                                                    Filed:   June 4, 2002

                    UNITED STATES COURT OF APPEALS

                        FOR THE FOURTH CIRCUIT


                              No. 01-1602
                           (CA-98-2221-JFM)



Daniel C. Murray,

                                                Plaintiff - Appellant,

          versus


United    Food    and   Commercial        Workers
International Union, etc., et al.,

                                               Defendants - Appellees.



                              O R D E R



     The court amends its opinion filed May 10, 2002, as follows:

     On page 11, second full paragraph, line 9 -- the phrase “to

injury Murray” is corrected to read “to injure Murray.”

                                          For the Court - By Direction




                                          /s/ Patricia S. Connor
                                                   Clerk
            PUBLISHED

   UNITED STATES COURT OF APPEALS

          FOR THE FOURTH CIRCUIT


DANIEL C. MURRAY,
     Plaintiff-Appellant,

     v.

UNITED FOOD AND COMMERCIAL                     No. 01-1602

WORKERS INTERNATIONAL UNION,
Local 400; DONALD CASH; CHRISTIAN
SAUTER,
      Defendants-Appellees.


Appeal from the United States District Court
for the District of Maryland, at Baltimore.
J. Frederick Motz, District Judge.

     (CA-98-2221-JFM)

 Argued: October 31, 2001

   Decided: May 10, 2002

Before WILLIAMS and TRAXLER, Circuit Judges, and

Malcolm J. HOWARD, United States District Judge for

the Eastern District of North Carolina,

  sitting by designation.

____________________________________________________________

Reversed and remanded by published opinion. Judge Traxler wrote
the majority opinion, in which Judge Williams joined. Judge Howard
wrote a dissenting and concurring opinion.

____________________________________________________________

                 COUNSEL

ARGUED: Paul Francis Evelius, WRIGHT, CONSTABLE &
SKEEN, L.L.P., Baltimore, Maryland, for Appellant. Francine Karen
Weiss, KALIJARVI, CHUZI & NEWMAN, P.C., Washington, D.C.,
for Appellees.

____________________________________________________________

                  OPINION

TRAXLER, Circuit Judge:

   Daniel C. Murray ("Murray") brought this action against his
employer, the United Food & Commercial Workers Union, Local 400
("Local 400"), and Donald Cash ("Cash"), a union managerial
employee, alleging that they discriminated against him on the basis
of his race in violation of Title VII of the Civil Rights Act of 1964,
see 42 U.S.C.A. §§ 2000e - 2000e-17 (West 1994 & Supp. 2001), and
42 U.S.C.A. § 1981 (West 1994), when they terminated him from his
employment. Murray also alleged a pendent state law claim for defa-
mation against Local 400 and its organizing director, Christian Sauter
("Sauter"), arising from alleged defamatory statements made by
Sauter after Murray was fired. The district court granted defendants'
motion to dismiss and to compel arbitration of Murray's discrimina-
tion claim, and granted defendants' motion to dismiss Murray's defa-
mation claim pursuant to Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim upon which relief could be granted. We reverse
and remand.

             I.

   Local 400 of the United Food & Commercial Workers Union is a
labor union representing approximately 40,000 members, many of
whom are employed in retail food stores. In February 1997, Murray
took a leave of absence from his position as a produce clerk at Giant
Food, Inc., and began working full-time as a union organizer for
Local 400. As a condition of his employment with Local 400, Murray
was required to sign an agreement containing the following arbitra-
tion clause:

       All Representatives are employed under the terms of the
       Bylaws of Local 400. Any claims of . . . discrimination
       which . . . ha[ve] not been properly remedied through [Local

             2
        400's internal discrimination complaint process], shall be
        determined and adjudicated through final and binding arbi-
        tration. A single arbitrator shall be chosen by the alternate
        strike method from a list of arbitrators provided by the
        [Local 400] President's office. Such arbitrator shall not
        have the authority to alter[,] change or diminish any power,
        right or authority granted to the President or Acting Presi-
        dent of Local 400 under the terms and conditions of the
        Bylaws of Local 400.

J.A. 79 (emphasis added).

   On June 29, 1998, Local 400 and Donald Cash informed Murray
that his employment with Local 400 would be terminated effective
July 11, 1998. Murray returned to his position at Giant Food and, on
July 10, 1998, instituted this action against Local 400 and Cash under
Title VII and § 1981. Murray, a 42-year-old white male, alleged that
Local 400 and Cash, who is African American, terminated "his
employment on account of his race even though he is qualified for
that employment, and . . . defendants plan to retain similarly situated
African American employees because of their race." J.A. 8. Among
other relief, Murray sought reinstatement to his position as a union
organizer and monetary damages.

