* The Hon. John G. Heyburn, II, United States District Judge for the Western District of Kentucky, sitting by designation. NOT RECOMMENDED FOR FULL-TEXT PUBLICATION File Name: 06a0039n.06 Filed: January 13, 2006 04-2478 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT

WENDY McMULLEN, Plaintiff-Appellant,

v. MEIJER, INC., Defendant-Appellee. ) ) ) ) ) ) ) ) ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN

Before: DAUGHTREY and COLE, Circuit Judges, and HEYBURN, *District Judge.
PER CURIAM. This case is before us on appeal for the second time, following a remand to the district court to determine whet her an invalid arbitrator-selection clause was severable from the remainder of an agreement to arbitrate disputes concerning defendant Meijer’s termination of plainti ff Wendy McMullen’s employment. The district court ruled that the offending provision was severable from the remainder of the agreement. Faced then with an arbitration agreement wit hout a specified method of se lecting an arbitrator, the district court concluded that the parties should follow the se lection provisions contained in the rules of the American Arbi tration Association. The pl aintiff contests both these determinations, maintaining that our invalidat ion of the arbitrator-selection provision04-2478 McMullen v. Meijer, Inc.

- 2 - stripped the agreement of such an essential elem ent that the entire ag reement to arbitrate disputes must be held to be a nullity. For the reasons set out below, we agree with the district court that the arbitrator-selection provision of the agreemen t was indeed severable from the remainder of the agreement and that the arbitrator should be selected under the rules of the American Arbitrat ion Association. We theref ore affirm the judgment entered below.

FACTUAL AND PROCEDURAL BACKGROUND
The facts underlying this dispute were adequately set forth in our prior opinion in McMullen v. Meijer, Inc. , 355 F.3d 485 (6th Cir. 2004):
In 1989, Meijer hired McMullen as a st ore detective at its 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 in salary, or outright termination. McMullen chose termination and decided to challenge her discipline through Meijer’s termination appeal procedure (TAP). The terms of the TAP establish a two-step procedure requiring binding arbitration of all disputes arising out of termination of employment. The TAP expressly incorporates the Employm ent Dispute Resolution Rules of the American Arbitration Association (AAA). Further, the TAP specifically asserts that: This procedure is intended to be the sole and exclusive remedy and forum for all claims arising outof or relating to an eligible team member’s termination from employment. The decision and award of the ar bitrator is final and binding between the parties as to all clai ms arising out of or relating to an [sic] team member’s termination from employment which were or could have been raised at any step in this procedure04-2478 McMullen v. Meijer, Inc.

- 3 - and judgment may be enter ed on the award in any circuit court or other court of competent jurisdiction. 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 terminating employ ees only with “just cause.” McMullen had then signed a form acknowledging receipt of the handbook and assenting to the company’s policies and procedures. Upon instituting termination appeal proceedings, McMullen argued that her discharge had been motivated by an in tent to discriminate against her on the basis of her gender. Meijer denied her appeal internally and informed her that, “[i]f you would like to contest the results of this further review, you must request an arbitration hearing . . . .” Subsequently, McMullen signed and filed the necessary paperwork to begin the arbitral process. Once an arbitration hearing is reques ted, the TAP grants Meijer the right to unilaterally select a pool of atleast five potential arbitrators, each of whom must be: (1) an attorney, (2 ) unemployed by and unaffiliated with the company, (3) generally recognized as a neutral and experienced labor and employment arbitrator, and (4) listed on the rosters ofthe Federal Mediation and Conciliation Service (FMCS) or the AAA, as well as ot her arbitration rosters. Then, counsel for the company and the aggrieved employee mutually select an arbitrator from t hat pool by alternatively [sic] striking names until only one remains. On August 20, 1998, counsel for McMullen and Meijer, following this procedure, sele cted arbitrator William Daniel to hear McMullen’s appeal. Several months later, and only one day prior to the scheduled date of the arbitration hearing, McMullen fil ed this declaratory judgment action in state court challenging the fairness of t he TAP’s arbitrator-selection process. Asserting federal question jurisdiction, Meijer removed the action to the United States District Court for the Eastern District of Michigan.

Id. at 487-88.
Ultimately, the district court granted su mmary judgment to Meijer and issued an order compelling McMullen to arbi trate her dispute. The plai ntiff appealed that ruling to this court, however, and we undertook to address the c entral issue in the case at that time –04-2478 McMullen v. Meijer, Inc.

