## F I L E D United States Court of Appeals Tenth Circuit 

### MAY 1 1998 

### PATRICK FISHER Clerk PUBLISH UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

HARRY H. McWILLIAMS, II Plaintiff-Appellant,

v. LOGICON, INC., a Delaware corporation; LOGICON TECHNICAL SERVICES, INC., a California corporation, Defendants-Appellees. No. 97-3190

Appeal from the United States District Court

for the District of Kansas (D.C. No. 95-2500-GTV)

Before SEYMOUR, BRORBY , and BRISCOE , Circuit Judges.

BRORBY , Circuit Judge.

Plaintiff Harry H. McWilliams II appeals the distri ct court’s order granting Defendants Logicon, Inc.’s and Logicon Technical Se rvices, Inc.’s motion to stay his employment discrimination lawsuit pending arbitration. We exercise1 After examining the briefs and appellate record, this panel has

determined unanimously to grant parties' requests f or a decision on the briefs without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1.9.

-2- jurisdiction pursuant to 9 U.S.C. § 16(a)(1)(D) and28 U.S.C. § 1291 and affirm. 1

Mr. McWilliams was employed by Logicon, Inc. and Lo gicon Technical Services, Inc. (collectively, “Logicon”) as a “workarea controller” from 1989 through part of 1995. Logicon designs and conducts computer simulated military exercises for the United States military.

When first hired in 1989, Mr. McWilliams executed a n acceptance of employment letter supplied by Logicon in which he a greed “any controversies, claims, and/or disputes arising out of the terminat ion of [his] employment with [Logicon], shall be settled exclusively through bin ding arbitration ... pursuant to the Federal Arbitration Act.” In 1990, Mr. McWilli ams accepted a transfer by executing a similar acceptance letter containing th e same arbitration clause. Logicon terminated Mr. McWilliams on May 9, 1995.

Mr. McWilliams filed suit against Logicon in federa l district court on December 13, 1995, alleging that during the course of his employment with2As to the merits of Mr. McWilliams’ Americans wit h Disabilities Act

claims, Logicon contends, prior to terminating his employment, it repeatedly counseled, warned and disciplined Mr. McWilliams fo r sleeping on the job and failing to report to work. According to Logicon, M r. McWilliams never advised Logicon of any health or medical condition that aff ected his performance and never requested accommodation for any disability pr ior to his termination. To the contrary, when questioned about his performance pro blems, Mr. McWilliams repeatedly denied suffering from any debilitating c ondition.

-3- Logicon, he suffered from a number of disabling con ditions for which he requested accommodation, and that Logicon discrimin atorily terminated his employment as a result of his disabling conditions in violation of the Americans with Disabilities Act, 42 U.S.C. § 12101, et. seq
.
Logicon responded to Mr. McWilliams’ complaint on J anuary 3, 1996, with a motion requesting the court dismiss the complaintfor lack of subject matter jurisdiction or, in the alternative, stay litigatio n pending arbitration pursuant to the clauses contained in the above-referenced accep tance letters. 2 The district court entered an order granting a stay pending arbi tration on July 9, 1996 and at Mr. McWilliams’ request, appointed a former state c ourt judge as arbitrator. On May 23, 1997, the district court entered judgment o n the arbitration award in favor of Logicon. This appeal followed.

We review the district court’s ruling regarding the arbitrability of Mr.-4-

McWilliams’ claims de novo. Armijo v. Prudential Ins. Co, 72 F.3d 793, 796 (10th Cir. 1995). The issues presented are straightforward: (1) whether Mr. McWillliams’ Americans with Disabilities Act claims are subject to binding arbitration in accordance with the Federal Arbitrat ion Act; and (2) if Mr. McWilliams’ claims are subject to arbitration, whet her Logicon waived its right to compel arbitration by waiting until after Mr. McWil liams filed suit to invoke the arbitration agreement.