   In September 1998, Murray amended his complaint to add Chris-
tian Sauter, Local 400's Organizing Director, as a defendant and
asserted a state law defamation claim against Local 400 and Sauter.
Murray alleged that Sauter defamed him after he was terminated from
his position as a union organizer with Local 400 by telling one or
more Giant Food employees that Murray "was not a good organizer."
J.A. 230.

    Defendants filed a motion to dismiss and to compel arbitration of
Murray's discrimination claim, as well as a motion to dismiss Mur-
ray's defamation claim for failure to state a claim for relief under
Maryland law. The district court granted both motions, holding that
(1) the discrimination claim was subject to the arbitration agreement
between Local 400 and Murray, and (2) Sauter's statements failed to
state an actionable defamation claim under Maryland law. The district

             3
court subsequently denied Murray's motion to reconsider, and the
parties proceeded to arbitration of Murray's discrimination claim.

   At the conclusion of arbitration, the single arbitrator ruled in favor
of Local 400 and Cash, concluding that Murray had failed to establish
a prima facie case of unlawful discrimination and, in any event, that
Local 400 had articulated legitimate nondiscriminatory reasons for
Murray's discharge. The district court then confirmed the award and
entered final judgment. Murray now appeals the district court's grant
of defendants' motion to dismiss and to compel arbitration of his dis-
crimination claim, as well as the district court's dismissal of his defa-
mation claim under Rule 12(b)(6).

            II.

   We begin with Murray's contention that the district court erred in
granting the motion to dismiss and to compel arbitration of his race
discrimination claim brought under Title VII and § 1981 against
Local 400 and Cash.

             A.

   The Federal Arbitration Act ("FAA"), 9 U.S.C.A. §§ 1-16 (West
1999) represents "a liberal federal policy favoring arbitration agree-
ments," Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460
U.S. 1, 24 (1983), in order "`to reverse the longstanding judicial hos-
tility to arbitration agreements . . . and to place arbitration agreements
upon the same footing as other contracts,'" Green Tree Fin. Corp.-
Alabama v. Randolph, 531 U.S. 79, 89 (2000) (alteration in original)
(quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 24
(1991). "Pursuant to th[is] liberal policy,`any doubts concerning the
scope of arbitral issues should be resolved in favor of arbitration,
whether the problem at hand is the construction of the contract lan-
guage itself or an allegation of waiver, delay, or a like defense to
arbitrability.'" O'Neil v. Hilton Head Hosp., 115 F.3d 272, 273-74
(4th Cir. 1997) (quoting Moses H. Cone, 460 U.S. at 24-25). When
parties have entered into a valid and enforceable agreement to arbi-
trate their disputes and the dispute at issue falls within the scope of
that agreement, the FAA requires federal courts to stay judicial pro-

             4
ceedings, see 9 U.S.C.A. § 3, and compel arbitration in accordance
with the agreement's terms, see 9 U.S.C.A. § 4.

    It is settled that the provisions of the FAA, and its policy favoring
the resolution of disputes through arbitration, apply to employment
agreements to arbitrate discrimination claims brought pursuant to fed-
eral statutes, including Title VII of the Civil Rights Act. See Circuit
City Stores, Inc. v. Adams, 532 U.S. 105, 109 (2001); Hooters of Am.,
Inc. v. Phillips, 173 F.3d 933, 937 (4th Cir. 1999). Such an agreement
is enforceable because "`[b]y agreeing to arbitrate a statutory claim,
a party does not forgo the substantive rights afforded by the statute;
it only submits to their resolution in an arbitral, rather than judicial,
forum.'" Hooters, 173 F.3d at 937 (quoting Gilmer, 500 U.S. at 26).
If "the prospective litigant effectively may vindicate his or her statu-
tory cause of action in the arbitral forum," the claim is appropriately
subjected to arbitration in lieu of litigation. Green Tree, 531 U.S. at
89 (internal quotation marks and alteration omitted).

    The strength of this well-established policy favoring the enforce-
ment of valid arbitration agreements, however, does not end our
inquiry. Rather, courts are called upon to determine whether the par-
ticular dispute at issue is one to be resolved through arbitration. In
doing so, "we engage in a limited review to ensure that the dispute
is arbitrable — i.e., that a valid agreement to arbitrate exists between
the parties and that the specific dispute falls within the substantive
scope of that agreement." Hooters, 173 F.3d at 938 (internal quotation
marks omitted). Although "highly circumscribed," the "judicial
inquiry . . . is not focused solely on an examination for contractual
formation defects such as lack of mutual assent and want of consider-
ation." Id. Rather, the FAA specifically contemplates that parties may
also seek revocation of an arbitration agreement "under `such grounds
as exist at law or in equity,' including fraud, duress, and unconsciona-
bility." Sydnor v. Conseco Fin. Servicing Corp., 252 F.3d 302, 305
(4th Cir. 2001) (quoting 9 U.S.C.A. § 2). And, of course, agreements
to arbitrate federal statutory claims, such as those pursued under Title
VII, may be revoked if the prospective litigant demonstrates that it
cannot "effectively . . . vindicate his or her statutory cause of action
in the arbitral forum." Green Tree, 531 U.S. at 89 (internal quotation
marks and alteration omitted); cf. Bradford v. Rockwell Semiconduc-
tor Sys., Inc., 238 F.3d 549, 556 (4th Cir. 2001) ("[T]he crucial

             5
inquiry . . . is whether the particular claimant has an adequate and
accessible substitute forum in which to resolve his statutory rights.
. . .").

