Miller v. American Airlines, Inc.

• Decision Date: 05 May 2008
• Docket Number: No. 07-1518.,07-1518.
• Citation: 525 F.3d 520
• Parties: Louis W. MILLER and Richard J. Royals, Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

525 F.3d 520

Louis W. MILLER and Richard J. Royals, Plaintiffs-Appellants, v. AMERICAN AIRLINES, INC., Defendant-Appellee.

No. 07-1518.

United States Court of Appeals, Seventh Circuit.

Argued November 7, 2007.

Decided May 5, 2008.

John S. Bishof, Jr. (argued), Chicago, IL, for Plaintiffs-Appellants.

Cheryl Tama Oblander, Cardelle B. Spangler (argued), Winston & Strawn, Chicago, IL, for Defendant-Appellee.

Before POSNER, WOOD, and WILLIAMS, Circuit Judges.

WILLIAMS, Circuit Judge.

Plaintiffs Louis Miller and Richard Royals, ages eighty and seventy-five years old respectively, have sued their former employer, American Airlines, Inc. for failing to offer them a position with salary comparable to that of their previous job of flight engineer, which they held until May of 2002. Because the arbitrator determined that the collective bargaining agreement did not entitle the plaintiffs to positions of equal pay and the plaintiffs also have not shown that their age was the reason that they were offered inferior positions, summary judgment was appropriate on their claims under the Age Discrimination in Employment Act ("ADEA"). Additionally, the plaintiffs cannot challenge the facial validity of the collective bargaining agreement because this claim was not properly raised in their charges filed with the Equal Employment Opportunity Commission ("EEOC"). Therefore, we affirm the grant of summary judgment in favor of American Airlines in its entirety.

I. BACKGROUND

In the 1950s, the plaintiffs began working as flight engineers for American Airlines. American Airlines historically operated aircrafts that required three individuals in the cockpit—the captain, first officer, and the flight engineer. As technology became more advanced, there was less need for flight engineers to occupy the third seat in the cockpit. Additionally, airlines began hiring certified pilots, rather than flight engineers, to occupy the third seat. In 1964, American Airlines and its two employee unions entered into a collective bargaining agreement, the Tripartite Agreement ("Agreement"), that preserved the rights of then-current flight engineers to occupy the third seat of a three crew aircraft, but also recognized the right of American Airlines to no longer hire flight engineers. In the years following the agreement, American Airlines began to retire its three-crew aircraft, and in 1983, the Agreement was amended to reflect this change. The new provision, Supplement U, provides that:

In the event a surplus of flight engineers exists, each flight engineer so affected, who is qualified or trainable, will be guaranteed placement within the Company [American Airlines]. . . . At the time of his placement, the employee's monthly salary will be fixed based on the average of his earnings for the previous twelve (12) months as a flight engineer. If the employee's average monthly earnings as a flight engineer exceed the total monthly compensation actually earned in his new job, the employee will be paid such flight engineer's guaranteed monthly earnings. Such guarantee will be in effect until his normal flight engineer retirement date, and thereafter, his salary will be governed by the compensation plan applicable to the new position.

Supplement U was negotiated due to concerns that new technology would make flight engineers obsolete prior to the vesting of their pensions. The provision was designed to ensure that flight engineers would continue to receive the flight engineer rate of pay until the "normal flight engineer retirement date," which the American Airlines' Retirement Benefit Plan sets as age sixty-five.

In May 2002, American Airlines grounded the last of its three crew airplanes, and the plaintiffs and one other individual were the only three active flight engineers at the time. Prior to the grounding of the fleet, American Airlines sent the three remaining flight engineers a letter offering them staff assistant positions in its publications department, positions which paid $100,000 less than their salaries as flight engineers. At that time of this offer, plaintiff Royals was seventy years old and plaintiff Miller was seventy-five years old.

The plaintiffs filed charges with the EEOC against American Airlines, alleging that they were discriminated against because of their age in violation of the ADEA, 29 U.S.C. § 621 et seq., when the defendant did not offer them a position of comparable salary which, they maintained, was required by Supplement U of the Tripartite Agreement. The plaintiffs filed suit, and the district court initially found that the plaintiffs' claims involved a minor dispute over terms in a collective bargaining agreement and therefore were preempted by the Railway Labor Act ("RLA"), 45 U.S.C. § 151 et seq. The district court then ordered the case stayed until the parties completed arbitration.