- 4 - “whether Meijer’s exclusive cont rol over the pool of potential arbitrators renders the arbitral forum so fundamentally unfair as to prevent McMullen from effectively vindicating her statutory rights, thereby prec luding enforcement of the pre- dispute agreement to arbitrate the statutory claims.” Id. at 490. In concluding “that Meijer’s TAP is not an effective substitute for a judicial foru m,” we reasoned that “McMullen’s Ti tle VII claims are [thus] not subject to the TAP arbitrator-selection provision.” Id. at 494. Nevertheless, we remanded the case to the district court to resolv e the question “whether Meijer’s TAP is thus unenforceable in its entirety orwhether the selection procedure can be severed and replaced with an appropriate equitable process.” Id.
Upon remand, the district judge determined that Meijer ’s arbitrator-selection procedure could be severed from the remai nder of the agreement and that the contract would nevertheless continue to give effect to the parties’ intentto utilize arbitration as the exclusive method of resolving disputes ar ising from an employee’s termination from employment. Indeed, according to the district court’s oral ruling, “t he intent of the parties was always to have arbitration and not judicial resolution of any dispute.” Additionally, the district judge noted that “the f ederal policy favoring arbitration has been preeminent in labor matters” for decades and that “[f]ederal policy ov erwhelming[ly] supports arbitration of any dispute concerning discharge oremployment conditions.”
Faced with an arbitration agreem ent without direction on how to select an arbitrator, the district court then turned to the rules of the American Arbi tration Association.04-2478 McMullen v. Meijer, Inc.

- 5 - Recognizing Rule 9's description of a selection process to be used “[i]f the parties have not appointed an arbitrator and have notprovided any other method of appointment,” the court instructed the parties “to choose an arbi trator through the Am erican Arbitration Association.”

DISCUSSION
The arbitration procedure at i ssue in this litigation is c ontained in Meijer’s policy and procedure manual and consists of 18 secti ons, some general and aspirational, others detailed and specific. The basic role of arbitr ation in the dispute re solution process is set out in relevant portions of SectionsA and R of the policy, as follows:
A. Purpose and Scope This procedure has been es tablished to provide an exclusive , final and binding method for the company and any eligible team member to resolve all claims, controversies, disputes or complaints arising out of or relating to the team member’s termination from employment, including any claims or complaints based on federal, state orlocal law. In the event a team member who is eligible to use this procedure has a complaint about his or her te rmination from employment, it will be resolved in accordance with this procedure

. * * * * * R. Exclusive Remedy, Effect ofArbitration and Condition Precedent This procedure is intended to be the sole and exclusive remedy and forum for all claims arising out of or relating to an eligible team member’s termination from employment

. The decision and award of the arbitrator is final and binding between the parties as to all claims arisi ng out of or relating to an [sic] team member’s terminat ion from employment which04-2478 McMullen v. Meijer, Inc.

- 6 - were or could have been raised at any step in this procedure and judgment may be enter ed on the award in any circuit court or other court of competent jurisdiction. In the event a court of compet ent jurisdiction should determine that this procedure is not th e sole and exclusive remedy and forum and/or that the decision and award of the arbitrator, if any, is not final and binding betw een the parties as to some or all of the team member’s claims, it is intended that exhaustion of this procedure be a condition precedent to the institution or maintenance of any legal, equitabl e, administrative, or other formal proceeding by an eligible team member for all claims arising out of or relating to t he team member’s termination from employment.
(Emphasis added.)
Additionally, Section H of the policy outlines the process for se lecting the person to serve as arbitrator of the employmentdispute. That section provides:
Upon receiving a notice of election to arbitrate from the team member, the company will deliver or mail a list of at l east five impartial arbitrators to the team member. The arbitrators on the list shall all be attorneys. Within fourteen (14) calendar days of the date the list was delivered or mailed, the team member or the team member’s representative must meet or confer at a mutually convenientplace and time with the company’s designated representative to choos e an arbitrator from the list. The arbitrator shall be chosen from the arbitrators on the list by alternately striking names, the team member stri king first, until only one name remains. If the arbitrator chosen cannot serve for any reason, the last arbitrator stricken on the list shall be designated to hear the case.
It is this provision of the ar bitration agreement that we prev iously found objectionable and invalidated.04-2478 McMullen v. Meijer, Inc.