            B.

   With these principles in mind, we turn to the question of whether
a valid and enforceable arbitration agreement existed between Murray
and Local 400 which compelled Murray to submit his race discrimi-
nation claim to arbitration. Murray asserts that the arbitration clause,
drafted by Local 400 and to which he was required to accede as a con-
dition of his employment, is not valid and enforceable because it is
structurally biased in favor of Local 400. More specifically, Murray
points to the agreement's requirement (1) that "[a] single arbitrator
shall be chosen by the alternate strike method from a list of arbitrators
provided by the President's office"; and (2) that, in any event, "[s]uch
arbitrator shall not have the authority to alter [,] change or diminish
any power, right or authority granted to the President . . . of Local 400
under the terms and conditions of the Bylaws of Local 400." J.A. 79.
Construed together, Murray claims, these clauses render the agree-
ment grossly unfair and one-sided by placing choice of the arbitrator
exclusively in the hands of Local 400 and providing that, in any
event, Local 400 can disregard the arbitration result because the arbi-
trator cannot alter the President's authority, under the Local 400
Bylaws, to "terminate the employment of any [personnel] at the end
of an assignment or in the best interest of the Local Union." J.A. 126.

   In accordance with the principles outlined above, we have previ-
ously recognized that equity may require invalidation of an arbitration
agreement that is unconscionable, see Sydnor, 252 F.3d at 305; Hoot-
ers, 173 F.3d at 938, as well as an arbitration agreement that allows
an employer to ignore the arbitration result, see Johnson v. Circuit
City Stores, 148 F.3d 373, 378 (4th Cir. 1998); O'Neil, 115 F.3d at
274-75. Indeed, in Hooters, we revoked an arbitration agreement
plagued by rules and procedures which were "so one-sided that their
only possible purpose [was] to undermine the neutrality of the pro-
ceeding." Hooters, 173 F.3d at 938. Among other unfair procedures,
the agreement in Hooters provided that Hooters and the employee
would each select an arbitrator, who would in turn select the third
arbitrator. But, the employee's arbitrator and the third arbitrator were

             6
required to be selected from a list of arbitrators created exclusively by
Hooters. No limits were placed on whom Hooters could put on the
list, giving Hooters absolute control over the selection of the entire
panel. See id. at 938-39. Such a mechanism for selecting an arbitra-
tion panel to adjudicate the employee's statutory claim, we held, was
one "crafted to ensure a biased decisionmaker." Id. at 938.

   In this case, we are presented with a quite similar method for
choosing the decisionmaker. As a condition of his employment, Mur-
ray was required to enter into an arbitration agreement drafted by his
prospective employer that placed control over the selection of the sin-
gle arbitrator for employment disputes in the hands of his employer.
The parties ostensibly engage in an alternate strike method to select
the single arbitrator from a list of prospective arbitrators, but they
exercise these alternate strikes "from a list of arbitrators provided by"
Local 400 with absolutely no specified constraints. J.A. 79. In this
respect, the selection method is virtually indistinguishable from the
one we disapproved of in Hooters:

       [The employer] is free to devise lists of partial arbitrators
       who have existing relationships, financial or familial, with
       [the employer] and its management. In fact, the rules do not
       even prohibit [the employer] from placing its managers
       themselves on the list. Further, nothing in the rules restricts
       [the employer] from punishing arbitrators who rule against
       the company by removing them from the list. Given the
       unrestricted control that [the employer] has over the panel,
       the selection of an impartial decision maker would be a sur-
       prising result.

Id. at 939. And, as in Hooters, the one-sided nature of the arbitration
agreement is not limited to the employer providing itself with the
exclusive right to select the list of potential arbitrators from which the
ultimate decisionmaker will be selected. In the unlikely event the
hand-picked arbitrator rules against Local 400, the language of the
arbitration agreement in conjunction with the Union's Bylaws, even
if not ultimately enforceable, might be construed by the employee as
prohibiting a decision that would contravene the President's right to
terminate the employee in any event.

