In the
United States Court of Appeals
For the Seventh Circuit

No. 01-3513

Robert H. Tice, et al.,

Plaintiffs-Appellants,

v.

American Airlines, Inc.,

Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 95 C 6890--Matthew F. Kennelly, Judge.

Argued February 22, 2002--Decided April 30, 2002



  Before Posner, Kanne, and Rovner, Circuit
Judges.

  Posner, Circuit Judge. Arbitral boards
established pursuant to the Railway Labor
Act have exclusive jurisdiction to
resolve disputes over the application of
collective bargaining agreements in the
railroad and airline industries. Hawaiian
Airlines, Inc. v. Norris, 512 U.S. 246,
252-53 (1994). The plaintiffs in this
suit under the Age Discrimination in
Employment Act deny that their dispute
with American Airlines is over the
meaning of the collective bargaining
agreement between their union and the
airline, but the district judge disagreed
and dismissed the suit for want of
subject-matter jurisdiction.

  A valid regulation of the Federal
Aviation Administration forbids a person
to pilot a commercial aircraft after he
reaches his sixtieth birthday. The
plaintiffs are 14 American Airlines
pilots who, having reached age 60 and
thus become disqualified to pilot the
airline’s planes, claim the right to
downgrade to the position of flight
officer. Some of the airline’s aircraft
(rapidly being phased out) have three
pilots in the cockpit--the captain, the
first officer (copilot), and the flight
officer. The flight officer must (with
immaterial exceptions) be a pilot, but
his duties do not involve flying the
airplane, but rather monitoring the fuel,
electrical, and other systems of the
plane. Apparently unique among U.S.
airlines, American refuses to permit a
captain--all the plaintiffs were captains
before becoming disqualified to serve as
captains or first officers--who has been
disqualified as a pilot to downgrade to
flight officer; instead he must retire.
It is this refusal that the plaintiffs
challenge as age discrimination.

  The airline claims that it treats all
disqualified captains alike. A captain
disqualified from serving as a captain or
first officer because he has reached the
age of 60 is treated the same as a
younger captain disqualified because of
ill health or because he failed the
airline’s proficiency test for pilots. If
so, still this would not be a defense if
the airline had unjustifiably decreed
disqualification based on age, but that
is not what it has done; it has merely
complied with a valid government
regulation. If it allowed captains
disqualified by reason of age to become
flight officers, but not captains
disqualified for other reasons, it would
be discriminating in favor of captains
disqualified by reason of age, and the
age discrimination law does not require
employers to discriminate against the
young. Tice v. Lampert Yards, Inc., 761
F.2d 1210, 1217 (7th Cir. 1985); EEOC v.
Sperry Corp., 852 F.2d 503, 509 (10th
Cir. 1988); Parcinski v. Outlet Co., 673
F.2d 34, 37 (2d Cir. 1982); Williams v.
General Motors Corp., 656 F.2d 120, 129
and n. 13 (5th Cir. 1981).

  But the question for us is not whether
there may be a violation of the age
discrimination law lurking somewhere
here; the airline’s claim to treat all
disqualified captains alike regardless of
age is contested, and if it discriminates
against captains disqualified by virtue
of their age it is violating the law.
Trans World Airlines, Inc. v. Thurston,
469 U.S. 111, 120-21 (1985). Rather, the
question is whether the plaintiffs’ suit
is dependent on their preferred
interpretation of the agreement, in which
event they should be in arbitration; and
the answer to that question is yes. The
only basis on which the plaintiffs could
be entitled to bump existing holders of
the flight-officer positions is if the
collective bargaining agreement between
the airline and its pilots’ union
entitles more senior pilots to bump less
senior ones from those positions. In the
absence of such a contractual provision,
an employer would have no duty to give
another job to an employee validly
disqualified from holding his present
job.

