PPP Multilink over FR and Ethernet?

I am attempting to setup a lab and run PPP Multilink over FR and Ethernet so if the frame-relay interface is shutdown or down the Ehternet interface continues to forward and vice versa. I have everything working with the configuration below over FR but when I shutdown a serial interface the traffic is not forwarded over Ethernet. Thoughts?

             R1
            /  \
           /    \
    FR SW   Eth
         /        \
        /          \
      R2          R2

Here is my configuration:

R1:
interface multilink 1
ip address 23.23.120.1 255.255.255.0
ppp multilink group 1
ppp multilink
!
interface virtual-template 1
ppp multilink
ppp multilink group 1
!
bba-group pppoe group TEST
virtual-template 1
!
int serial 2/0
no ip address
encap frame-relay
frame-relay interface-dlci 102 ppp virtual-template 1
!
int f0/1
no ip address
pppoe enable group TEST

------------------------------------------

R2:
interface multilink 1
ip address 23.23.120.2 255.255.255.0
ppp multilink group 1
ppp multilink
!
interface virtual-template 1
ppp multilink
ppp multilink group 1
!
bba-group pppoe group TEST
virtual-template 1
!
int serial 2/0
no ip address
encap frame-relay
frame-relay interface-dlci 201 ppp virtual-template 1
!
int f0/1
no ip address
pppoe enable group TEST