             7
   Although an arbitration agreement will not be invalidated for fail-
ure to "replicate the judicial forum," id. at 940, we again refuse to
enforce an agreement so "utterly lacking in the rudiments of even-
handedness," id. at 935. By agreeing to arbitration in lieu of litigation,
the parties agree to "trade `the procedures and opportunity for review
of the courtroom for the simplicity, informality, and expedition of
arbitration.'" Id. at 936 (quoting Gilmer, 500 U.S. at 31). They do not
agree to forego their right to have their dispute fairly resolved by an
impartial third party. See id. at 941 (noting that, although objections
to the fairness of an arbitral proceeding in general must be submitted
to the arbitrator in the first instance, the arbitration proceeding may
be so skewed in one party's favor as to deny the other party "arbitra-
tion in any meaningful sense of the word"). In such a case, the agree-
ment is unconscionable and one under which the prospective litigant
cannot effectively vindicate the statutory cause of action. See Green
Tree, 531 U.S. at 89.

             C.

   For its part, Local 400 asserts that we should look beyond the lan-
guage of the arbitration clause, accept that arbitration under the agree-
ment was conducted before a fair and unbiased arbitrator, and trust
that had the decision gone the other way, Local 400 would not have
asserted a right to terminate Murray under the agreement's deference
to its Bylaws. We decline to do so.

   Before the district court, Local 400 asserted that it did not maintain
a list of arbitrators and that the President's office would instead have
to obtain a list of neutral arbitrators from the American Arbitration
Association's Labor Arbitration Rules or the Federal Mediation and
Conciliation Service as it does in its collective bargaining agreements
with employers. When Murray pointed out that this procedure for
selecting an arbitrator in the collective bargaining context would not
apply in individual employment cases, Local 400 then argued that it
would instead request a list of arbitrators under the American Arbitra-
tion Association's National Rules for the Resolution of Employment
Disputes, which could apply to individual employment cases. After
the district court granted Local 400's motion to compel arbitration,
such a list was obtained and a single arbitrator was selected from it
using the alternate strike method.

             8
   Based upon this construction of the arbitration agreement's selec-
tion provision, Local 400 asserts that the agreement is valid and
enforceable because it "must be construed as requiring the President
[of Local 400] to provide a neutral list of arbitrators from which the
parties can choose an arbitrator." Brief of Appellees at 17. Addition-
ally, Local 400 argues that we should not construe the agreement's
provision denying the selected arbitrator any authority to "alter[,]
change or diminish any power, right or authority granted to the Presi-
dent . . . of Local 400 under the terms and conditions of the Bylaws
of Local 400," J.A. 79, as allowing it to disregard the arbitrator's
decision because, the argument goes, a discriminatory termination
could not be construed as an action taken "in the best interest of"
Local 400, J.A. 126.

    The flaw in Local 400's argument, of course, is that there is no ref-
erence to the AAA National Rules for the Resolution of Employment
disputes, or to any other rules governing the selection of an arbitrator,
anywhere in the language of the arbitration agreement, no doubt
engendering the uncertainty and confusion in this case. Furthermore,
the agreement is not merely silent as to the selection method; the
selection method is to be by the alternate strike method from a list of
arbitrators arbitrarily selected or created by Local 400, and then pro-
vided to the employee. Local 400's argument, therefore, is little more
than a claim that because Local 400 says it will provide a list of neu-
tral arbitrators and abide by the ultimate arbitration decision, the
selection procedure is not one-sided and the agreement is not uncon-
scionable. We decline to allow Local 400 to salvage the agreement
simply because it may have provided, after much haranguing, a list
of impartial arbitrators in this case, or because it promises to act fairly
in future cases. The arbitration agreement is unenforceable as written
and Local 400 may not rewrite the arbitration clause and adhere to
unwritten standards on a case-by-case basis in order to claim that it
is an acceptable one. Cf. Perez v. Globe Airport Sec. Servs. Inc., 253
F.3d 1280, 1285-86 (11th Cir. 2001) (rejecting attempt to rewrite
unenforceable arbitration clause in order to salvage it).

   Nor is it appropriate for us to now adjudicate Local 400's claim
that the arbitration in this case was ultimately conducted in a fair
manner before an impartial arbitrator, a fact that at least appears to
remain the subject of some dispute. When the order compelling arbi-

             9
tration was entered, the parties reasonably believed that it was not
immediately appealable under this circuit's existing precedent. See,
e.g., American Cas. Co. v. L-J, Inc., 35 F.3d 133, 135 (4th Cir. 1994).
Consequently, this appeal is the first opportunity Murray has had to
challenge the order of arbitration. We now know that such an order
compelling arbitration and dismissing the underlying claims is "a final
decision with respect to an arbitration," 9 U.S.C.A. § 16(a)(3), which
is immediately appealable. See Green Tree, 531 U.S. at 89. The
Supreme Court's decision in Green Tree, however, post-dates the dis-
trict court's order compelling arbitration. Had it been otherwise, Mur-
ray would have been entitled to immediately appeal the order
compelling arbitration under the agreement and challenge the validity
of the agreement here before being forced to litigate his claims in the
arbitral forum at all. Because of the uncertainty in the law, the fact
that Murray has not been able to appeal the issue until now cannot be
held against him. In the future, this procedural uncertainty will not
exist.