  Not only the existence but also the
scope of the entitlement depends on the
collective bargaining agreement. One
provision states that "all pilots are
required to qualify in turn for the next
higher pilot category." The airline
contends that this provision establishes
an "up or out" policy: a flight officer
who cannot qualify for a higher position
cannot remain in the cockpit. The
plaintiffs qualify rather than reject
this position, pointing to a provision
which states that "a pilot will only be
required to upgrade to captain one (1)
time." They interpret this to mean that
the fact that their age precludes them
from ever upgrading from the flight
officer’s position which they seek to
captain-- that is, the fact that they are
disqualified from ever again serving as a
captain--cannot be used to disqualify
them from the flight officer’s job,
because they complied with the "up or
out" provision once and for all when they
qualified as captains. Having climbed the
ladder once, they can return to the
lowest rung even though they can
neverreclimb. The airline argues, to the
contrary, that the qualify-once provision
is inapplicable to a case in which the
pilot can never again serve as captain.
It is one thing, the airline argues, for
an eligible captain to bump a flight
officer or first officer; when a
captain’s position opens up for him,
he’ll be entitled to it without having to
requalify as a captain. It is another
thing to let him bump the junior employee
when he can never again become a captain.

  This is a disagreement over the meaning
of the collective bargaining agreement.
The plaintiffs claim certain rights under
it and the airline denies they have those
rights. It is true as the plaintiffs
point out that the agreement nowhere
states in so many words that a
permanently disqualified captain cannot
bump a flight officer. But contracts,
including collective bargaining
agreements, frequently contain implied
terms. Consolidated Rail Corp. v. Railway
Labor Executives’ Ass’n, 491 U.S. 299,
311 (1989); Howard v. Weathers, 139 F.3d
553, 555 (7th Cir. 1998); Chicago & North
Western Transportation Co. v. Railway
Labor Executives’ Ass’n, 908 F.2d 144,
154 (7th Cir. 1990) ("the practice had,
in other words, ripened into a
commitment, and thus had become a part of
the collective bargaining agreement
between the union and the railroad.
Practices accompanied by assurances of
continuation, express or implied but in
either event likely to induce reliance,
can create an implied obligation");
Brotherhood of Locomotive Engineers v.
Springfield Terminal Ry., 210 F.3d 18, 33
(1st Cir. 2000); Bonnell/Tredegar
Industries, Inc. v. NLRB, 46 F.3d 339,
344 (4th Cir. 1995). Whether a collective
bargaining agreement contains such terms
is a question of interpretation to be
decided by arbitrators when arbitration
is the designated method of resolving
issues arising under the agreement.
"Contracts have implied as well as
express terms, and the authority of an
arbitrator to interpret a collective
bargaining contract includes the power to
discover such terms." Ethyl Corp. v.
United Steelworkers of America, AFL-CIO-
CLC, 768 F.2d 180, 186 (7th Cir. 1985);
see Northern Indiana Public Service Co.
v. United Steelworkers of America AFL-
CIO-CLC, 243 F.3d 345, 348 (7th Cir.
2001); International Brotherhood of
Teamsters, Local Union No. 371 v.
Logistics Support Group, 999 F.2d 227,
229-30 (7th Cir. 1993); Dreis & Krump
Mfg. Co. v. International Ass’n of
Machinists & Aerospace Workers, District
No. 8, 802 F.2d 247, 253 (7th Cir. 1986).

