PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

DIANE O'NEIL,
Plaintiff-Appellee,

v.                                                                    No. 96-2460

HILTON HEAD HOSPITAL,
Defendant-Appellant.

Appeal from the United States District Court
for the District of South Carolina, at Beaufort.
Solomon Blatt, Jr., Senior District Judge.
(CA-96-1933-9-8)

Argued: May 8, 1997

Decided: June 13, 1997

Before WILKINSON, Chief Judge, and RUSSELL and
MICHAEL, Circuit Judges.

_________________________________________________________________

Reversed and remanded by published opinion. Chief Judge Wilkinson
wrote the opinion, in which Judge Russell and Judge Michael joined.

_________________________________________________________________

COUNSEL

ARGUED: Brian S. McCoy, ROBINSON, BRADSHAW & HIN-
SON, P.A., Rock Hill, South Carolina, for Appellant. Samuel Stanton
Svalina, SVALINA, RICHARDSON & LARSON, Beaufort, South
Carolina, for Appellee. ON BRIEF: Benjamin A. Johnson, Sarah B.
Boucher, ROBINSON, BRADSHAW & HINSON, P.A., Rock Hill,
South Carolina, for Appellant. J. Brent Kiker, SVALINA, RICH-
ARDSON & LARSON, Beaufort, South Carolina, for Appellee.
OPINION

WILKINSON, Chief Judge:

Diane O'Neil sued her former employer, Hilton Head Hospital,
alleging that she had been discharged in violation of the Family and
Medical Leave Act ("FMLA"). Citing an arbitration agreement signed
by O'Neil, the hospital moved that the suit be stayed pending arbitra-
tion as required by section 3 of the Federal Arbitration Act ("FAA"),
9 U.S.C. § 3. The district court denied this motion.

We reverse. The FAA embodies a strong federal policy in favor of
arbitration, and, accordingly, there is a strong presumption in favor of
the validity of arbitration agreements. The district court erred when
it found that the hospital was obligated to provide O'Neil with contin-
ued employment in order for the arbitration clause to be effective. We
remand the case to the district court with directions that it be stayed
pending arbitration.

I.

Diane O'Neil began working for Hilton Head Hospital as a respira-
tory therapist on January 15, 1991. On June 12, 1994, O'Neil began
a leave of absence from the hospital, which she alleges was medical
leave pursuant to the FMLA. While O'Neil was on leave, Hilton Head
Hospital was acquired by American Medical International ("AMI").
During her leave, on August 19, 1994, O'Neil signed an acknowledg-
ment form recognizing receipt of an AMI Employee Handbook and
agreeing to submit all employment disputes to arbitration. That form
contained the arbitration clause which is the subject of this appeal.
The clause states:

          I understand that AMI makes available arbitration for reso-
          lution of grievances. I also understand that as a condition of
          employment and continued employment, I agree to submit
          any complaints to the published process and agree to abide
          by and accept the final decision of the arbitration panel as
          ultimate resolution of my complaints for any and all events
          that arise out of employment or termination of employment.

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(emphasis in original).

On October 13, 1994, O'Neil was discharged. O'Neil filed a com-
plaint against the Hospital in state court alleging violations of the
FMLA. The Hospital removed the case to the district court and pursu-
ant to section 3 of the FAA, 9 U.S.C. § 3, moved to stay the action
pending arbitration. The district court denied this motion from the
bench on September 12, 1996. The Hospital appeals.

II.

In the FAA, Congress endorsed arbitration as a less formal and
more efficient means than litigation of resolving disputes. In line with
this congressional intent, the Supreme Court has repeatedly empha-
sized that the FAA represents "a liberal federal policy favoring arbi-
tration agreements." Moses H. Cone Memorial Hospital v. Mercury
Construction Corp., 460 U.S. 1, 24 (1983); accord Mastrobuono v.
Shearson Lehman Hutton, Inc., 115 S.Ct. 1212, 1216 (1995); Gilmer
v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991). Pursuant
to that liberal policy, "any doubts concerning the scope of arbitrable
issues should be resolved in favor of arbitration, whether the problem
at hand is the construction of the contract language itself or an allega-
tion of waiver, delay, or a like defense to arbitrability." Moses H.
Cone, 460 U.S. at 24-25.

