal objective when constr uing the stat ute, or all ow the fortui tous i mpact of the Act on effici ent dis pute res ol utio n to overshadow the u nde rlying m otiv ation .” Id. at 220 (fo otnote om itted). In seek ing to fulfil l the FAA’s purpose, the Court ha s enforced an a gr eeme ntto arbi tr at e cl ai ms under the Securi ties Act of 19 33, even though prior

case la w stated t

hat the Securities Act’s l anguag e prohibi ts the arbit rati on of such clai ms. Rodriguez de Quijas v. Shears on/American Expres s , I nc. , 490 U.S. 477 (1989) (overrul in g Wilko v. Swan , 346 U .S. 427 (195 3)); see also Gilmer v. Inter st ate/ Johnson Lane Co rp. , 500 U.S. 20 (1991) (enforci ng arbit rati on clause i n a secur itie s regis tration applic ation to cover an Age D iscrimination in Em ployme nt A ct c laim)

. In doing so, the Supreme Cou rt has h eld that th e FA A repr esents a “li beral f ederal policy fav orin g ar bitra tion agr eem ents .” Moses H. Cone Mem ’l Hospit al v. Mer cur y Constr. Corp. , 460 U.S. 1, 24 (1 983 ). The Court has al so stated that parti es to an a rbitration agree men t, “[h]avi ng mad e the b argain to arbitr at e . .

. should be held to it unles s Co ngre ss itself has evinced an i ntenti on to preclude a
wa ive r of judic ial remedies for the statutory right s at i ssue. ” M it subishi Mo tors Corp. v. Sol er Chry sler -Ply mouth, Inc. , 473 U .S. 614, 628 (1985).
There is no l an gua ge in th e FA A that e xplic itl y pr eempts theenforcement of state arbitration statutes

. As th e Su pr eme Cou rt explai ned i n Volt Information Sciences, Inc. v. Board of Trustees of Le lan d Stan ford Junio r Un iversity , 489 U.S. 4 68 (1989), “The FAA contains no express pre-empti ve provisi on, nor does it refle ct a congress ional intent to occupy t he ent ire fiel d of arbit

rati on.” Id. at 4 7 7 (ci ting Bernhardt v. Poly graphic Co. , 350 U.S. 198 (1956), which upheld appl ication of st ate ar bitr ation l aw to an arbi tration provisi on in a contrac t not cove red by the FA A). The Vo lt Court, i n determ ining whether to enforce an arb itr at io n agreementusing a Cali fornia procedural rule that ha s no c oun terpart in th e FAA, st a ted that “ [t]here is no fede ral pol icy favoring arbit

rati on under a ce rtai n set of9

proceduralrule s ; the fe deral p olicy is simp ly to ensur e the enfor cea bi lity, accordi ng to their te rms, o f priva te agreement s to a rbit

rate. ” Id. at 476. The Cou rt then ruled t

hat theapplic ation of

the Cali forn ia proc edur al rule to sta y arbit rati on to the agreement, in accor dance wi th a cho ice-of -law prov ision co ntain e d therei n, is appr opriate beca use w hile “sta te law may none the less bepre-empte d [by the FAA] to the ex tent tha t it actually conf licts with feder al la w – thatis, to the
ex tent that i t st ands as an obst acle t o the
acc omp lish ment and e xecu tion of the fu ll purposes and objectives of C ong ress ,” the applic ationof the st ate proc edural rule, “in accordance with the te rms of the arbit rati on agree men t itself, w ould [no t] undermine the goal s and poli cies of t he FA A.” Id. at 477-78 ( internal quotations and citations om itted). Applyi ng the Supreme C o urt’s prece dent, we conclude tha t the Dis tri ct Cou rt erred i n holding t ha t Pa lcko’s exemption stat

us under sec tion 1 of t he FAA preempts t

he enf orcement of t

he arbit rati on agreemen t under Washington state law. It is telling that the arb itr at ion agreementits elf envi sioned the poss ibility that Pal c ko’s e mp loymen t contra ct wo uld be deem ed exem pt from the FA A’s coverage under sec tion 1 of the A ct. It providedfor that

continge ncy by i ncluding the following : “To the exte nt that the Federal Arbitr ation Act is i napplic abl e , Washington la w pertaini ng to agre eme nts to arb itrate sha ll app ly.” A pp. a t 19