  The applicability of this principle to
the present case is confirmed by
reflecting on the character of the
considerations that are relevant to
determining these plaintiffs’ rights
under the collective bargaining
agreement. The interpretation of a
contract does not take place in a vacuum;
it is not a purely semantic exercise; it
has regard for the consequences of
alternative interpretations, the parties
being assumed to have intended something
sensible by their contract. E.g., Rhode
Island Charities Trust v. Engelhard
Corp., 267 F.3d 3, 7 (1st Cir. 2001).
That is why we have said that "to
interpret a contract or other document,
it is not enough to have a command of the
grammar, syntax, and vocabulary of the
language in which the document is
written. One must know something about
the practical as well as the purely
verbal context of the language to be
interpreted." Beanstalk Group, Inc. v. AM
General Corp., 283 F.3d 856, 860 (7th
Cir. 2002). American argues that the
flight officer’s job is a kind of
apprenticeship for actually flying the
airplane, so it wants the job filled by
pilots eligible to progress to the flying
positions. True, an eligible captain who
downgrades is not an apprentice. Still,
since his eligibility makes it likely
that he will someday again be flying the
aircraft, it makes sense that he should
stay in the cockpit rather than take a
job on the ground; it should help him to
maintain his proficiency. That is the
sort of argument that arbitrators
knowledgeable about the practices of the
airline industry are in a better position
to evaluate than a judge or jury in a
suit under an unrelated federal statute.
Gonzalez v. Southern Pacific
Transportation Co., 773 F.2d 637, 645
(5th Cir. 1985). This insight lies behind
the frequently stated proposition that
labor arbitrators do not merely read the
words of the collective bargaining
agreement but administer the "common law
of the shop," which is to say the set of
practices ("course of dealing," in the
lingo of ordinary contract law) that fill
out those words and complete the
definition of the parties’ agreement
sketched in the actual document.
Consolidated Rail Corp. v. Railway Labor
Executives’ Ass’n, supra, 491 U.S. at
311-12; Transportation-Communication
Employees Union v. Union Pacific R.R.,
385 U.S. 157, 160-61, 162-63 (1966);
Washington Teachers’ Union Local No. 6,
American Federation of Teachers, AFL-CIO
v. Board of Education, 109 F.3d 774, 779
(D.C. Cir. 1997).

  The plaintiffs deny that the airline has
a practice of refusing to allow any
disqualified captain to hold the flight
officer’s job. They argue that only if
disqualification is based on the FAA’s
age-60 rule is the captain refused
permission to downgrade to flight
officer. And nothing in the collective
bargaining agreement authorizes such
discrimination. If they are right, they
will prevail in the arbitration and be
reinstated with backpay. Might they then
seek additional relief under the age
discrimination law? Their argument would
be that the airline had violated that law
by discriminating on grounds of age
against captains applying for flight-
officer positions. The airline would have
denied them their normal seniority rights
solely on the basis of their age. We do
not see why such a suit could not lie.
When an employee has both a contractual
right by virtue of a collective
bargaining agreement (or other employment
contract), and a statutory right to be
free from discrimination, "both rights
have legally independent origins and are
equally available to the aggrieved
employee." Alexander v. Gardner-Denver
Co., 415 U.S. 36, 52 (1974); Pryner v.
Tractor Supply Co., 109 F.3d 354, 361,
364 (7th Cir. 1997); Viggiano v. Shenango
China Division, 750 F.2d 276, 279-81 (3d
Cir. 1984); Air Line Pilots Ass’n, Int’l
v. Northwest Airlines, Inc., 627 F.2d
272, 277-78 (D.C. Cir. 1980). The
plaintiffs could, moreover--as in fact
they have done--institute such a
suitwithout waiting for completion of the
arbitral process, although the suit would
have to be stayed pending that
completion.