Arbitrability Mr. McWilliams posits two reasons why his claims ag ainst Logicon are not arbitrable. He first asserts the Federal Arbitrati on Act does not apply to him because of its express exemption for “workers engag ed in foreign or interstate commerce.” 9 U.S.C. § 1. Curiously, however, he c oncludes this argument by suggesting the nature of his employment relationshi p was “something less than contractual,” and therefore “the alleged arbitratio n clause [is] not worthy of enforcement.” Second, Mr. McWilliams argues the ar bitration clause at issue is limited in scope to claims or disputes “arising outof the termination” of his employment. By characterizing his claims as arisin g “mainly from Logicon’s denial of reasonable accommodation during the cours e of his employment,” not from his termination, Mr. McWilliams attempts to in sulate his complaint from the3 The exclusionary clause at issue provides: “noth ing herein contained

shall apply to contracts of employmentof seamen, railroad employees, or any other class of workers engaged in foreign or inters tate commerce.” 9 U.S.C. § 1 (emphasis added).

-5- scope of the arbitration clause.

Mr. McWilliams cannot have his cake and eat it too -- he either had an employment contract potentially within the ambit of the Federal Arbitration Act’s “workers engaged in interstate commerce” exemption, 3 or he did not. For purposes of considering his first argument, we ther efore will assume, without deciding, the requisite employment contract existed between Mr. McWilliams and Logicon. The question then becomes whether we shou ld construe the exemption broadly to include all contracts of employment affe cting commerce, or limit its application to that class of workers, such as trans portation workers, who actually are engaged in the movement of goods in foreign or interstate commerce.

Many courts have considered this precise issue, how ever, the Tenth Circuit has not.

Of the courts that have addressed the intended scop e of the workers4United Elec., Radio & Mach. Workers of Am. v. Mil ler Metal Prod., Inc. ,

215 F.2d 221, 224 (4th Cir. 1954) (rejecting a narr ow construction of the exemption, but expressly limiting its holding to co llective bargaining agreements). Because the Fourth Circuit has not re affirmed this holding in over forty years, some question whether it is still goodlaw. See Asplundh Tree Expert v. Bates , 71 F.3d 592, 600 (6th Cir. 1995).

-6- engaged in interstate commerce exemption, all but o ne 4 have concluded the exceptions specified in 9 U.S.C. § 1 extend only to those individuals employed directly in the channels of commerce itself. See, e.g., Cole v. Burns Int’l Sec. Servs ., 105 F.3d 1465, 1470-71 (D.C. Cir. 1997); Great Western Mortgage Corp. v. Peacock, 110 F.3d 222, 227 (3d Cir.). cert. denied, 118 S. Ct. 299 (1997); Rojas v. TK Communications, Inc. 87 F.3d 745, 747-48 (5th Cir. 1996); Asplundh Tree Expert Co. , 71 F.3d at 596-601; Miller Brewing Co. v. Brewery Workers Local Union No. 9, AFL-CIO , 739 F.2d 1159, 1162 (7th Cir. 1984), cert. denied, 469 U.S. 1160 (1985); Erving v. Virginia Squires Basketball Club , 468 F.2d 1064, 1069 (2d Cir. 1972); Dickstein v. duPont , 443 F.2d 783, 785 (1st Cir. 1971); see also Paladino v. Avnet Computer Tech., Inc., 134 F.3d 1054, 1069-61 (11th Cir. 1998) (Cox, J. and Tjoflat, J. concurring). We agr ee with the majority of our sister circuits that a narrow construction of 9 U.S .C. § 1 to include only employees actually engaged in the channels of forei gn or interstate commerce comports with both the text and history of the Fede ral Arbitration Act. A narrow construction of the § 1 exclusion also furthers the modern federal policy favoring-7-

arbitration. See Armijo , 72 F.3d at 797. We therefore follow the prevaili ng trend among courts to hold that the workers engaged in interstate commerce exclusion does not encompass all employment contracts, just t hose of employees actually engaged in the channels of interstate commerce.