   To conclude, we hold that the arbitration agreement is unenforce-
able and, therefore, that the district court erred in compelling arbitra-
tion. Although we note that the district court did not have the benefit
of our decision in Hooters or of the Supreme Court in Green Tree
when it granted Local 400's motion to compel arbitration of Murray's
discrimination claims, we are nonetheless constrained to reverse the
order compelling arbitration and remand the claims for litigation in
the judicial forum.

            III.

   We now turn to Murray's claim that the district court erred in rul-
ing that Murray failed to state an actionable defamation claim against
Sauter and Local 400 under Maryland law and, therefore, in dismiss-
ing the claim pursuant to Rule 12(b)(6). In dismissing the claim, the
district court ruled that Sauter's statement that Murray "was not a
good organizer" was not defamatory per se under Maryland law, and
that the statement was merely the expression of Sauter's opinion, as
opposed to one of fact, which could be neither verified nor refuted in
litigation.

   "Under Maryland law, a defamatory statement is one that tends to
expose a person to public scorn, hatred, contempt or ridicule, thereby

            10
discouraging others in the community from having a good opinion of,
or from associating or dealing with, that person." Samuels v. Tschech-
telin, 763 A.2d 209, 241-42 (Md. Ct. Spec. App. 2000) (internal quo-
tation marks omitted). "To establish a prima facie case of defamation
when the plaintiff is not a public figure, the plaintiff must prove: (1)
that the defendant made a defamatory communication to a third per-
son; (2) that the statement was false; (3) that the defendant was at
fault in communicating the statement; and (4) that the plaintiff suf-
fered harm." Id. at 242.

   While the tort of defamation is generally viewed as one based upon
false assertions of fact, it may also be based upon the expression of
an opinion to a third person if the "opinion contains implied assertions
of underlying objective fact." Id. at 242. Although "loose, figurative,
or hyperbolic language" expressing a mere opinion may not fairly be
viewed as being defamatory, Milkovich v. Lorain Journal Co., 497
U.S. 1, 21 (1990), "a false statement of fact cannot escape liability for
defamation under the guise of opinion." Samuels, 763 A.2d at 242
(citing Milkovich, 497 U.S. at 18). "[A] statement, even if expressed
in terms of an opinion, can be defamatory under certain circum-
stances. . . . When the underlying facts used to form the opinion are
not given along with the defamatory statement, the statement itself
may be treated as being factual and therefore potentially defamatory."
Peroutka v. Streng, 695 A.2d 1287, 1297 (Md. Ct. Spec. App. 1997).

   Subsequent to the district court's dismissal of Murray's defamation
claim in this case, the Maryland Court of Special Appeals held that
an employer's statement that an employee "had been terminated for
poor performance" was defamatory per se under its law. Samuels, 763
A.2d at 241; see id. at 245. Murray's claim of defamation has its gen-
esis in the allegation that "Sauter stated, at least twice, to one or more
Giant employees, that [Murray] was not a good organizer," and that
he did so with knowledge of the falsity of this statement and with the
intent to injure Murray. J.A. 230. Sauter, it is alleged, was the Orga-
nizing Director for Local 400 and made these statements shortly after
Murray was terminated from his employment as a full-time organizer
for Local 400. While perhaps an expression of Sauter's opinion of
Murray, it is at least arguably an opinion that might be construed as
implying Murray's failure to fulfill the duties of his position of a
union organizer. Because the alleged defamatory statement contains

            11
such "implied assertions of underlying objective fact," Samuels, 763
A.2d at 242, and in view of this recent Maryland precedent, we hold
that Murray's allegation was sufficient to survive a Rule 12(b)(6)
motion to dismiss for failure to state a claim for defamation under
Maryland law and, accordingly, reverse and remand this claim for fur-
ther proceedings as well.

            IV.

   For the foregoing reasons, we reverse the district court's decision
granting defendants' motion to dismiss Murray's Title VII claim and
compelling arbitration, reverse the district court's decision granting
defendants' motion to dismiss Murray's state law defamation claim,
and remand this matter for further proceedings.

REVERSED AND REMANDED


HOWARD, District Judge, dissenting in part and concurring in part:

   I concur with the majority's decision in Part III. However, because
I think an arbitration agreement is not rendered unconscionable
merely by its failure to state how a party will obtain a list of arbitra-
tors, I respectfully dissent from Part II of the majority's opinion.

   The issue presented in Part II is whether equitable grounds exist for
the revocation of an otherwise valid agreement to arbitrate. The
majority concludes that an arbitration agreement's silence with
respect to an employer's procedures for obtaining a list of arbitrators
renders the arbitration agreement unconscionable. The majority also
indicates that an arbitration agreement contains unconscionable terms
when an employee might construe the arbitration agreement and
bylaws as allowing the President of the Union to fire an employee
irrespective of the arbitrator's decision.

