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 district court’s order granting

Defendants Logicon, Inc.’s and Logicon Technical Services, Inc.’s motion to stay

his employment discrimination lawsuit pending arbitration. We exercise
1

 After examining the briefs and appellate record, this panel has

determined unanimously to grant parties' requests for a decision on the briefs

without oral argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1.9.

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jurisdiction pursuant to 9 U.S.C. § 16(a)(1)(D) and 28 U.S.C. § 1291 and affirm.1

Mr. McWilliams was employed by Logicon, Inc. and Logicon Technical

Services, Inc. (collectively, “Logicon”) as a “work area 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 an acceptance of

employment letter supplied by Logicon in which he agreed “any controversies,

claims, and/or disputes arising out of the termination of [his] employment with

[Logicon], shall be settled exclusively through binding arbitration ... pursuant to

the Federal Arbitration Act.” In 1990, Mr. McWilliams accepted a transfer by

executing a similar acceptance letter containing the same arbitration clause. 

Logicon terminated Mr. McWilliams on May 9, 1995.

Mr. McWilliams filed suit against Logicon in federal district court on

December 13, 1995, alleging that during the course of his employment with
2

 As to the merits of Mr. McWilliams’ Americans with Disabilities Act

claims, Logicon contends, prior to terminating his employment, it repeatedly

counseled, warned and disciplined Mr. McWilliams for sleeping on the job and

failing to report to work. According to Logicon, Mr. McWilliams never advised

Logicon of any health or medical condition that affected his performance and

never requested accommodation for any disability prior to his termination. To the

contrary, when questioned about his performance problems, Mr. McWilliams

repeatedly denied suffering from any debilitating condition.

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Logicon, he suffered from a number of disabling conditions for which he

requested accommodation, and that Logicon discriminatorily 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 January 3, 1996, with

a motion requesting the court dismiss the complaint for lack of subject matter

jurisdiction or, in the alternative, stay litigation pending arbitration pursuant to

the clauses contained in the above-referenced acceptance letters.2 The district

court entered an order granting a stay pending arbitration on July 9, 1996 and at

Mr. McWilliams’ request, appointed a former state court judge as arbitrator. On

May 23, 1997, the district court entered judgment on the arbitration award in

favor of Logicon. This appeal followed. 

We review the district court’s ruling regarding the arbitrability of Mr.
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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 Arbitration Act; and (2) if Mr.

McWilliams’ claims are subject to arbitration, whether Logicon waived its right to

compel arbitration by waiting until after Mr. McWilliams filed suit to invoke the

arbitration agreement.

Arbitrability

Mr. McWilliams posits two reasons why his claims against Logicon are not

arbitrable. He first asserts the Federal Arbitration Act does not apply to him

because of its express exemption for “workers engaged in foreign or interstate

commerce.” 9 U.S.C. § 1. Curiously, however, he concludes this argument by

suggesting the nature of his employment relationship was “something less than

contractual,” and therefore “the alleged arbitration clause [is] not worthy of

enforcement.” Second, Mr. McWilliams argues the arbitration clause at issue is

limited in scope to claims or disputes “arising out of the termination” of his

employment. By characterizing his claims as arising “mainly from Logicon’s

denial of reasonable accommodation during the course of his employment,” not

from his termination, Mr. McWilliams attempts to insulate his complaint from the
3

 The exclusionary clause at issue provides: “nothing herein contained

shall apply to contracts of employment of seamen, railroad employees, or any

other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1

(emphasis added).

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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 therefore will assume, without

deciding, the requisite employment contract existed between Mr. McWilliams and

Logicon. The question then becomes whether we should construe the exemption

broadly to include all contracts of employment affecting commerce, or limit its

application to that class of workers, such as transportation workers, who actually

are engaged in the movement of goods in foreign or interstate commerce.

Many courts have considered this precise issue, however, the Tenth Circuit

has not.

Of the courts that have addressed the intended scope of the workers
4

 United Elec., Radio & Mach. Workers of Am. v. Miller Metal Prod., Inc.,

215 F.2d 221, 224 (4th Cir. 1954) (rejecting a narrow construction of the

exemption, but expressly limiting its holding to collective bargaining

agreements). Because the Fourth Circuit has not reaffirmed this holding in over

forty years, some question whether it is still good law. See Asplundh Tree Expert

v. Bates, 71 F.3d 592, 600 (6th Cir. 1995).

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engaged in interstate commerce exemption, all but one4 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 agree 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 foreign or interstate commerce

comports with both the text and history of the Federal Arbitration Act. A narrow

construction of the § 1 exclusion also furthers the modern federal policy favoring
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arbitration. See Armijo, 72 F.3d at 797. We therefore follow the prevailing trend

among courts to hold that the workers engaged in interstate commerce exclusion

does not encompass all employment contracts, just those of employees actually

engaged in the channels of interstate commerce.

The products and services Logicon provides to the United States military

undoubtedly affect interstate commerce at some level. Logicon and its employees

cannot, however, be said to directly affect the channels of commerce. Thus,

applying the rule we have adopted here today, we hold Mr. McWilliams' claims

are not insulated from the Federal Arbitration Act.

Mr. McWilliams’ argument that his claims fall outside the scope of the

arbitration clause fares no better. The allegations and relief requested in Mr.

McWilliams’ complaint can be fairly interpreted to arise from Logicon’s

termination of Mr. McWilliams’ employment. Such interpretation 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 founded 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 nothing in the Americans with
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Disabilities Act that prohibits arbitration of claims asserted under that Act. In

fact, the Act encourages arbitration of Americans with 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’ claims are indeed subject

to arbitration, we must proceed to address the issue whether Logicon waived its

right to demand arbitration. The parties agree this 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 six factors identified in Metz are:

(1) whether the party’s actions are inconsistent with the right to

arbitrate; (2) whether “the litigation machinery has been substantially

invoked” and the parties “were well into preparation of a lawsuit”

before the party notified the opposing party of an intent to arbitrate;

(3) whether a party either requested arbitration enforcement close to

the trial date or delayed for a long period before seeking a stay; (4)

whether a defendant seeking arbitration filed a counterclaim 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
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464, 467-68 (10th Cir. 1988)). The parties disagree over whether Logicon’s

conduct satisfied the Metz test.

Mr. McWilliams argues Logicon waived its rights by failing to even

mention its intent to enforce the arbitration agreement 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 agreement, and was “‘affected,

misled or prejudiced’” by such conduct. This argument is conclusory and fails to

establish a waiver of rights under Metz.

It is beyond dispute Logicon filed its motion to dismiss or stay proceedings

pending arbitration shortly after Mr. McWilliams filed his complaint in federal

district court. Accordingly, the litigation machinery had not been substantially

invoked, nor were the parties well into preparation of the lawsuit. Mr.

McWilliams was not required to defend against a counterclaim, and Logicon had

no opportunity to exploit discovery or other judicial procedures not available in

arbitration. While it is possible Mr. McWilliams may have pursued a different

strategy had he known of Logicon’s position prior to filing his complaint, it is

difficult to imagine how, as a plaintiff denying his claims are even arbitrable, he
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was in any way misled or prejudiced by Logicon’s course 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 conduct was in any way

inconsistent with its right to arbitration pursuant to Mr. McWilliams’ signed

acceptance letters.

For all these reasons, we AFFIRM the district court’s orders compelling

arbitration and entering judgment on the arbitration award in favor of Logicon.