The federal policy favoring the effective and efficient resolution of
disputes through arbitration applies with equal strength to claims cre-
ated by contract or by statute. "By 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
a judicial, forum." Mitsubishi Motors Corp. v. Soler Chrysler-
Plymouth, Inc., 473 U.S. 614, 628 (1985); see also Austin v. Owens-
Brockway Glass Container, Inc., 78 F.3d 875, 880-81 (4th Cir. 1996)
(statutory claims are subject to arbitration). Nothing in the Family and
Medical Leave Act suggests that Congress wished to exempt disputes
arising under it from the coverage of the FAA. See Satarino v. A.G.
Edwards & Sons, Inc., 941 F.Supp. 609, 613 (N.D. Tex. 1996)
(FMLA "contains nothing to suggest that agreements to arbitrate are
unenforceable.").

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It is clear that the provisions of the FAA apply here. The FAA
exempts from its coverage "contracts of employment of seamen, rail-
road employees, or any other class of workers engaged in foreign or
interstate commerce." 9 U.S.C. § 1. The circuit courts have uniformly
reasoned that the strong federal policy in favor of arbitration requires
a narrow reading of this section 1 exemption. Thus, those courts have
limited the section 1 exemption to seamen, railroad workers, and
other workers actually involved in the interstate transportation of
goods. See Rojas v. TK Communications, Inc., 87 F.3d 745, 748 (5th
Cir. 1996); Asplundh Tree Expert Co. v. Bates , 71 F.3d 592, 600-601
(6th Cir. 1995); Miller Brewing Co. v. Brewery Workers Local No. 9,
739 F.2d 1159, 1162 (7th Cir. 1984); Erving v. Virginia Squires Bas-
ketball Club, 468 F.2d 1064, 1069 (2d Cir. 1972); Dickstein v.
duPont, 443 F.2d 783, 785 (1st Cir. 1971).1 We agree with this uni-
form body of precedent. If Congress had wished to exempt all
employees from the coverage of the FAA it could have said so.
Instead it enumerated an exempt class of employees, which is limited
to workers engaged in the shipment and transportation of goods. See
Rojas, 87 F.3d at 748. Therefore, since O'Neil was not engaged in the
interstate transportation of goods, she does not fall within the section
1 exclusion, and the FAA applies.

III.

The FAA states that arbitration agreements "shall be valid, irrevo-
cable, and enforceable, save upon such grounds that exist at law or
in equity for the revocation of any contract." 9 U.S.C. § 2. The FAA
further provides for stays of proceedings in federal district courts
when an issue in the proceeding is referable to arbitration. 9 U.S.C.
§ 3. O'Neil attempts to avoid these statutory directives by arguing that
the arbitration agreement was not supported by consideration and that
the agreement was contingent upon the hospital's commitment to pro-
_________________________________________________________________
1 United Electrical, Radial & Machine Workers v. Miller Metal Prod-
ucts, Inc., 215 F.2d 221 (4th Cir. 1954), is not to the contrary. To begin
with, this case predates the substantial body of Supreme Court precedent
supporting utilization of the arbitration process. Even if we were to
assume that Miller Metal Products had any remaining vitality, however,
it clearly does not apply to individual employment contracts. Id. at 224.

                    4
vide her "continued employment." We address each of these conten-
tions in turn.

A.

O'Neil first argues the contract to arbitrate was not supported by
adequate consideration because the agreement was not binding on the
hospital. O'Neil's argument fails because its premise is mistaken.

Here the agreement to be bound by arbitration was a mutual one.
The contract to arbitrate was proffered by the employer. Such a prof-
fer clearly implies that both the employer and the employee would be
bound by the arbitration process. If an employer asks an employee to
submit to binding arbitration, it cannot then turn around and slip out
of the arbitration process itself.

It is true that courts have refused to enforce arbitration agreements
where the agreement specifically allows the employer to ignore the
results of arbitration. See Hull v. Norcom, Inc. , 750 F.2d 1547, 1549
(11th Cir. 1985). That is not the case here, however. There is no such
clause in the arbitration agreement signed by O'Neil, and we decline
to read such a clause into the contract. A mutual promise to arbitrate
constitutes sufficient consideration for this arbitration agreement.
Rickborn v. Liberty Life Insurance Co., 468 S.E.2d 292, 300 (S.C.
1996).