. W e
see no re ason to relea se the p arti es fro m their ow n agr eem ent. W e stated in Mason-Dixon Lin es, I n c. v. Local Union No. 560 , 443 F.2d 807 (3d Cir. 1971 ), “In
our view, the effe ct of S ection 1 is m erely to leav e the a rbitrability of d isputes in the excluded categ o ries as if the [F edera l] Ar bitr ationAc t had nev er b een ena cted .” Id. a t 809. 3 Here, enfor cement of th e arbit rati on agreement between Palcko and Airborne under Was hi ngton s tate la w, as if the FAA “had never been enacted, ” d oes not cont rad ict any of t

he language of t

he FAA, but in c on tras t furt hers the general policy goa ls o f the FAA favoring arbit rati on. We will t here fore remand so that the Dist rict Court can t ake the act

ions necessary to enforc e the ar bitr ation ag re eme ntund erWas hi ngton s tate la w. C. WhetherAirborne Waived I ts Righ t to Arbit rati on Palcko also ar gues on app eal that Airborne has waived it s right to arbi tration

3 Although Mason-Dixon Lines involved t

he differ ent is sue of st ayi ng judici al proce edings pendi ng arbit rati on under an agre ement exclude d from
se ctio n 1 o f the FAA, th e p ri nc ip le we put fort h in that case regarding t

he exclusi onary effect of s ecti on 1 on other
arbi tr atio n i ss ue s n otre late d t o the FAA is equallyapplicable here. The case also demonstrates that

enforci ng the arbit rati on agreement under Washington state law does not c ontradi ct our fi nding above that

Palcko’s employment contrac t, of whic h the arbi tration agreement i s a part , is exempted from the FAA’s coverage.10

by failing to inclu de it in its initial motion to dismis s on the gr ound of all eged defecti ve servi ce of process under Federal Ru le o f Civil Proce dure 12 (b). Palcko’s argumentis un pers uasiv e. Ru le 12 d eals with defe nses a nd o bje cti ons by pl eading
or mo tion. T he rele van t portion s of R ule 12, for Palcko’s purposes, are as foll ows: (b) How Present ed . Every defen se, in law or fa ct, to a claim for rel ief i n any pleadi n g, whet

her a cl ai m,
cou nt er cl ai m, cr oss -c la im,
or th ir d- partycl ai m, shall be asserted in the responsive pleadi ng thereto if one i s required, except that the following defense s may at the option of t

he plea der be made by moti on: (1) l ack of juri sdiction over the s ubject mat ter, (2) l ack o f juri sdiction over the pe rson, (3) improp e r venue, ( 4) insuffi ciencyof process , (5) insuff ic iencyof servi ce of process, (6) fai lure to state a claim upon which reli ef can b e granted, (7) fai lure t o join a party

under Rule 19. A mo ti on making any of these defe nses s hall be made before pleadi ng if a f

u rther pleadi ng is perm it

te d. No defense or ob je ct ion is waived by being joined with
one or m or e other de fenses
or objections i n a responsi ve plea din g or mo tion

. . . . (g ) Consolidat ion o f Defenses in M otio n. A pa rty wh o m akes a mo ti o n under this rule m ay join with it any

ot he r motions herein providedfor and then availa ble to the p ar ty . If a party makes a motion under this rule but omits t

herefrom any de fe nse or obj ecti on then availa ble to the p arty which this rule permits to be
ra ised by mo tion, the party shall not thereafter

m ake a motion based on the defense
or obj e ction s o omitt ed, excepta motion as provided i n subdivision (h )(2) here o f
on any of th e ground s there stated. (h) Waiver or Pres er v ation of Certain Defenses. (1) A defense of lack of jur is dicti on over the pe r son, improper venue , insuffi ciencyof process , or ins uffici ency of servi ce of process is wai ved (A) if omitt ed fr om a mo tion in the ci r cumstances desc ribed in subdivi sion (g), or (B) if it is neithe r ma de by moti on
un de r this rule nor

include d in a responsi ve pleadi ng or
an amen dmen t there o f permitted by Rul e 15(a ) to be made as a matter of
course.11 (2) A d efense of failure to st ate aclai m upon which reli ef can be granted,
a defense of failure to joi n a party indis pen s able under Ru le 19, and an obj ecti on of failure to st ate a legal def ense to a c lai m m ay b e
ma de i n any ple adin g permitted or order ed und e r Ru le 7(a), or by mot ion for judgmenton the ple a d ings, or at the trial on the merits