  The analogy is to the doctrine of
primary jurisdiction. When, in a suit
based on a federal statute, a potentially
dispositive issue arises that is within
the exclusive jurisdiction of an
administrative agency, the suit must be
stayed while the parties resort to the
agency for that resolution. As we
explained in Arsberry v. Illinois, 244
F.3d 558, 563 (7th Cir. 2001) (citations
omitted), the doctrine of primary
jurisdiction, "in its central and
original form, in which it is more
illuminatingly described, however, as
’exclusive agency jurisdiction,’ . . .
applies only when, in a suit involving a
regulated firm but not brought under the
regulatory statute itself, an issue
arises that is within the exclusive
original jurisdiction of the regulatory
agency to resolve, although the agency’s
resolution of it will usually be subject
to judicial review. When such an issue
arises, the suit must stop and the issue
must be referred to the agency for
resolution. If the agency’s resolution of
the issue does not dispose of the entire
case, the case can resume subject to
judicial review of that resolution along
whatever path governs review of the
agency’s decisions, whether back to the
court in which the original case is
pending or, if the statute governing
review of the agency’s decisions
designates another court, to that court."
Similarly, the suit by these plaintiffs
for employment discrimination must be
stayed because they have no possible age
discrimination claim if it turns out that
the collective bargaining agreement
expressly or by implication makes all
disqualified captains, regardless of age,
ineligible to become flight officers and
is applied in a nondiscriminatory fashion
in accordance with its terms. And only
the arbitral boards convened under the
aegis of the Railway Labor Act have the
authority to determine the rights
conferred by a collective bargaining
agreement in the airline industry.

  We are mindful that in Brown v. Illinois
Central R.R., 254 F.3d 654, 664, 667-68
(7th Cir. 2001), we said that if a
particular interpretation of the
collective bargaining agreement is
potentially dispositive of the
plaintiff’s claim, the plaintiff cannot
bring a separate federal suit but is
remitted to arbitration as his exclusive
remedy, while if the meaning of the
collective bargaining agreement bears
tangentially though materially on the
issue in the federal suit, that suit can
proceed. See also Schiltz v. Burlington
Northern R.R., 115 F.3d 1407, 1415 (8th
Cir. 1997). In either case, the suit must
be stayed until the dispute over the
agreement is resolved by the only body
authorized to resolve such disputes,
namely an arbitral panel. It follows that
if the resolution of the dispute does not
resolve the issues in the suit, the suit
can resume.

  We don’t think the opinion in Brown
meant anything different from this,
despite the reference to potentially as
distinct from actually dispositive
arbitration. Brown was trying to avoid
the arbitral route--improperly, because
his claim depended critically on the
resolution of a dispute over the meaning
of the collective bargaining agreement,
and as the court said there and we have
said here, the arbitrators have exclusive
jurisdiction over such disputes. Brown v.
Illinois Central R.R., supra, 254 F.3d at
658. The court added, consistently with
our analysis here, that "the adjudication
of Brown’s ADA claim cannot go forward
until Article 55 and the seniority
provisions of the CBA are interpreted."
Id. at 661 (emphasis added). The
implication is that if Brown obtained a
favorable interpretation from the
arbitrators, he could reinstate his suit.
Since it is obviously the intention of
the plaintiffs in our case to proceed
under the age discrimination law if they
can, we think that rather than dismiss
the present suit the district judge
should have stayed it to await the
outcome of arbitration in order to spare
the parties the burden of a second
litigation should the arbitrators fail to
resolve the entire controversy. That is
the normal procedure when an arbitrable
issue arises in the course of a federal
suit. See 9 U.S.C. sec. 3. As we have
emphasized in a variety of contexts,
district courts should retain
jurisdiction over a suit that must be
interrupted for reference of an issue to
another forum rather than dismiss it if,
should it be dismissed, there might later
be grounds for reinstating it. E.g.,
Baltimore & Ohio Chicago Terminal R.R. v.
Wisconsin Central Ltd., 154 F.3d 404,
407-08 (7th Cir. 1998); Richmond v.
Chater, 94 F.3d 263, 267-68 (7th Cir.
1996); Evans Transportation Co. v.
Scullin Steel Co., 693 F.2d 715, 717-18
(7th Cir. 1982); cf. Pizzo v. Bekin Van
Lines Co., 258 F.3d 629, 634-36 (7th Cir.
2001); Goss Graphics Systems, Inc. v. DEV
Industries, Inc., 267 F.3d 624, 626 (7th
Cir. 2001).

  The judgment is therefore modified to
convert the dismissal of the plaintiffs’
suit to a stay of the suit pending
referral of the parties’ dispute to
arbitration, and the case remanded to the
district court accordingly.