The products and services Logicon provides to the U nited States military undoubtedly affect interstate commerce at some leve l. Logicon and its employees cannot, however, be said to directly affect the cha nnels of commerce. Thus, applying the rule we have adopted here today, we ho ld Mr. McWilliams' claims are not insulated from the Federal Arbitration Act.

Mr. McWilliams’ argument that his claims fall outsi de the scope of the arbitration clause fares no better. The allegation s and relief requested in Mr. McWilliams’ complaint can be fairly interpreted to arise from Logicon’s termination of Mr. McWilliams’ employment. Such in terpretation obviously furthers the strong federal policy favoring arbitration. It also comports with cases from this circuit and the Supreme Court that apply the presumption in favor of arbitrability even where a party’s claims are found ed on statutory rights. See Gilmer v. Interstate/Johnson Lane Corp. , 500 U.S. 20, 26 (1991); Armijo , 72 F.3d at 797. As the district court noted, there is noth ing in the Americans with-8-

Disabilities Act that prohibits arbitration of clai ms asserted under that Act. In fact, the Act encourages arbitration of Americans w ith Disabilities disputes, where appropriate. See 42 U.S.C. § 12212. For these reasons, and because all doubts must be resolved in favor of arbitrability, Armijo , 72 F.3d at 797, we hold Mr. McWilliams’ claims fall within the scope of the arbitration clause at issue.

Waiver In light of our conclusion that Mr. McWilliams’ cla ims are indeed subject to arbitration, we must proceed to address the issu e whether Logicon waived its right to demand arbitration. The parties agree thi s court’s decision in Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc. , 39 F.3d 1482, 1489 (10th Cir. 1994), sets forth the factors relevant to a determination whether a party has waived its right to enforce an arbitration agreement. The sixfactors identified in Metzare: (1) whether the party’s actions are inconsistent wi th the right to arbitrate; (2) whether “the litigation machinery ha s been substantially invoked” and the parties “were well into preparatio n of a lawsuit” before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration en forcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a cou nterclaim without asking for a stay of the proceedings; (5) “whether important intervening steps [ e.g. , taking advantage of judicial discovery procedures not available in arbitration] had taken place”; and (6) whether the delay “affected, misled, or prejudiced” the opposing party. 39 F.3d at 1489 (quoting Peterson v. Shearson/American Express, Inc. , 849 F.2d-9-

464, 467-68 (10th Cir. 1988)). The parties disagre e over whether Logicon’s conduct satisfied the Metztest.

Mr. McWilliams argues Logicon waived its rights by failing to even mention its intent to enforce the arbitration agree ment prior to his filing a lawsuit, despite being given ample notice of and opportunity to respond to his claims. According to Mr. McWilliams, he was “forced to file this lawsuit” when Logicon chose to remain silent regarding the arbitration ag reement, and was “‘affected, misled or prejudiced’” by such conduct. This argum ent is conclusory and fails to establish a waiver of rights under Metz

.
It is beyond dispute Logicon filed its motion to di smiss or stay proceedings pending arbitration shortly after Mr. McWilliams fi led his complaint in federal district court. Accordingly, the litigation machin ery had not been substantially invoked, nor were the parties well into preparation of the lawsuit. Mr. McWilliams was not required to defend against a cou nterclaim, and Logicon had no opportunity to exploit discovery or other judici al procedures not available in arbitration. While it is possible Mr. McWilliams m ay have pursued a different strategy had he known of Logicon’s position prior t o filing his complaint, it is difficult to imagine how, as a plaintiff denying hi s claims are even arbitrable, he-10-

was in any way misled or prejudiced by Logicon’s co urse of action. Finally, Mr. McWilliams cites no authority requiring a party to invoke arbitration prior to the filing of a lawsuit. We cannot see how Logicon’s c onduct was in any way inconsistent with its right to arbitration pursuantto Mr. McWilliams’ signed acceptance letters.

For all these reasons, we AFFIRM the district court’s orders compelling arbitration and entering judgment on the arbitratio n award in favor of Logicon.