- 7 - After finding that the arbitrator-selection procedure detailed in Section H of the agreement vested unwarranted control in Meij er, to the exclusion of the company’s employees or “team members,” we directed t he district court to determine whether the offending provision could be severed from the re mainder of the policy. Not surprisingly, Meijer contended below that itcan and, therefore, that t he arbitration proceedings could continue with an arbitrator c hosen by another method. McMu llen, however, insisted that the invalidated section is not se verable, that the entire arbi tration agreement is thus null and void, and that she should be allowed to pursue her claims of employment discrimination in federal court without t he necessity of resort to arbitration.
Such a dispute presents a question oflaw that we review de novo. See Morrison v. Circuit City Stores, Inc. , 317 F.3d 646, 674 (6th Cir. 2003) (en banc). In determining whether a provision of a contra ct or agreement is severable, we first examine the provisions of the applicable state law. See id.
The general contract law of Michigan, t he state of residence of both plaintiff McMullen and defendant Meijer, provides “that the failure of a distinct part of a contract does not void valid, severable provisions.” Samuel D. Begola Servs., Inc. v. Wild Bros. , 534 N.W.2d 217, 220 (Mich. Ct. App. 1995) (citing Robinson v. A.Z. Shmina & Sons Co. , 293 N.W.2d 661 (Mich. Ct. App. 1980)). In City of Lansing v. Lansing Township , 97 N.W.2d 804, 813 (Mich. 1959), the Michi gan Supreme Court stated somewhat axiomatically:04-2478 McMullen v. Meijer, Inc.

- 8 - As a general rule, a contract is ent ire when, by its terms, nature and purpose, it contemplates that each and all of its parts are interdependent and common to one another and to the consi deration, and is severable when, in its nature and purpose, it is suscept ible of division and apportionment.
“[W]hen determining whether a contra ctual provision is severable, it is clear that the primary consideration is the int ention of the parties.” Samuel D. Begola Servs. , 534 N.W.2d at 220. No precise rule can be formula ted to judge that intent, howev er. Instead, t he intention of the parties “must be discovered in each case by considering the language employed and the subject-matter of the contract.” Stevenson v. Bhds. Mut. Benefit , 19 N.W.2d 494, 497 (Mich. 1945).

Unlike Morrison , this case does not present a st raightforward scenario involving an arbitration agreement with an ex press severability clause. See Morrison , 317 F.3d at 675. Both parties to this appeal agree, however , that the absence of such a clause does not necessarily foreshadow a decisi on that the arbitrator-selecti on provision was not severable. Although “[t]he selection of an arbi trator is clearly at the heart of any arbitration agreement,” Morrison , 317 F.3d at 679, even a cursory reading ofthis particular arbitration agreement reveals the importance that t he parties placed upon an arbitral forum for the settlement of employment disputes. As quoted earlier, ar bitration was “intended to be the sole and exclusive remedy and forum for a ll claims”; to the extent thata court determines that it is not, resort to the arbitration process mustbe considered a condition precedent that must be exhausted prior to seeking judicial intervent ion. Without a doubt, therefore, the parties04-2478 McMullen v. Meijer, Inc.

- 9 - to this arbitration agreement evidenced their int ent that the arbitral process was not to be sacrificed for other dispute-resolution alternatives.
In addition to the language and structure of the agreement itself, another important consideration supports the conclusion that t he offending provision should be severed and the remainder of the agreementenforced. Thr oughout the years, courts have emphasized the importance of arbitration in the resolution of disagreements between parties in the employment setting. Indeed, “Supreme Court precedent dictates that we resolve any doubts as to arbitrability ‘in favor of arbitration.’” Id. at 675 (citing Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 24-25 (1983)). In light of this strong preference in favor of arbitrati on, as well as the parties’ expectations that an arbitral forum would be utilized to resolve employment disput es, we decline to prevent use of the chosen method of resolution simply because one, easily-remedied problem surfaces.
After determining that the arbitrator-sel ection provision of the agreement could be severed, the district judge wa s faced with the task of dete rmining an alternative means of choosing an arbitrator that w ould comport with the remainderof the agreement. Although the agreement does not s pecify an alternative method of sele cting an arbitrator, a provision in Section J commits the parties to conduct arbitration “in accordance with the applicable provisions of the Employment Dispute Reso lution Rules of the American Arbitration Association,” even though it excepts the associ ation from administering the arbitration process because of the arbitrator-selection prov ision in Section H. Because the rules of04-2478 McMullen v. Meijer, Inc.

- 10 - the American Arbitration Association were otherwise adopted for the co nduct of any Meijer arbitration, however, the distri ct court concluded that the Am erican Arbitration Association rules governing selection of an arbitrator or arbitration panel should also be followed. In addition, when, during oral argument, the plai ntiff’s attorney was given a choice – hypothetically – between utilizing the American Arbitration Asso ciation rules or having the district court appoint an arbitrat or under the Federal Arbitration Act, 9 U.S.C. § 5, counsel opted for the former over the latte r. In light of these consi derations, we see no reason to disturb the district court’s decision concerni ng the proper method of selecting an arbitrator to preside over McMullen’s employment dispute.

AFFIRMED.