. Fed . R. C iv. P . 12( b), (g ), (h).
Palcko contends t

hat al though motions to dismiss based on the e xist ence of an arbitration agre em ent are most
com mo nly file d und er Ru le 12(b)(1) (lack of subje ct ma tter jurisdic tio n ) or R ule 12(b)(6) (failure to s tatea clai m upon which reli ef can be grante d), t hat prac tice is inapp ropria te and th at mo tions to dismiss based on an arbit rati on agreement
are more appropri atel y br ought underRu le 12(b)(2) (lack of

personaljur isdi ction) or Ru le 12(b)(3) (imprope r v enue). 4 App ellee’s Br. at

14. Palc ko’s novel categorization of the arbit rati on agreement claim is criti ca l to her waiver argument because motions under

Rule 12(b)( 1) and (b)(6) are notwa ived u nder Ru le 12(h)(1), but mo tions u nder Ru le 12(b)(2) and (b)( 3)
are. Existi ng legalauthori ties do not support Pa lck o’ s c re ati ve th eo ry. The only support Palcko has cited is aPen nsylvan ia state cour t decisio n interp retin g Pe nns ylvania state rules of civi l procedure. Wilk v. Rav in , 46 Pa. D. & C. 4th 347 (Ct. Com. Pl. A lle gheny Co unty 1991); Ap pellan t’ s R eply B r. at 1 3. Wilk is of little releva nce to inter

pretat ion of federal proceduralrule s. Our prior de cisi ons support the tradi tionalpracti ce of treat ing
a motion to compel arbitrati on as a motion to dismis s forfailure to state a clai m upon which reli ef can be g ra nted

. See Nationwide Ins. Co. v. Patterson , 953 F.2d 44, 4 5 n.1 (3d Cir. 1991) (“Dismiss al of a declaratory judgment action because the dispu te is cov er ed by an arbit rati on provisi on is gen erally effectedund er Ru le 12(b)(6) cove ring d ismissa ls for f ailure to state a clai m upon w hich reli ef can be granted, see, e.g. , Ae tna C asua lty & S urety Co. v. Ham e en , 7 58 F . S upp . 1 049 (E .D

. Pa. 1990 ), . . . .”). Allowing a wa iver of the righ t to arbit rati on based on Ru le 12(h )(1) w ould underm ine the strong judicial po sture favoring arbit

rati on as disc ussed ab ove. Our precedent holds t hat waiver of arbitratio n r ights “is not to b e lightly inferred” by feder al courts. PaineWebber Inc. v. Faraga lli , 61 F.3d 1063, 1068 (3d Cir. 1995) (quoting Gavlik Constr . Co. v. H.F. Campbell Co. , 526 F.2d 777, 783 (3d Cir. 197 5)). W e have als o stated that “prej udice is t he touchst one fo r determ in i ng wh ether th e right to arbitrate h as been waived.” Hox worth v . Blinder, Robinson & C o., I nc. , 980 F.2d 912, 925 (3d Cir

. 199 2); see also Thysse n, Inc. v. 4 Imp rope r ven ue cla ims f all with in Rule 12(b)( 3); Pal cko incorrectl y ci ted Rule 12 (b)(4).12

Calypso Shipping Corp. , 310 F.3d 102 ( 2d Cir. 2002) (rul ing that no wai ver exists
even though defendant did no t seek arbit rati on untilmore than ei ght een months aft e r the s uit was fi led and after plaint iff file d a motion for

partial summ ary judgm ent). Although we fou nd p rejudic e in Hox wo rth becau se defendant s ha d engaged in e xtensi ve pretrial pr acti ce (incl uding fili ng a motion t o dismis s for fa i lure to st ate a cl aim) in t he more than eleven months pri or to fi ling a mo ti on to compel arb itratio n, Ho xw orth , 980 F.2dat 92 5, noth ing in th e reco rd sug gests th a t Palcko has suff ered a similar adve rse effecthere. A irborn e filed its mo tion to compel arbitratio n w ithin thirty -eight da ys of learning of the laws uit and with in roug hly twen ty-two d ays of filin g its initial motion to di sm iss for insuffi ciencyof servi ce of process. App ellant’s Reply Br. at 12 n.2. Airborne had also requested that Palcko volunt aril y agree to ar bitr ation ten da ys before fi ling i ts moti on t o c ompel arbit rati on. Appellant ’s ReplyBr. at 14. Although the le ngth of the time period i nvolved alone is not d eterm inativ e , Palcko has fail ed to show w hat adverse effects, if any , she has suffered wit hin that short period of tim e. Therefore waiver cannotbe inf erred f rom the fa cts of th is
case. IV.
For the ab ove r easo ns, w e w ill
rever se th e order of the District Cou rt denyi ng enfo rcem ent of the arbi tration agreementunder Washington s tate la w and remand for further proceedi ngs consis tent with thi s opini on.