   I consider the majority's refusal to enforce the arbitration clause on
unconscionability grounds inconsistent with both Supreme Court and
Fourth Circuit precedent. See Green Tree Fin. Corp.-Alabama v. Ran-
dolph, 531 U.S. 79 (2000); Hooters of Am. v. Phillips, 173 F.3d 933
(4th Cir. 1999). First, I do not believe that an arbitration agreement's

            12
failure to specify how a party obtains a list of arbitrators is a contract
provision egregious enough to "shock the conscience." Second, Mur-
ray has failed to show an anticipatory breach by the Union in provid-
ing a list of neutral arbitrators to hear the parties' dispute. Finally, I
decline to read the arbitration agreement and bylaws as foreclosing a
decision unfavorable to the Union. Accordingly, I would affirm the
district court's decision to dismiss Murray's discrimination claim and
compel arbitration.

             I.

    Congress enacted the FAA to combat a "longstanding judicial hos-
tility to arbitration agreements . . . and to place arbitration agreements
upon the same footing as other contracts." Gilmer v. Inter-
state/Johnson Lane Corp., 500 U.S. 20, 24 (1991). In evaluating
whether an enforceable agreement to arbitrate exists, courts apply
ordinary contract principles. Sydnor v. Conseco Fin. Servicing Corp.,
252 F.3d 302, 305 (4th Cir. 2001). Moreover, federal courts should
not single out arbitration agreements for suspect status, but should
evaluate arbitration agreements under prevailing contract standards.
Id. (quoting Doctor's Assocs. v. Casarotto, 517 U.S. 681, 687
(1996)).

    In determining whether a valid agreement to arbitrate exists, the
court must first ask whether the parties agreed to submit their claims
to arbitration. Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S.
79, 90 (2000). In the instant case, the parties agree that Murray signed
a binding arbitration agreement that covered his discrimination
claims. Murray also cannot contend that Congress intended to pre-
clude the waiver of his judicial remedies for discrimination claims.
Id.; Austin v. Owens-Brockway Glass Container, 78 F.3d 875, 881
(4th Cir. 1996).

   Having established that Murray's claims of discrimination are arbi-
trable, the court then engages in a limited inquiry into the existence
of "such grounds as exist at law or in equity for the revocation of any
contract." 9 U.S.C. § 2. Seizing on the court's equitable powers, Mur-
ray argues that the arbitration agreement is unconscionable. As Mur-
ray agreed to arbitrate his discrimination claims, the burden of

            13
proving the arbitration agreement unconscionable lies with Murray,
the party seeking to avoid arbitration. Green Tree, 531 U.S. at 91-92.

             A.

   The majority holds that the arbitration agreement is unconscionable
because the arbitrator is selected from a list of arbitrators provided by
the Union. In considering an unconscionability challenge, federal
courts must remember that "[u]nconscionability is a narrow doctrine
whereby the challenged contract must be one which no reasonable
person would enter into, and the inequality must be so gross as to
shock the conscience." Sydnor, 252 F.3d at 305 (citations and internal
quotations omitted).

   While the arbitration agreement does not specify how the Union
will obtain its list of arbitrators, this omission does not make the con-
tract facially unconscionable. While the agreement's silence could be
read as allowing the Union to choose a biased arbitrator, a careful
reading of the arbitration agreement and the record does not indicate
that the Union is attempting to saddle Murray with a biased arbitrator.
Placing the responsibility of providing an arbitrator list with the
Union recognizes that the Union, as a repeat player in the arbitration
process, has better access to methods for obtaining a list of arbitrators
than Murray.1 While the Union admittedly could have drafted a more
precise arbitration agreement, the agreement's ambiguity does not
make the contract sufficiently oppressive to render it unenforceable.
Indeed, absent extraordinary circumstances, mere ambiguity of a con-
tract term is not the type of provision which can be said to "shock the
conscience." Sydnor, 252 F.3d at 305.

   In short, Murray does not argue that the arbitration agreement will
____________________________________________________________
   1
     The record indicates that the President's office does not maintain or
draft a list of arbitrators. Instead, when arbitration is demanded pursuant
to a collective bargaining agreement or a dispute by a Union employee,
the Union obtains a list of arbitrators from the American Arbitration
Association or the Federal Mediation and Conciliation Service. The arbi-
tration association then sends the President a list of randomly selected
arbitrators. (J.A. 215-16, 360-402). In disputes involving employees and
the Union, the Union pays the fees charged by the AAA. (J.A. 399-400).