O'Neil's argument that AMI has nowhere agreed to be bound by
arbitration also ignores the multiple references in the AMI employee
handbook, which indicate that AMI agreed that the arbitration process
was binding. For, example, the handbook states:"As regards the Fair
Treatment Procedure, AMI is committed to accepting the obligation
to support and assure access to the binding arbitration procedure for
solving disputes if necessary." (emphasis added). Indeed, the arbitra-
tion agreement signed by O'Neil clearly states that the decision of the
arbitration board is "final." (emphasis in original).

O'Neil's argument is especially misplaced in the circumstances of
this case. Not only has the hospital consistently argued that it is bound
by the arbitration agreement, it has, by virtue of this suit, shown its

                    5
commitment to the arbitration process. Indeed, the only party to this
case who has shown a desire to avoid binding arbitration is O'Neil
herself.2

B.

The district court held that O'Neil's "continued employment" was
a condition precedent to the arbitration agreement. The court reasoned
that since O'Neil had not reported to work and had not been paid a
salary since signing the agreement, she had not continued employ-
ment with Hilton Head Hospital. The court therefore concluded that
the arbitration agreement was not effective. O'Neil argues that we
should follow this reasoning on appeal. We decline this invitation.

First, the district court misconstrued the language of the arbitration
agreement, reading it to indicate that O'Neil's agreement to arbitrate
was conditioned on continued employment with the hospital. This
reading reverses the plain meaning of the arbitration clause, which
specifically states: "I also understand that as a condition of employ-
ment and continued employment, I agree to submit any complaints"
to arbitration. This clause placed no employment condition on the
hospital, but rather imposed a condition upon O'Neil: if she wished
to continue employment, she had to agree to arbitration. If the provi-
sion had been intended to create a condition relating to the effective-
ness of the arbitration agreement, it would have stated: "I also
understand that as a condition of my agreement to arbitrate employ-
ment disputes, the Hospital agrees to provide me with continued
employment." However, this is simply not what the arbitration clause
says.

Second, the district court relied on the provisions of the FMLA,
stating that under the FMLA, a person who takes leave must be "re-
stored to the position they had or a similar position." This reliance on
the provisions of the FMLA was plainly improper. It is for the arbitra-
tor, not the district court, to determine whether the FMLA is even
_________________________________________________________________
2 Because we find that the contract was supported by a mutual promise
to be bound by arbitration, we need not address the hospital's argument
that the contract was supported by employment benefits provided to
O'Neil after she signed the arbitration agreement.

                    6
applicable to O'Neil's case. As the Supreme Court stated in Prima
Paint Corp. v. Flood & Conklin Manufacturing, 388 U.S. 395, 404
(1967), "in passing upon a § 3 application for a stay while the parties
arbitrate, a federal court may consider only issues relating to the mak-
ing and performance of the agreement to arbitrate." By considering
the provisions of the FMLA, the district court put the cart before the
horse.

Third, the district court referred to an affidavit by O'Neil, which
stated that she had been told by an unnamed supervisor that she would
be allowed to return to work if she filled out AMI's employment
forms. To the extent the district court relied on this statement, it was
in error because this statement had nothing to do with whether the
arbitration agreement was binding. Whatever relevance that statement
might have is related to O'Neil's underlying claim and thus is for con-
sideration by the arbitrator, not the district court. However, even if the
alleged statement had somehow been pertinent to the effectiveness of
the arbitration agreement, allegations of a vague promise cannot over-
come the binding language of a written arbitration agreement. Waiver
and estoppel are disfavored under the FAA. See Moses H. Cone, 460
U.S. at 24-25.

Neither the language of the arbitration agreement nor the other
sources relied upon by the district court support the conclusion that
continued employment was a condition relevant to the effectiveness
of the arbitration agreement. Therefore, the arbitration agreement in
this case must be enforced.

IV.

The Supreme Court has repeatedly emphasized that"questions of
arbitrability must be addressed with a healthy regard for the federal
policy favoring arbitration." Gilmer, 500 U.S. at 26 (quoting Moses
H. Cone, 460 U.S. at 24). The district court's analysis turned this
clear injunction on its head, pursuing every possible avenue to avoid
the binding arbitration agreement between O'Neil and her employer.
We cannot endorse such an approach. Accordingly, we reverse the
judgment of the district court and remand with instructions that
O'Neil's action be stayed in accordance with section 3 of the FAA.

REVERSED AND REMANDED

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