During arbitration, the plaintiffs filed a grievance with American Airlines, making essentially the same allegations that they made in their ADEA complaint. The arbitrator determined that the grievance was untimely because it was filed more than 90 days after the occurrence being grieved. The arbitrator further determined that American Airlines was not obligated by Supplement U to offer alternative employment at a salary comparable to that of a flight engineer. The American Airlines' Retirement Benefit Plan provides that the normal retirement age is sixty-five, and the arbitrator found that the plaintiffs were only guaranteed flight engineer pay until that age.

Following the arbitration decision, the district court granted the defendant's motion for summary judgment. The district court adopted the arbitrator's findings that Supplement U did not guarantee flight engineer pay past the age of sixty-five. It also found that the plaintiffs' claim that Supplement U was facially discriminatory fell outside the scope of their EEOC charge, and even if the merits could be reached, the claim failed because there was no evidence that Supplement U was motivated by a discriminatory purpose. The plaintiffs appeal.

II. ANALYSIS

A. Summary judgment was appropriate on the ADEA claim because there was no guarantee of comparable pay after the age of sixty-five.

We review the district court's grant of summary judgment de novo, viewing the record and all reasonable inferences drawn from it in the light most favorable to the party opposing the motion. Peirick v. Ind. Univ.-Purdue Univ. Indianapolis Athletic Dep't, 510 F.3d 681, 687 (7th Cir.2007). Summary judgment is appropriate only when the materials before the court demonstrate "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). To prevail on their ADEA claim, the plaintiffs must prove that they were discriminated against in the terms and conditions of their employment because of their age, 29 U.S.C. § 623. Hoffmann v. Primedia Special Interest Publ'ns., 217 F.3d 522, 525 (7th Cir. 2000) ("To succeed in an ADEA claim, a plaintiff must establish that he would not have received adverse treatment but for his employer's motive to discriminate on the basis of his age.") (internal citations omitted). The plaintiffs do not have to show, however, that their age was the sole motivation for the employer's decision; it is sufficient if age was a "determining factor" or a "but for" element in the decision. Anderson v. Stauffer Chem. Co., 965 F.2d 397, 400 (7th Cir.1992).

The plaintiffs' first claim can be characterized as an "as applied" challenge to Supplement U. The plaintiffs contend that American Airlines discriminated against them in the terms and conditions of their employment by failing to provide them with comparable pay as required by Supplement U of the Tripartite Agreement. Supplement U states in relevant part that: "Such guarantee [of a flight engineer's guaranteed monthly earnings] will be in effect until his normal flight engineer retirement date and, thereafter, his salary will be governed by the compensation plan applicable to the new position." (Emphasis added.) In the arbitration proceedings, the arbitrator interpreted this sentence to mean that following the termination of the flight engineer positions, the collective bargaining agreement did not guarantee positions of comparable pay to the plaintiffs after they reached normal retirement age of sixty-five.

The district court deferred to the arbitrator's interpretation of this key language, correctly finding that resolution of the plaintiffs' ADEA claim is dependent upon the interpretation of Supplement U of the Agreement and therefore governed by the arbitration provisions of the RLA. The RLA provides for mandatory arbitration over labor disputes arising out of the interpretation of collective bargaining agreements in the railway and airline industries. Hawaiian Airlines v. Norris, 512 U.S. 246, 252-53, 114 S.Ct. 2239, 129 L.Ed.2d 203 (1994). The RLA defines two categories of disputes: "major disputes" that "relate to `the formation of collective [bargaining] agreements or efforts to secure them'" and "minor disputes" that "grow out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions." Id. The plaintiffs' allegation that Supplement U requires a specific rate of pay after the age of sixty-five is dependent upon interpreting the phrase "normal flight engineer retirement date." Thus, this particular claim was subject to the arbitration provisions of the RLA, and we are bound by the arbitrator's interpretation that Supplement U does not obligate American Airlines to provide comparable pay after employees have reached the normal flight engineer retirement date. See Tice v. Am. Airlines, Inc., 288 F.3d 313, 318 (7th Cir.2002) ("only the arbitral boards convened under the aegis of the Railway Labor Act have the authority to determine the rights conferred by a collective...