            14
necessarily produce a biased arbitrator pool, but that the contract's
silence creates the risk that the pool of arbitrators will be biased.
However, the United States Supreme Court's decision in Green Tree
Financial Corporation-Alabama v. Randolph, 531 U.S. 79 (2000),
counsels that an "arbitration agreement's silence" as to arbitration
terms and procedures, standing alone, "is plainly insufficient" to make
the arbitration agreement unenforceable. See id. at 91 (concluding that
arbitration agreement silent as to payment of arbitration fees and costs
was not facially unenforceable).

   Speaking for the majority, Chief Justice Rehnquist concluded that
unsupported fears and unfounded assumptions that high arbitration
costs would prevent a party from vindicating federal rights was "too
speculative to justify the invalidation of an arbitration agreement." Id.
Randolph, the individual opposing arbitration in Green Tree, submit-
ted evidence of fees typically charged by leading arbitration associa-
tions and of fees incurred in other arbitration cases. The court rejected
this evidence as speculative, stating that Green Tree, the party
requesting arbitration, had not selected an "arbitration associate or
arbitrator to resolve" the parties' dispute and also noting the possibil-
ity that the arbitrator's fee would be waived. Id. at 91 n.6. Finding no
evidence other than the "arbitration agreement's silence" as to alloca-
tion of arbitration costs, the Court concluded that the "risk that [a
party would] be saddled with prohibitive cost [was] too speculative
to justify invalidation of an arbitration agreement." Id. at 91.

   I find this case closely analogous to Green Tree because Murray
presents a "what-if" scenario similar to the argument the Supreme
Court rejected in Green Tree. Murray attempts to show that the arbi-
tration agreement's silence as to the Union's method for selecting an
arbitrator pool creates an unacceptable risk that Murray will face a
biased arbitrator. However, rather than pointing to evidence showing
a likelihood that the Union will produce a biased arbitrator pool, Mur-
ray asks the court to base its decision on his tenuous and unsupported
assertions. The majority's decision to invalidate the arbitration agree-
ment based on a speculative risk of bias is, in my view, inconsistent
with Green Tree.

   Neither is the majority's opinion compelled by the Fourth Circuit's
decision in Hooters of America v. Phillips, 173 F.3d 933 (4th Cir.

            15
1999). Hooters represents the "limited circumstances" in which an
arbitration agreement containing a multitude of egregiously biased
rules and procedures demonstrated one party's intent to make a mock-
ery of the arbitration system. Id. at 938; Sydnor, 252 F.3d at 306. The
court in Hooters also warned that the decision should not be con-
strued as "a full-scale assault on the fairness of proceedings before the
matter is submitted to arbitration." Hooters, 173 F.3d at 941.

    Unlike the arbitration agreement in this case, the arbitration agree-
ment in Hooters required the employee to provide notice of the spe-
cific nature of the claims, the specific acts or omissions on which the
employee's claims were based, and a list of all the employee's factual
witnesses with a summary of the facts known to them. Id. In contrast,
Hooters did not have to file responsive pleadings, notice of its
defenses, or provide a list of its witnesses. Id. In fact, only Hooters
could expand the scope of arbitration to matters not raised in the
employee's claim, and only Hooters could move for summary dis-
missal prior to a hearing. Id. at 939. Hooters also exercised complete
control in determining whether to create an official record of the arbi-
tration hearing for appellate review and could even cancel the arbitra-
tion agreement with thirty days notice. Id. Moreover, once the
arbitrator made its decision, Hooters, but not the employee, could
seek vacatur or modification of the award by showing by a preponder-
ance of evidence that the arbitration panel acted outside its authority.
Id.

   The only similarity between Hooters and this case involves the
selection of the arbitrator. In Hooters the arbitration rules provided
that the parties were to choose a three-panel arbitration board from a
list of "Approved Arbitrators" compiled, maintained, and "created
exclusively by Hooters." Id. at 938-39; Hooters of Am. v. Phillips, 39
F. Supp. 2d 582, 601 (D.S.C. 1998). In this case, the arbitration agree-
ment states that the Union will provide a list of arbitrators (J.A. at 5),
but says nothing about the Union's right or intent to exercise indepen-
dent control over the arbitrator pool. Thus, the arbitration agreement
in Hooters is distinguishable from the agreement in this case.

   However, even if the arbitration agreement in Hooters had con-
tained the same language to which Murray now objects, I do not
believe Hooters would have been decided differently or would have

            16
compelled the majority's invalidation of this arbitration agreement.
Hooters is based on the cumulative effect of a number of one-sided
rules and procedures demonstrating that Hooters' "only possible pur-
pose" in establishing its arbitration rules "was to undermine the neu-
trality of the [arbitration] proceeding." Hooters, 173 F.3d at 939; see
also Sydnor, 252 F.3d at 306 (noting that unconscionability ruling in
Hooters was based on "multitude of biased and warped rules" and
provided example of limited circumstances in which unconsciona-
bility finding was appropriate). Indeed, the violations in Hooters were
so severe that the court granted the extraordinary equitable remedy of
rescinding the entire contract. Hooters, 173 F.3d at 940 (noting that
Hooters' breach was "by no means insubstantial" but involved con-
tractual performance "so egregious that the result was hardly recog-
nizable as arbitration at all"). Faced with overwhelming evidence that
Hooters never intended to provide its employees with a fair and unbi-
ased arbitration forum, the Hooters court concluded that the agree-
ment and procedures were so egregious and oppressive as to "shock
the conscience." This reading of Hooters is consistent with Green
Tree because the Hooters' employees, unlike Murray, pointed to a
plethora of one-sided and flagrantly unfair rules, thus taking their
allegations of unconscionability outside the realm of speculation, and
into the arena of a demonstrative likelihood of harm.

   Hooters also recognizes that a party with the responsibility of set-
ting arbitration rules and procedures has a contractual duty to do so
in good faith. Hooters, 173 F.3d at 938. The court in Hooters con-
cluded that the promulgation of vast numbers of unfair and biased
rules was not only unconscionable, but breached the duty of good
faith. Id. at 940. In contrast, Murray has failed to point to rules and
procedures promulgated in bad faith, or even evidence of an anticipa-
tory breach by the Union in performing its contractual duty to provide
a list of neutral arbitrators. As the Union indicated to the district
court, it ultimately obtained a list of arbitrators from an outside
source, the American Arbitration Association ("AAA").2 In invalidat-
____________________________________________________________
   2
     The Union selected the AAA to provide an arbitrator list because the
Federal Arbitration and Conciliation Service only provides arbitrators for
disputes between employers and unionized employees. (J.A. 254). The
AAA is a large, non-profit organization which was used as a model in

            17
ing the arbitration agreement, the majority presumes that the Union
will carry out its contractual obligation to provide a neutral arbitrator
in bad faith. However, in accordance with ordinary contract princi-
ples, I believe it is entirely proper to presume, prior to arbitration and
without evidence suggesting otherwise, that both parties will act in
accordance with their contractual duties of good faith and fair dealing.

    While I do not believe that Murray has shown an arbitration agree-
ment containing egregious terms even remotely close to those cited
in Hooters or bad faith by the Union, his failure to demonstrate
unconscionability or breach of contract prior to arbitration does not
leave him without recourse. If the Union skewed the arbitration pool
in its favor, Murray has the right to return to court postarbitration to
show arbitrator bias and seek vacatur of the arbitration award under
9 U.S.C. § 10, a scenario contemplated by the Court in Green Tree.
See Green Tree, 531 U.S. at 97 (Ginsberg, J., dissenting) (noting that
majority opinion did not foreclose party from challenging arbitration
costs postarbitration).3 However, postarbitration review is not the
basis of the majority's opinion.

             B.

   Finally, the majority notes in passing that the arbitration rules are
one-sided because an employee, reading the arbitration agreement and
Union's bylaws together, might believe a decision favorable to the
____________________________________________________________

striking down Hooters' arbitration agreement. See Hooters, 173 F.3d at
939-40. Murray presented little evidence supporting his accusation that
the AAA's policies and procedures yield biased arbitrators. Thus, the
majority's suggestion that Murray's arbitrator was "hand-picked" by the
Union, supra at 7, is not supported by the record.
   3
     While Murray asserts that the arbitration he ultimately received was
biased, his post-arbitration claims of actual bias were limited to his argu-
ment that the arbitration was biased because the Union paid all of the
arbitrator's fees. (J.A. 403-05). The majority's decision does not discuss
this issue as a basis for its opinion. Moreover, my reading of the claims
presented to the district court does not find support for the majority's
suggestion that Murray ultimately received an arbitrator who was actu-
ally biased. See supra at 9.

            18
employee could be ignored by the President. See supra at 7. First,
whether a document is unconscionable does not turn on an employ-
ee's subjective beliefs about the arbitration agreement. Second, while
courts have refused to enforce arbitration agreements specifically
allowing employers to ignore arbitrators' decisions, the Fourth Circuit
in O'Neil v. Hilton Head Hospital, 115 F.3d 272 (4th Cir. 1997),
refused to read such a provision into an arbitration agreement when
the employer consistently agreed that arbitration was binding on both
parties. Id. at 275. I would apply the reasoning in O'Neil with equal
force to a party's attempts to infuse an arbitration agreement with
implied limits on an arbitrator's decisionmaking and enforcement
authority. As neither the arbitration agreement nor the Union bylaws
give the President the power to ignore or circumvent the arbitrator's
decision, I would refuse to read unconscionable terms into the agree-
ment.

            II.

   For the foregoing reasons, I respectfully dissent from the majority's
decision in Part II, and would affirm the district court's opinion dis-
missing Murray's Title VII claims and compelling arbitration. I con-
cur with the majority's decision in Part III reversing the district
court's dismissal of Murray's state laws claims.

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